May 2016

Arvind 3.0

Investor Presentation

2

Agenda

• FY2016 – at a glance

• Strategic agenda – Brands and Retail

• Value creation case

3

Over the last 5 years, we have achieved robust revenue growth, while maintaining margins, returns and a stable leverage

0

3,000

6,000

9,000

FY ’13

5,293

FY ’12 FY ’14

6,862

4,925

7,851

Op. Rev, Rs Cr

+14% 8,442

FY ’16FY ’15

1717181716

6

5555

0

5

10

15

20

FY ’16

Margins %

FY ’12 FY ’15FY ’14FY ’13

B & R %Textiles %

1.2

1.21.1

1.1

1.0

3.03.13.2

3.0

2.0

2.5

3.0

3.5

2.0

1.5

0.5

2.5

D/E %

FY ’16FY ’15

D/EBIDTA

FY ’12

3.0

FY ’14FY ’13

D/E ratioD / EBIDTA

Textiles B & R

14% overall top-line growth during the last 5 years

Margins maintained on an overall basis…

..and robust returns with stable leverage

70%

68%63%

26% 28%30%

61%

32%

69%

27%

8,450

4

• Historic unlock of branded apparel market in India

• Global textile and apparel value chains

Recap: Arvind’s growth and value creation agenda driven by two parallel strategic journeys

Fabrics & Apparel: Vertical, differentiated and asset light

– Vertical garmenting– Moderately growing wovens business– Stable and differentiated denim

business

Opportunity Arvind’s strategic journeys Value creation logic

Brands & Retail: Break-through growth

– Industry leading portfolio of brands: own and licensed

– Grow speciality retail aggressively

• Portfolio of high and moderate growth businesses

• Maintain/ expand margins

• Reducing leverage over time– High growth in

asset-light B&R– Asset-balanced

growth in textiles and garmenting

• Sharp focus on target RoCE 20%+

1

2

5

Fabric business has delivered strong EBITDA and ROCE growth despite volatile external environment

10% top-line growth in fabrics was coupled with expanded margin, improved ROCE and cashflows…

..while cotton prices and US$ remained highly volatile

Marginexpansion,

while growing revenue

Significantshift in ROCE

profile

272725

1921

15

20

25

30

ROCE %

18.117.817.6

17.1

17.7

16.5%

18.0%

19.5%

Op. EBITDA %

0

50

100

150

Apr, 2013

Apr, 2014

Apr, 2012

Apr, 2015

Cotton Price (c/lb)

40

45

50

55

60

65

70

Apr, 2013

Apr, 2014

Apr, 2012

Apr, 2015

INR per US$

332279

14951

-48-200

0

200

400

FY16

FOCF, Rs Cr

FY15FY12 FY14FY13

Steadily improving cashflows

6

Vertical garmenting will dominate the agenda for our fabrics business

Top-line from garmenting grew by ~20% in FY2016

10+ customers already served through vertical offering – clear plans to step-up

883

712672

504460

0

200

400

600

800

1,000

FY16

+18%

FY14FY12 FY15FY13

FY 15-16 FY 19-20

• Added capacity of 1 million units in Bangalore

• Operations in new facilities stabilized

• Deeper customer relationships giving revenue visibility and stability

• Platform to expand customer value through design/development partnerships

• Supply chain simplicity/ transparency

% of fabric output sold as garment

~ 6%

~ 20-22%

7

Sales growing at 25%+ yoy Strong and improving bottom line Capital efficiency : Poised to Improve

ROCE (%)Sales (Rs. Cr)

EBIDTA (Rs Cr)

EBIDTA %

F

4.9 5.1 5.2 6.55.08.25.8

Brands & Retail business has achieved breakthrough growth, increased revenue by 2.5x over last 5 years

2,740

2,361

1,915

1,314

935732

1,405

+25%

FY16FY12 FY14FY13 FY15FY11FY10

178

122

97

686777

42

FY13FY12FY11

+27%

FY16FY14FY10 FY15 FY16

5.5%

FY14

4.2%

FY15

3.9%

FY13FY12FY11

8.7%

FY10

4.0%

7.7%

2.7%

Fastest growing player in Indian apparel retail

8

Power Brands delivered strong revenue growth and margin expansion, while growth brands started delivering positive EBITDA

8

10

12

14

FY16FY15

10%11%

13%

11%

FY14

9%

FY12 FY13

EBITDA %

1,6041,334

1,068918758

0

500

1,000

1,500

2,000

FY16FY12 FY15

+21%

FY14FY13

Revenues Rs Cr

Power Brands delivered steady growth,

increasing profitability

413350

218

93

0

100

200

300

400

500

FY16

+64%

FY15

Revenues Rs Cr

FY14FY13

-40

-20

0

20

-16%

FY13

-20%

-6%

EBITDA %

FY16

1%

FY15FY14

Growth Brands collectively delivered +ve

EBITDA, as they grew rapidly

9

Specialty retail forays were very successful, while re-structuring of discount/value retail started to deliver results

Successful debutants in specialty retail

• Enabled play in new fast growing categories –youth, children’s wear and women’s

• Each store delivered store level profitability within the year of start

– likely to start contributing to company P&L from year 3

• Well recognized global brands – will accrue brand equity value as the businesses grow

• Include exclusive rights for online/ e-commerce play

Mega-mart relaunched as Unlimited

• Restructuring agenda

– Closure of 55 loss making stores

– Product mix largely private brands with high gross margins

– Single size store footprint

– Family Store (more women’s lines)

• Initial results

– Full price sell through up 15%

– 6% improvement in gross margin

– Old stock reduced by 5% (fresh inventory)

10

Agenda

• FY2016 – at a glance

• Strategic agenda – Brands and Retail

• Value creation case

11

Indian apparel demand is at the cusp of significant growth as the economy crosses $2000 GDP per capita

China apparel consumption took-off

at $2k GDP per capita

Indian apparel consumption

stands to grow significantly

200

118

6045

0

50

100

150

200

8

4

9

7

6

5

1

0

2

3

20102000 2005 2015

GDP (RHS)

Apparel Consumption (per capita)

2,671

2,269

1,942

1,627

1,496

2018 2020201620142012

$37

Per Capita GDP (Nominal)

Source : IMF, Wazir, CLSA, World Bank, FICCI

Branded segment to grow

at 1.5x the overall market

3037

5810

15

30

2011 2021E

40

2015

52

88

Unbranded

Branded

Top 15 brands have grown

at 24% CAGR in last 5 years

(industry @ 6.5%)

Billion USD‘000 USDUSD per capita

12

Arvind is well positioned to be India’s lifestyle powerhouse by 2020

5. Best Talent Base

Powerful Platforms For Sustained Growth

1.

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Strong portfolio of iconic global brands

across all market segments/ formats

Robust platform and industry leading

capabilities to enable the growth

Platform will easily scale-up to

enable our $1 Billion by 2020

aspiration for the B&R business

13

Our agenda in Brands and Retail will be driven by 3 clear sets of priorities

• Build on the power brands through category and channel expansion

• Specialty retail to quickly gain strength due to strengths of brands

• Growth brands moving towards double digit EBITDA

• Enhance returns through operational efficiency

• Carefully monitor evolution and performance of recent launches

• Take calculated bets on new opportunities

• Maintain financial discipline while making new investments

• Ensure seam-less customer journeys across all channels/ touch-points

• Maintain full complementarity with overall B&R play

Consolidate existing business

Strategicallymanage portfolio

Powerful Omni/ Digital play

1

2

3

14

Key Priority of the Brands & Retail business over the next Two Years is to grow Topline with Improved Profitability and ROCE

1 Consolidate existing businesses

Growth Brands

2,635

4,618

Specialty Retail

2016

Power Brands

2018 20182016

466

200

25-26%35-38%

Top-line expected to grow at 25%+… … and EBITDA at 35%+ Healthy returns

• ROCE will improve 2x

to reach 16-18% range

• Improvement powered

by an efficiency

improvement program

that is delivering

o GP improvement

of 3% to 5%

o 5% sell thru

improvement

o Inventory turns

up by ~30%

2,740178

15

We will continue to manage our B&R portfolio to ensure that we meet the evolving market needs while balancing financial performance

• Large opportunities with potential to

become 500 cr in 5 years and EBITDA

breakeven in 2 years

• Enable play in attractive adjacencies

• Niche brands that add value to

NNNOW.com

Critical to dynamically maintain B&R portfolio

Investments in new brand are guided by our philosophy of

limiting the overall EBITDA impact

• ‘Current’ to consumer preferences

• Trending brands

• Unfolding shopping behavior

Calibrated additions to B&R portfolio

2 Strategically manage portfolio

16

Arvind Ltd. has launched NNNOW.com – a powerful omni-channel portal that integrates online and offline shopping

• Exciting omni-channel features

– Endless aisles

– Express delivery

– Convenient returns

• Distinctive online experience

– Authentic brand shops

– Curated ensembles

– Global brands

Arvind Internet Offer

• Official online channel for ALBL brands

• Platform for creating own-brands or brand extensions in select categories

• Digitization of ALBL brand stores

Integral to B&R Strategy

3 Powerful Omni/ Digital play

17

22% - 25%

Sales growing at ~22%+ yoy Strong bottom line growth Improving capital efficiency

Sales (Rs. Cr) EBIDTA (Rs. Cr) ROCE (%)

FY15 FY16 FY17 FY18 FY 20 FY15 FY16 FY17 FY18 FY20

EBIDTA % 5.2

FY 18FY 16 FY 17FY 15 FY 20

We expect to clock healthy growth, profitability and capital efficiency in our quest to $1B in B&R by 2020

30% - 35% 20% - 25%

6.5

2361

2740

122

178

3.9%

5.5%

18

Agenda

• FY2016 – at a glance

• Strategic agenda – Brands and Retail

• Value creation case

19

Summary of value creation agenda over next 4-5 years

• Powered by 25-30% continuing growth in B2C businesses

• Measured capacity addition and higher value addition in fabrics

• Stepped-up vertical play

GROWTHMaintain 15% overall topline growth

PROFITABILITYEBITDA growth in tandem with topline

• Push business mix towards B2C (~40-45% by FY20 as against ~32% in FY16)

• Maintain a carefully designed portfolio of licensed and own brands available thru optimal mix of offline, online and omnichannels

BUSINESS MIXSharpen and expand B2C plays

• Systematic reduction of debt ratio yoy• Maintain strong capex discipline• Margin Improvement

• Target ROCE to reach 18-20% by FY20 (against 14% in FY16)

RETURNSTight management of capital employed

• Target yoy improvement in margins in B2C business as

• Almost all brands/Retail formats are out of investment phase

• Operating leverage to continue in matured brands

Thank You!