With a market share of 12 % ,Ahmedabad based Aarvee Denim is the second largest manufacturer of denim fabrics in India. Company having three manufacturing units in and around Ahmedabad. Company increased its production capacity by 40 % in last financial year, thus the current capacity stands @ 80 million meters per annuam.Denim prices are currently going through a consolidation phase after some sharp spike in past few quarters. On the other side cotton prices showing weakness which is expected to increase the margins of denim exporting companies. Weakness of rupee is an added advantage. Due to the reduction of Chinese export to International market ,large Indian denim exporters increased their market share in recent times. Other than export ,company selling branded products under three brands - De Extase,Fashion Wrapper and Aden. Size of branded retail operations are limited currently but company planning to open more stores in future. In the financial front too Aarvee Denim exhibiting good performance. For the last September quarter company reported a net profit of Rs.17 Cr v/s Rs.4 Cr .In last FY ,company bought back half of the issued FCCB’s .The current trend in denim and cotton price is expected to continue for some more time ,hence recommending a BUY on this stock for medium term .Keep an eye on the price of raw material in local market and price of end product in International market .Currently stock is trading in both NSE and BSE around Rs.76/-
Link to Company Website HERE
Link to Branded Retail HERE
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