Arvind Limited sees a credit rating action

On consolidated Q1 FY27 figures, an exact weighted-average cost of debt is not separately disclosed. Using finance costs as a proxy, the current annualized cost is approximately 15.10%:

• Q1 FY27 finance costs: Rs 54.39 Crores ^[1]
• Consolidated total debt: Rs 1,441 Crores ^[2]
• Derived proxy: Rs 54.39 Crores × 4 ÷ Rs 1,441 Crores = 15.10%

Consolidated non-current borrowings, the closest reported proxy for existing long-term debt, were Rs 277.16 Crores ^[3]. This equals approximately 19.23% of total debt (Rs 277.16 Crores ÷ Rs 1,441 Crores, derived).

Interpretation: Rs 277 Crores, or 19.23% of consolidated debt, is the broad long-term-debt pool that could potentially benefit if the upgraded rating enables refinancing at lower rates. However, the filings do not separately identify how much is contractually eligible for refinancing, nor do they disclose a lender-wise repricing schedule. Therefore, 19.23% is the long-term debt mix, not confirmed refinancing eligibility.

Arvind’s latest reported consolidated Net Debt-to-EBITDA is 5.24x in Q1 FY27. ^[4]

The latest-quarter figure is therefore not lower than FY23; it is materially higher. However, the comparison needs caution: the Q1 FY27 ratio appears to use quarter EBITDA, while the FY23 figure is an annual ratio. Q1 FY27 consolidated EBITDA was Rs 258.10 Crores and net debt was Rs 1,353.0 Crores, which mechanically corresponds to 5.24x; the denominator is not annualized in the reported KPI series. ^{[5] [6]}

The rating-agency figure is a different adjusted measure: Ind-Ra reported consolidated net adjusted leverage of 2.09x for FY23, based on net debt including LC acceptances and lease liabilities divided by operating EBITDA. ^[7] It should not be directly substituted for the company’s reported 5.24x Net Debt-to-EBITDA.

Bottom line: the reported 5.24x Q1 FY27 ratio cannot support a conclusion of leverage reduction versus FY23 without normalizing the EBITDA denominator and aligning the definition with the rating agency’s adjusted leverage metric. FY22’s peak level is not quantified in the cited material.