Arvind Limited is preparing an ambitious expansion of its garment manufacturing business as it looks to increase its presence in the global apparel supply chain. The Ahmedabad-based textile company is evaluating new greenfield manufacturing investments while expanding existing facilities, with management targeting approximately 15% growth in its garmenting business.
The company is also considering a more aggressive growth model that could support garmenting growth of around 25%, although this remains at the planning stage. Arvind Vice Chairman Punit Lalbhai said the immediate priority is to maximise existing capacity, execute ongoing projects and establish the next phase of manufacturing expansion without compromising operational performance. <Cite refs={[“turn817691search2″,”turn817691search6”]}/>
Arvind Plans Larger Investment in Garment Manufacturing
Arvind is looking to increase its garment manufacturing capacity through a combination of brownfield expansion and new greenfield facilities.
During its Q2 FY27 earnings call, management indicated that the company was developing ambitious plans for garment manufacturing investments on a scale larger than its previous projects.
However, the company is not rushing to announce a final expansion programme. Management wants to first utilise existing capacity and execute the greenfield projects already under consideration.
The immediate strategy includes:
- Expanding production capacity at existing manufacturing locations.
- Developing one or two additional greenfield garmenting projects.
- Increasing production of denim garments, knitwear and essential apparel.
- Strengthening the company’s integrated fabric-to-garment manufacturing model.
- Using external manufacturing partners where additional capacity is required.
Management said these initiatives should support the current target of approximately 15% growth in garmenting. A separate model targeting around 25% growth is being evaluated for a later phase. <Cite refs={[“turn817691search2″,”turn817691search6”]}/>
Varanasi Garment Factory Adds ₹250 Crore Revenue Potential
One of Arvind’s important expansion projects is its new greenfield garment manufacturing facility in Varanasi, Uttar Pradesh.
The first phase of the facility was commissioned in October 2026 and inaugurated by Prime Minister Narendra Modi on October 25.
The facility has been designed to strengthen Arvind’s manufacturing capabilities in knitted garments and essential apparel, particularly for international customers.
Key details of the Varanasi project include:
| Particulars | Details |
|---|---|
| Location | Varanasi, Uttar Pradesh |
| Land area | Approximately 5.5 acres |
| Built-up area | Approximately 65,000 sq. ft. |
| Phase 1 manufacturing lines | 10 |
| Phase 1 investment | Approximately ₹75 crore |
| Annual revenue potential | Approximately ₹250 crore |
| Additional Phase 2 investment | Approximately ₹75 crore |
| Expected employment across both phases | Around 1,000 jobs |
The first phase is expected to generate around ₹250 crore in annual revenue once it reaches full utilisation. The second phase is expected to require another investment of approximately ₹75 crore.
Management has indicated that the Varanasi project will add around 25 million pieces of essential apparel capacity across its phases. These products are smaller garments and are not counted in the company’s conventional full-garment volume metric.
The facility is expected to strengthen Arvind’s ability to serve customers across Europe, the UK and other international markets. <Cite refs={[“turn817691search0″,”turn817691search6″,”turn817691search5”]}/>
Garmenting Business Already Crossed ₹2,000 Crore Revenue
Arvind’s garmenting business has become an increasingly important part of its textile operations.
During FY26, garmenting revenue reached approximately ₹2,020 crore, compared with ₹1,699 crore in FY25. Full-garment volumes increased to approximately 41.6 million pieces from 37.2 million pieces, representing growth of around 12%.
The company delivered 42 million garment pieces during FY26, according to its annual report.
| Metric | FY25 | FY26 |
|---|---|---|
| Garmenting revenue | ₹1,699 crore | ₹2,020 crore |
| Full-garment volume | 37.2 million pieces | 41.6 million pieces |
| Revenue growth | — | Approximately 19% |
| Volume growth | — | Approximately 12% |
The growth reflects stronger demand in knitwear and denim garments, alongside the company’s effort to move further into finished apparel manufacturing.
For Arvind, garmenting offers an opportunity to capture more value from the fabrics it already produces. Instead of selling only denim or woven fabric to customers, the company can manufacture finished products and provide integrated supply-chain services. <Cite refs={[“turn817691search4″,”turn817691search1”]}/>
Why Arvind Is Focusing on Vertical Integration
Vertical integration is central to Arvind’s garmenting expansion strategy.
The company already has manufacturing capabilities across denim, woven fabrics, knits and other textile categories. Expanding garment production allows it to connect these operations more closely with finished apparel manufacturing.
This approach offers several potential advantages:
- Greater value addition: Manufacturing finished garments allows Arvind to participate in more stages of the apparel value chain.
- Better customer relationships: Global brands can source fabric and finished garments from a single integrated supplier.
- Supply-chain efficiency: Better coordination between fabric production and garment manufacturing can improve planning and delivery.
- Product development: Integrated capabilities can help the company respond more quickly to customer designs and changing fashion requirements.
- Manufacturing flexibility: Multiple production locations and external partners can help Arvind serve changing customer requirements.
The strategy is particularly relevant as international apparel brands look to diversify sourcing and reduce dependence on concentrated manufacturing locations.
Arvind has also expanded its international presence through manufacturing operations and customer-facing initiatives in different markets, including Bangladesh and Egypt. <Cite refs={[“turn817691search4″,”turn817691search6”]}/>
₹120–150 Crore Garmenting Capex Planned in FY27
Arvind is increasing its investment in manufacturing capacity during FY27.
During its Q2 earnings call, management indicated that the company’s total capital expenditure for the financial year could exceed ₹500 crore.
Of this amount, approximately ₹120–150 crore is expected to be allocated to garment manufacturing, while around ₹200 crore is planned for advanced materials. The remaining investment will cover fabric operations and other requirements.
| Investment category | FY27 planned allocation |
|---|---|
| Garmenting | ₹120–150 crore |
| Advanced materials | Approximately ₹200 crore |
| Fabric and other investments | Remaining allocation |
| Total company capex | More than ₹500 crore |
The company spent approximately ₹372 crore on capital expenditure during the first half of FY27.
Management has indicated that capacity expansion will be implemented progressively, with facilities taking time to reach optimal utilisation. A garment factory generally requires a ramp-up period as production lines, workers, customer orders and operating processes are brought together. <Cite refs={[“turn817691search2″,”turn817691search1″,”turn817691search3”]}/>
Arvind Reports Strong Q2 FY27 Financial Performance
Arvind reported record quarterly revenue and EBITDA for the September 2026 quarter.
Consolidated revenue increased 23% year-on-year to ₹2,919 crore, while EBITDA rose 27% to ₹331 crore.
The textile division recorded revenue of approximately ₹1,999 crore, up 11%. Garmenting revenue stood at ₹577 crore, supported by 9% volume growth, according to the company’s quarterly business update.
| Financial metric | Q2 FY27 | Year-on-year growth |
|---|---|---|
| Consolidated revenue | ₹2,919 crore | 23% |
| Consolidated EBITDA | ₹331 crore | 27% |
| Profit after tax | ₹123 crore | 16% |
| Garmenting revenue | ₹577 crore | — |
| Garmenting volume growth | — | 9% |
Despite the growth, the company continues to face higher raw material and energy costs. Management said cost inflation is affecting margins, although price increases negotiated with long-term customers are expected to provide some relief in subsequent quarters.
The company’s credit rating was also upgraded from AA- to AA with a stable outlook by Care Ratings. <Cite refs={[“turn817691search0″,”turn817691search1″,”turn109148news10”]}/>
Arvind’s Garment Expansion Could Benefit From Global Sourcing Diversification
Global apparel companies are increasingly looking for manufacturing partners across multiple countries to diversify their supply chains.
India could benefit from this shift because of its textile manufacturing base, availability of skilled labour and established fabric production capabilities.
Arvind is positioning itself to capture this opportunity by expanding its finished-garment manufacturing operations. Its integrated model allows it to serve customers across fabric development, product design and garment production.
However, competing in the global apparel market also requires competitive manufacturing costs, reliable delivery schedules, quality control and compliance with international sourcing requirements.
The company will need to ensure that new factories achieve sufficient utilisation and productivity to generate attractive returns on the capital invested.
The Bigger Picture
Arvind’s expansion plans reflect a broader shift in India’s textile industry from fabric manufacturing towards higher-value finished apparel production. Garmenting allows textile companies to capture a larger share of the supply chain while building closer relationships with international brands.
For India, the opportunity is linked to changing global sourcing strategies and the need for diversified manufacturing locations. Arvind’s investments in Varanasi and other facilities could contribute to this shift, but the success of the strategy will depend on execution, factory utilisation, customer demand and cost competitiveness.
Looking Ahead
In the near term, Arvind is focused on commissioning and ramping up its Varanasi facility, maximising existing capacity and executing planned garmenting investments. Management is targeting approximately 15% growth in the business, while the more ambitious 25% growth model remains under consideration rather than a confirmed operating commitment.
The next few quarters will be important in determining how quickly the new capacity translates into revenue and profitability. If the company successfully executes its expansion plans and secures sufficient orders from global customers, garmenting could become an increasingly important growth driver within Arvind’s textile business.
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