Arvind: Strike at Santej Plant Called Off

Arvind Limited is a fashion powerhouse that also provides state-of-the-art engineering solutions. Headquartered in Naroda, Ahmedabad, the company has its manufacturing units at Santej. It manufactures cotton shirting, denim, knits, and khaki fabrics and is India’s largest denim manufacturer. The company’s brand portfolio includes domestic and international brands such as Flying Machine, Arrow, US Polo, Izod, Elle, etc. It is also equipped for manufacturing chemicals, petrochemicals, pharmaceuticals, and allied industries.

Arvind Limited’s previous filing

On 22 May 2024, Arvind Limited intimated the exchanges about the strike by workers in Santej after several media channels were reporting about its impact on the company’s operations. The company then clarified that the workers’ strike has a partial impact on the operations of the company and informed the exchanges that resolution measures are being adopted by the company to resolve the matter. Exploitation, no fixed hours, and no increment in salaries were some of the main reasons behind the strike.

Arvind Limited’s recent filing

Arvind Limited has now issued another regulatory filing on 12 June 2024 to provide an update on the strike at the Santej plant. This issue clarified that the worker strike was declared illegal by the Labour Court via an order on 6th June 2024. The company also shared that the estimated potential loss of revenue from this strike has been around Rs. 180-200 Cr. The EBIDTA also reduced to Rs.60-65 Cr, about 7% of the consolidated EBIDTA. 

History of strikes

With a foundation dating back to 1931, the company has faced many such strikes in the past. Similar strikes of workers with demands of higher wages, and complaints of exploitation had also led to blockage of operations in the Santej plant. 

Conclusion:

The 12 June closure order of the workers’ strike had a positive impact on the company’s share price which jumped by 3%.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions