Arvind Fashions Grants 1,00,000 Stock Options to Eligible Employees Under ESOS 2025

The Nomination and Remuneration Committee (NRC) of the Board of Directors of Arvind Fashions Limited granted 1,00,000 (One Lakh) stock options to eligible employees on May 06, 2026, under the "Grant - May 2026" tranche of the Employees Stock Option Scheme – 2025. The disclosure was made pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The scheme is in compliance with the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

Key Details of the Stock Option Grant

The stock options granted cover 1,00,000 equity shares of Rs. 4/- each, with an exercise price set at Rs. 436.30 per share. The following table summarises the key parameters of the grant:

Parameter: Details Total Options Granted: 1,00,000 (One Lakh) Scheme Name: Employees Stock Option Scheme – 2025 Grant Name: Grant - May 2026 Date of Grant: May 06, 2026 Equity Share Face Value: Rs. 4/- each Exercise Price Per Share: Rs. 436.30/- Exercise Period: 3 years from the date of vesting

Vesting Schedule

The options will vest in three tranches based on prescribed vesting conditions. The vesting schedule is structured as follows:

No. of Stock Options: Date of Vesting 33,333 31-May-2028 33,333 31-May-2029 33,334 31-May-2030

Each tranche of vested options may be exercised within 3 years from the respective date of vesting, providing eligible employees a defined window to convert their options into equity shares.

Regulatory Compliance

The grant has been made in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. The disclosure, filed with both BSE Limited and the National Stock Exchange of India Ltd on May 06, 2026, also references SEBI Master Circular No. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated 30th January, 2026. The requisite details under Regulation 30 have been enclosed as Annexure-I with the exchange filing. The Company Secretary, Lipi Jha, signed and submitted the disclosure on behalf of Arvind Fashions Limited.

Arvind Fashions has delivered a strong financial turnaround in FY26, reporting a consolidated net profit after tax (PAT) of ₹124 crores compared to a net loss of ₹34 crores in FY25. The results reflect broad-based improvement across revenue, operating profitability, margins, and capital efficiency, with the Board also recommending a final dividend for the year.

FY26 Annual Financial Performance

The company posted consolidated revenue of ₹5,266 crores for FY26, up 14% from ₹4,620 crores in FY25, driven by growth across direct channels, an 8.1% like-for-like (LTL) retail growth, and a 45% surge in online B2C channel revenues. EBITDA grew 17% to ₹705 crores from ₹602 crores, with the EBITDA margin expanding by 40 basis points to 13.4%. Gross margins improved by 91 basis points to 54.4%, supported by a richer channel mix, reduced discounting, and sourcing gains. Profit before tax (PBT) rose 26.7% to ₹285 crores from ₹225 crores in FY25.

The following table summarises the consolidated annual financial performance:

Metric: FY26 FY25 Y-o-Y Growth Revenue: ₹5,266 Crs ₹4,620 Crs 14.0% EBITDA: ₹705 Crs ₹602 Crs 17.0% EBITDA Margin: 13.4% 13.0% +40 bps PBT: ₹285 Crs ₹225 Crs 26.7% PAT: ₹124 Crs (₹34 Crs) ++

Q4 FY26 Quarterly Highlights

In Q4 FY26, Arvind Fashions continued its growth momentum with consolidated revenue rising 14.8% to ₹1,365 crores from ₹1,189 crores in Q4 FY25, aided by a retail LTL of 7.8% and approximately 42% growth in the online B2C channel. EBITDA for the quarter grew 19.2% to ₹189 crores from ₹159 crores, with the EBITDA margin improving by 50 basis points to 13.9%, supported by gross margin expansion of 20 basis points to 54.1%. PAT for Q4 FY26 stood at ₹47 crores compared to a loss of ₹93 crores in Q4 FY25. PBT grew 15.2% to ₹76 crores from ₹66 crores.

The table below presents the Q4 FY26 consolidated financial summary:

Metric: Q4 FY26 Q4 FY25 Y-o-Y Growth Revenue: ₹1,365 Crs ₹1,189 Crs 14.8% EBITDA: ₹189 Crs ₹159 Crs 19.2% EBITDA Margin: 13.9% — +50 bps PBT: ₹76 Crs ₹66 Crs 15.2% PAT: ₹47 Crs (₹93 Crs) ++

Strategic Outlook and Retail Expansion

Management has expressed confidence that overall demand remains steady, providing a supportive backdrop for continued double-digit revenue growth. For FY27, the company has set objectives to grow revenues at 12-15% with acceleration in adjacent categories, while operating leverage is expected to aid EBITDA and PAT margin expansion. Central to its retail expansion strategy is a plan for a gross opening of approximately 150 stores, largely through the cost-effective FOFO (Franchise Owned Franchise Operated) route, which limits capital outlay while enabling scale. The company also aims for higher net square footage addition compared to FY25, and targets the share of direct channels (retail + online B2C) to grow by 100-200 basis points.

Management noted that while overall demand remains stable, uncertain geo-political scenarios pose inflationary risks, particularly regarding natural gas shortages and rupee pressure. Mitigation measures include leveraging scale to navigate inflation, investing in inventory ahead of the curve, strengthening India-based sourcing, and implementing selective price increases while safeguarding growth.

Balance Sheet and Capital Efficiency

Arvind Fashions' consolidated balance sheet as at March 31, 2026 reflected a capital employed of ₹1,692 crores compared to ₹1,554 crores as at March 31, 2025. Borrowings increased to ₹531 crores from ₹390 crores, while net worth stood at ₹1,161 crores versus ₹1,164 crores in the prior year. The company achieved a return on capital employed (ROCE) of 23.5%, an improvement of more than 300 basis points year-on-year. Net working capital (NWC) days remained stable at 64 days, with inventory turns at a healthy ~3.6x.

Balance Sheet Parameter: 31-Mar-26 31-Mar-25 Net Worth: ₹1,161 Crs ₹1,164 Crs Borrowings: ₹531 Crs ₹390 Crs Capital Employed: ₹1,692 Crs ₹1,554 Crs Inventory: ₹1,605 Crs ₹1,259 Crs Trade Receivables: ₹752 Crs ₹729 Crs Trade Payable & Credits: ₹1,387 Crs ₹1,172 Crs Net Working Capital: ₹969 Crs ₹817 Crs Net Fixed Asset: ₹361 Crs ₹319 Crs

Dividend and Auditor Appointments

The Board of Directors recommended a final dividend of ₹1.60 per equity share of face value ₹4 each for FY26, subject to shareholder approval at the ensuing Annual General Meeting. At its Board meeting held on May 06, 2026, the Board approved the re-appointment of Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 117365W) as Statutory Auditors for a second term of five consecutive years, from the conclusion of the 11th Annual General Meeting until the conclusion of the 16th Annual General Meeting, subject to member approval. The reappointment was made on the recommendation of the Audit Committee.

In addition, the Board also approved the re-appointment of M/S. Mahajan & Aibara Chartered Accountants LLP (Firm Registration Number 105742W) as Internal Auditors of the company for the financial year 2026-27, effective April 1, 2026 to March 31, 2027, as recommended by the Audit Committee. Mahajan & Aibara is a 47+ year-old specialist firm providing internal audit services to multiple Indian corporates, MNCs, and large business houses across India and the Middle East. The firm is led by 12 partners with a multidisciplinary staff strength of 350+ professionals and has significant experience in the retail industry.

The table below summarises the key details of both auditor appointments:

Parameter: Details Dividend Type: Final Dividend Dividend Per Share: ₹1.60 Face Value Per Share: ₹4.00 Subject To: Shareholder approval at AGM Statutory Auditor: Deloitte Haskins & Sells, Chartered Accountants Statutory Auditor Firm Reg. No.: 117365W Statutory Auditor Term: Second term of five consecutive years Statutory Auditor Term Period: From conclusion of 11th AGM to conclusion of 16th AGM Internal Auditor: M/S. Mahajan & Aibara Chartered Accountants LLP Internal Auditor Firm Reg. No.: 105742W Internal Auditor Term: April 1, 2026 to March 31, 2027

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