Arvind Ltd is Rated Hold by MarketsMOJO

Current Rating and Its Significance

MarketsMOJO’s 'Hold' rating for Arvind Ltd indicates a balanced outlook for investors. It suggests that while the stock is not currently a strong buy, it also does not warrant a sell recommendation. Investors should consider maintaining their existing positions and monitor the company’s performance closely. This rating reflects a combination of factors including quality, valuation, financial trends, and technical indicators, which together provide a comprehensive picture of the stock’s investment potential.

Quality Assessment

As of 07 January 2026, Arvind Ltd maintains a good quality grade. The company has demonstrated healthy long-term growth, with operating profit expanding at an annualised rate of 35.42%. This robust growth trajectory is supported by positive recent results, including a highest-ever operating cash flow of ₹762.88 crores for the year and a profit after tax (PAT) growth of 58.17% over the latest six months, reaching ₹156.64 crores. Additionally, the company’s return on capital employed (ROCE) stands at a strong 12.99%, signalling efficient use of capital and solid operational performance.

Valuation Perspective

Arvind Ltd’s valuation is currently very attractive. The stock trades at an enterprise value to capital employed ratio of 1.8, which is below the average historical valuations of its peers in the garments and apparels sector. This discount suggests that the market may be undervaluing the company relative to its capital base and earnings potential. The price-to-earnings-to-growth (PEG) ratio of 0.5 further supports this view, indicating that the stock’s price is low relative to its earnings growth prospects. Such valuation metrics can appeal to value-oriented investors seeking opportunities in smallcap stocks.

Financial Trend Analysis

The financial trend for Arvind Ltd remains positive. Despite the stock’s underperformance in the market over the past year, with a return of -26.99%, the company’s profits have risen by 41.9% during the same period. This divergence between earnings growth and stock price performance highlights a potential disconnect that investors may want to consider. The company’s strong cash flow generation and improving profitability metrics underpin a favourable financial trend, suggesting resilience and operational strength amid market volatility.

Technical Outlook

From a technical standpoint, Arvind Ltd currently holds a bearish grade. The stock has experienced short-term price pressures, reflected in recent returns of -5.59% over one month and -9.66% over six months. The one-day gain of 0.43% and one-week decline of 1.25% indicate some volatility and lack of clear upward momentum. This technical weakness may temper enthusiasm among traders and short-term investors, reinforcing the rationale behind the 'Hold' rating as the stock consolidates and seeks directional clarity.

Market Performance Context

It is important to note that Arvind Ltd has underperformed the broader market in the last year. While the BSE500 index has delivered a positive return of 6.97% over the same period, Arvind’s stock price has declined by nearly 27%. This underperformance contrasts with the company’s improving fundamentals and highlights the need for investors to weigh both market sentiment and intrinsic value when making decisions.

Institutional Interest

Institutional investors hold a significant stake in Arvind Ltd, with 35.52% of shares owned by these entities. Institutional holdings often reflect confidence in a company’s fundamentals, as these investors typically have greater resources and expertise to analyse financial health and growth prospects. Their involvement can provide a stabilising influence on the stock and may signal underlying value recognised by professional market participants.

What This Rating Means for Investors

For investors, the 'Hold' rating on Arvind Ltd suggests a cautious approach. The company’s strong fundamentals and attractive valuation provide a solid foundation, but the bearish technical signals and recent price underperformance warrant prudence. Investors currently holding the stock may consider maintaining their positions while monitoring market developments and company updates closely. Prospective investors might wait for clearer technical signals or further confirmation of sustained earnings momentum before initiating new positions.

Sector and Market Position

Operating within the garments and apparels sector, Arvind Ltd is classified as a smallcap company. Its market capitalisation and sector dynamics mean it can be more susceptible to market fluctuations and economic cycles compared to larger peers. Nonetheless, the company’s demonstrated operational growth and improving profitability metrics position it well to capitalise on sectoral recovery and consumer demand trends.

Summary of Key Metrics as of 07 January 2026

To summarise, the latest data shows:

• Mojo Score of 53.0, reflecting a Hold grade


• Operating profit growth at an annualised 35.42%


• Operating cash flow at ₹762.88 crores, highest recorded


• PAT growth of 58.17% over the last six months


• ROCE at 12.99%, indicating efficient capital use


• Enterprise value to capital employed ratio of 1.8, signalling attractive valuation


• Stock returns over one year at -26.99%, underperforming the BSE500 index


• Institutional holdings at 35.52%, reflecting strong professional investor interest

These figures collectively underpin the current Hold rating, balancing the company’s operational strengths against market and technical challenges.

Looking Ahead

Investors should continue to track Arvind Ltd’s quarterly results and market trends closely. The company’s ability to sustain profit growth and improve technical momentum will be key determinants of future rating changes and stock performance. Meanwhile, the current Hold rating serves as a prudent guide for managing exposure to this smallcap garment and apparel player in a dynamic market environment.

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