Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We recently interacted with management of Kewal Kiran Clothing (KKCL),
one of the leading manufacturers and retailers of branded apparels in
India. The company has under its belt a portfolio of well‐established
fashion brands like Killer, Lawman Pg3, Integriti and Easies, along with a
well oiled nationwide distribution network. Over the past two years the
company has moved from in‐house manufacturing to outsourcing model,
demonstrated sustainable growth history. KKCL has a strong balance
sheet (cash surplus), steady return ratios (25% ROAE and 33.6% ROCE in
FY11) besides robust free cash flows.
Strong brands across spectrum with robust distribution network
KKCL is a strong player in the branded readymade garments market with brands such as
Killer, Lawman Pg3, Integriti and Easies under its belt. Given the strong brand equity
and pricing power, KKCL has demonstrated sustainable growth trajectory across
economic cycles and against competitive pressures. The company markets its products
through a chain of 223 K‐Lounge showrooms and exclusive brand outlets (EBOs) across
the country. Besides, its products are widely marketed at over 3,500 multi‐brand
outlets (MBOs) and national chain stores like Shoppers Stop and Hypercity.
Asset‐light business model enables brand building focus
The company has altered its business strategy in favour of an asset‐light model by
focusing more on opening franchisee owned/leased stores as against company
owned/leased stores. Now the franchisee bears all capital investments as well as
operational, rental and overhead costs for stores. The in‐house to outsourcing
manufacturing ratio has improved from 85:15 in FY09 to 53:47 in FY11, enabling the
company reduce capital expenditure and labour costs, and concentrate on its core
areas of designing and brand building.
Outlook: Positive
With strong brands and distribution network, we believe KKCL is poised for growth over
the next few years. We do not have a recommendation on the stock as it is not under
our coverage.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
We recently interacted with management of Kewal Kiran Clothing (KKCL),
one of the leading manufacturers and retailers of branded apparels in
India. The company has under its belt a portfolio of well‐established
fashion brands like Killer, Lawman Pg3, Integriti and Easies, along with a
well oiled nationwide distribution network. Over the past two years the
company has moved from in‐house manufacturing to outsourcing model,
demonstrated sustainable growth history. KKCL has a strong balance
sheet (cash surplus), steady return ratios (25% ROAE and 33.6% ROCE in
FY11) besides robust free cash flows.
Strong brands across spectrum with robust distribution network
KKCL is a strong player in the branded readymade garments market with brands such as
Killer, Lawman Pg3, Integriti and Easies under its belt. Given the strong brand equity
and pricing power, KKCL has demonstrated sustainable growth trajectory across
economic cycles and against competitive pressures. The company markets its products
through a chain of 223 K‐Lounge showrooms and exclusive brand outlets (EBOs) across
the country. Besides, its products are widely marketed at over 3,500 multi‐brand
outlets (MBOs) and national chain stores like Shoppers Stop and Hypercity.
Asset‐light business model enables brand building focus
The company has altered its business strategy in favour of an asset‐light model by
focusing more on opening franchisee owned/leased stores as against company
owned/leased stores. Now the franchisee bears all capital investments as well as
operational, rental and overhead costs for stores. The in‐house to outsourcing
manufacturing ratio has improved from 85:15 in FY09 to 53:47 in FY11, enabling the
company reduce capital expenditure and labour costs, and concentrate on its core
areas of designing and brand building.
Outlook: Positive
With strong brands and distribution network, we believe KKCL is poised for growth over
the next few years. We do not have a recommendation on the stock as it is not under
our coverage.
No comments:
Post a Comment