Mumbai, Nov. 21: UTI Mutual Fund has increased its stake in Arvind Mills by acquiring five lakh more equity shares from the market last month. With this, the fund house’s holding in the denim manufacturer rose to 5.11 per cent.

UTI Mutual Fund now holds over 1.07 crore shares of the company.

Last month, SBI Mutual Fund had also increased its shareholding in Arvind Mills to 5.27 per cent by purchasing 10 lakh shares of the company from the market.

According to the data available with the stock exchanges, mutual funds (including UTI) put together held 13.55 per cent equity of the garment manufacturer as on September 30, 2005, while the promoters’ stake was at 34.51 per cent.

Arvind Mills has been putting up a better performance in recent times, boosted by lower cotton prices and a good demand for denim.

For the quarter ended September 30, the company has recorded an 84 per cent jump in net profit to Rs 37.19 crore compared with Rs 20.14 crore in the corresponding period last year. Total income during the period increased to Rs 435.77 crore against Rs 421.62 crore in the same period last year.

Industry analysts were also quite optimistic about the impact of lower cotton prices and energy cost on the financials of the company, but they cautioned about the significant addition in denim capacity that might lead to lower denim prices in the near future.

Yet, it is felt that with the scale that Arvind has in the denim segment, the company could circumvent the excess supply position.