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India Equity Research Reports, IPO and Stock News
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C h a n g i n g p r o d u c t m i x t o a i d p r o f i t a b l e g r o w t h …
We met the management of Rupa & Co (Rupa) to understand the
company’s business model and get a sense about the company’s future
plans. Rupa was incorporated in 1985 by the Agarwala brothers. The
company has a comprehensive portfolio of product offerings in the
knitted innerwear, casual wear and thermal wear segment for men,
women and kids. Rupa has a large number of stock keeping units (SKUs),
each of them for a particular brand, segment colour and size catering to
customers of all age groups. Over the years, the company has created
over 10 sub-brands catering to various socio-economic classes. Rupa has
outlined various plans for growth; both organic (increasing retail
presence) and inorganic. The company is also evaluating various options
ranging from brand licensing to joint ventures.
Higher share of premium categories to aid margin expansion
Rupa has ventured into the premium and super-premium categories over
the last few years. The share of premium and super-premium products
has increased from 3.5% in FY07 to 14.3% in FY11. Accordingly, the
company witnessed an operating margin expansion from 7-8% in FY07 to
10.2% in FY11.
Expanding retail presence to enable topline growth
Rupa’s topline has grown at a CAGR of 22.1% during FY08-11. Going
forward, the company plans to expand its retail presence to further aid
growth. Rupa has opened two outlets in Pune and Ranchi as a pilot
project. The company plans to gradually increase its retail presence,
going forward. Rupa plans to add these stores on a franchising model,
whereby the inventory will not be held on the company’s books.
Improving return ratios
With the increasing share of premium and super-premium category
products, the company has witnessed an improvement in the return
ratios. The return on net worth has improved from 11.3% in FY09 to
19.6% in FY11. Similarly, the return on capital employed has improved
from 15.2% in FY09 to 17.4% in FY11.
V i e w
Rupa has been one of the oldest players in the Indian branded innerwear
market. The company operates on an asset light business model, wherein
~70% of the units sold are outsourced. Going forward, Rupa’s plans to
grow; both organically (increasing retail presence) and inorganically will
support revenue and profitability growth.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
PDF link for report- click here
C h a n g i n g p r o d u c t m i x t o a i d p r o f i t a b l e g r o w t h …
We met the management of Rupa & Co (Rupa) to understand the
company’s business model and get a sense about the company’s future
plans. Rupa was incorporated in 1985 by the Agarwala brothers. The
company has a comprehensive portfolio of product offerings in the
knitted innerwear, casual wear and thermal wear segment for men,
women and kids. Rupa has a large number of stock keeping units (SKUs),
each of them for a particular brand, segment colour and size catering to
customers of all age groups. Over the years, the company has created
over 10 sub-brands catering to various socio-economic classes. Rupa has
outlined various plans for growth; both organic (increasing retail
presence) and inorganic. The company is also evaluating various options
ranging from brand licensing to joint ventures.
Higher share of premium categories to aid margin expansion
Rupa has ventured into the premium and super-premium categories over
the last few years. The share of premium and super-premium products
has increased from 3.5% in FY07 to 14.3% in FY11. Accordingly, the
company witnessed an operating margin expansion from 7-8% in FY07 to
10.2% in FY11.
Expanding retail presence to enable topline growth
Rupa’s topline has grown at a CAGR of 22.1% during FY08-11. Going
forward, the company plans to expand its retail presence to further aid
growth. Rupa has opened two outlets in Pune and Ranchi as a pilot
project. The company plans to gradually increase its retail presence,
going forward. Rupa plans to add these stores on a franchising model,
whereby the inventory will not be held on the company’s books.
Improving return ratios
With the increasing share of premium and super-premium category
products, the company has witnessed an improvement in the return
ratios. The return on net worth has improved from 11.3% in FY09 to
19.6% in FY11. Similarly, the return on capital employed has improved
from 15.2% in FY09 to 17.4% in FY11.
V i e w
Rupa has been one of the oldest players in the Indian branded innerwear
market. The company operates on an asset light business model, wherein
~70% of the units sold are outsourced. Going forward, Rupa’s plans to
grow; both organically (increasing retail presence) and inorganically will
support revenue and profitability growth.
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