Arvind Fashions posted 15.5% revenue growth in the June quarter and plans to raise marketing spend further to sustain that pace this year.

Revenue for the quarter came in at Rs 1,279 crore, up from Rs 1,107 crore a year earlier. Operating profit, or EBITDA, grew even faster, up 19.6% to Rs 160 crore, with margins expanding to 12.5%.

Gross margins also improved, helped by fewer discounts and more full-price sales. Kulin Lalbhai, the company’s Vice Chairman, said in an interview that Arvind Fashions is comfortable holding onto its usual growth targets.

The company expects around 15% revenue growth going forward, along with 40 to 50 basis points of margin expansion each year, even with raw material costs rising and marketing spend going up too.

That marketing spend is set to jump by more than 20% this year. Right now it sits at around 4% of turnover, and the company expects that to cross 5% over the next few years as it pushes to build brand recall.

Growth isn’t coming from just one place either. The company is adding retail space at a rate of 15% a year, and its online business grew 38% during the quarter.

Newer categories like footwear, womenswear, innerwear and kidswear grew 25%, faster than the company’s older, more established lines.

Direct-to-consumer channels, meaning stores and online sales the company runs itself rather than through wholesalers, now make up 62% of total revenue. Like-for-like sales at these stores grew 11.6% during the quarter.

Arvind Fashions currently has a market capitalisation of Rs 6,334 crore. Over the past year, its stock has declined more than 5%, even as the underlying business kept growing.

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