Varvee Global Limited (VGL), formerly known as Aarvee Denims & Exports Limited, has reported robust financial results for the second quarter, showcasing significant improvements in revenue and profitability.

Key Financial Highlights

• Revenue Growth: VGL's revenue from operations surged by 79.80% year-over-year to ₹278.31 crore, up from ₹154.79 crore in the same quarter of the previous year.
• Profitability Boost: The company's EBITDA swung to a positive ₹138.46 crore with a remarkable margin of 49.75%, compared to a loss in the same quarter last year.
• Gross Margin Expansion: Gross margin expanded by 3,836 basis points to 55.78%, reflecting stronger realizations and a richer product mix.
• Net Profit Increase: Net profit for the quarter rose by 23.53% to ₹102.11 crore, compared to ₹82.66 crore in the corresponding period.
• Earnings Per Share: Basic and diluted EPS improved to ₹3.96, up from ₹3.52 in the corresponding quarter of the previous year.

Operational Highlights

• Cost Optimization: Employee expenses decreased by 54.45% year-over-year, while other operating expenses reduced by 30.20%, creating durable operating headroom.
• Debt Reduction: Finance costs were nearly eliminated, down 99.99% year-over-year, reflecting successful deleveraging efforts.
• Balance Sheet Improvement: Non-current borrowings stood at ₹2,290.40 crore, and current borrowings at ₹520.10 crore, showing a significant reduction from previous levels.

Strategic Developments

1. Product Portfolio Diversification: VGL is actively diversifying beyond its core denim business into value-added shirting and suiting fabrics to enhance margins and reduce seasonal volatility.
2. Capacity Utilization: The company is focusing on expanding its non-denim capacity to 50 million meters by converting existing denim capacity.
3. Market Expansion: VGL is expanding its Pan-India dealer network and re-engaging with B2B and retail segments to capture emerging market opportunities.

Management Commentary

Mr. Jaimin Gupta, Chairman & Managing Director, stated, "This quarter signals a clear strategic inflection for VGL; a cleaner balance sheet and a higher-quality margin profile driven by sharper execution. We simplified the portfolio and used the proceeds, alongside internal cash generation, to retire debt and cut our financing burden to near zero. With Q2 EBITDA margin at almost 57% and gross margin at 66%, our focus now is simple: compound free cash flow, keep returns above the cost of capital through cycles, and invest with discipline in the categories and customer cohorts that matter."

Future Outlook

Varvee Global Limited is well-positioned to capitalize on the growing Indian textile market, which is projected to reach USD 213.50 billion by 2033. The company's strategic shift towards value-added fabrics, coupled with its debt-free status and operational efficiencies, sets a strong foundation for sustainable growth in the coming years.

As VGL continues to execute its turnaround strategy, investors will be watching closely to see if the company can maintain its margin performance and revenue growth in the subsequent quarters.

Aarvee Denims & Exports Limited has announced a significant expansion of its business operations with the launch of a new Consultation and Advisory Division. This strategic move marks a diversification of the company's services beyond its core textile manufacturing business.

New Division Overview

The newly established Consultation and Advisory Division will offer a wide range of services across multiple sectors:

Management Services

• Business Management: Strategic planning, operational improvement, and organizational development
• Financial Management: Financial planning, cost accounting, and budgeting
• Human Resource Management: Recruitment, personnel management, and training

Technical Services

• IT Services: Communications and networking, data management, software development, and technical support
• Civil and Administration: Infrastructure development, project management, and administrative support

Industry-Specific Services

• Textile Industry: Advisory services for textile manufacturers, exporters, and related businesses

Strategic Rationale

Jaimin Kailash Gupta, Chairman & Managing Director of Aarvee Denims & Exports, commented on the launch: "We are excited to launch this new division, which will enable us to share our knowledge and expertise with a wider range of clients. Our team of experienced professionals is committed to delivering high-quality advisory services that drive business growth, improve efficiency, and enhance competitiveness."

Corporate Developments

The launch of the Consultation and Advisory Division is part of a broader set of corporate actions approved by the company's Board of Directors:

1. Memorandum of Association (MOA) Update: The company is adopting a new set of MOA to align with the Companies Act, 2013.

2. Object Clause Alteration: The main objects of the company are being expanded to include the new consulting services, as well as potential future ventures in renewable energy and infrastructure development.

3. Annual General Meeting: The 36th AGM is scheduled to be held both virtually and physically at the company's registered office in Ahmedabad.

4. Secretarial Auditor Appointment: Shah & Shah Associates, a firm of Practicing Company Secretaries, has been appointed as the Secretarial Auditors for a five-year term, subject to shareholder approval.

Looking Ahead

The expansion into consultation and advisory services represents a significant milestone for Aarvee Denims & Exports. By leveraging its experience in the textile industry, the company aims to offer valuable insights and expertise to a broader client base. This move could potentially open up new revenue streams and growth opportunities for the company.

Investors and stakeholders will be keenly watching how this new division performs and contributes to the company's overall growth strategy. The upcoming Annual General Meeting may provide further details on the implementation and expected impact of this new business vertical.