This stock rallied from Rs 275 to Rs 600 in 10 months, then plunged; is it still a buy?

Multibagger stock: From Rs 275 level in August 2025 to Rs 600 level in June 2026, Arvind Ltd shares more than doubled (118 per cent) investor money within a span of 10 months, before seeing an 8 per cent drop of late. Analysts noted that macro-led events caused yarn prices and packaging costs to rise, resulting in margin drag in both textile and Advanced Material Business (AMB) segments in the June quarter. That said, they retained 'Buy' on the stock, saying any short-term softness could offer fresh entry opportunity.

Arvind is on the verge of a strategic transformation from a fabric-focused player to a garments-led business, which offers a larger addressable market, they said.

Q1 hit by uncontrollable factors 
Emkay Global said Arvind’s Q1 results were disrupted by uncontrollable factors and, therefore, see the Q1 margin drag to normalise in the second half of FY27.

The domestic brokerage said it likes the 13 per cent YoY garment growth in Q1 that reposed its faith in a likely better product mix in normal circumstances.

"We broadly maintain our estimates and continue to value Arvind on SoTP basis, ascribing EV/Ebitda of 11 times/20 times to textiles/AMB on 1QFY29E. We maintain Buy and see any near-term softness in the stock price as an entry opportunity," Emkay Global said today.

At 1 pm, Arvind was trading 3.72 per cent lower at Rs 550.50 on BSE.

RM pass-through from Q2
Nuvama, earlier, on Friday said margins were hurt by higher raw material costs and felt the pass-through should start Q2 onwards, thereby improving margins gradually.

It tweaked FY27 revenue and Ebitda estimates for Arvind by minus 0.4-1.2 per cent and and FY28 estimates by 1.8-2.3 per cent. "Maintain ‘BUY’ with a revised target of Rs 660 (Rs 554 earlier). We are upgrading our Textiles segment multiple to 10 times from 8 times on improving demand prospects. The stock currently trades at 11 times/9 times FY27E/28E EV/Ebitda," Nuvama said.

MOFSL said Arvind's price pass-through is expected to drive recovery, with garments targeting double-digit margins over 18-24 months and advanced materials targeting margins over 16 per cent.

"We expect the AMD business to expand at 17 per cent-plus CAGR over the next two years (ex-Dalco), while the Garments business is expected to expand at 15 per cent CAGR," MOFSL said.

This brokerage noted that the AMD segment, comprising a high-value segment, is expected to support with its superior margin profile and strong growth potential, adding that the recent Rs 500 crore QIP proceeds will be utilized to reduce India debt related to the Dalco acquisition.

Management guidance 
The management expects 11-12 per cent revenue growth, with a 40-60 basis points operating margin expansion over the next 2-3 years. MOFSL said it has tweaked its earnings and reiterate its 'Buy' rating on the stock with a target price Rs 670.

Key risks
Key risks included tariff risk, raw material and cost pressures, and project and execution risks related to the Dalco business.