Rupa & Co spurts after turnaround Q4 numbers

Rupa & Company soared 14.11% to Rs 452.45 after the company posted a consolidated net profit of Rs 65.90 crore in Q4 FY21 compared with net loss of Rs 4.28 crore in Q4 FY20.

Jun 01, 2021 11:06 IST capital market

Net sales surged 153% to Rs 453.06 crore in Q4 FY21 over Q4 FY20. Profit before tax stood at Rs 88.33 crore in Q4 FY21 compared with Rs 1.37 crore in Q4 FY20. EBITDA came at Rs 90.6 crore in Q4 FY21 from Rs 7.9 crore in Q4 FY20. EBITDA margin improved to 20% in Q4 FY21, higher than 4.4% in Q4 FY20.

The company posted a 183.1% jump in net profit to Rs 175.26 crore on 35% rise in net sales to Rs 1,309.42 crore in the year ended March 2021 (FY21) over the year ended March 2020 (FY20).

Commenting on the results, Dinesh Kumar Lodha, CEO said, Despite the challenges faced due to the pandemic, Rupa & Company recorded its highest ever revenues and profits in FY2021. This was possible due to increased sales volumes, changes in product mix, improved operating efficiencies and cost reduction strategies. For FY21, revenues increased by 35% whereas EBITDA & PAT increased significantly by 126% and 183% respectively. During the year, our working capital has reduced by 54 days to 165 days. Going ahead, we expect collection efficiencies which would reduce working capital further. In line with evolving consumer preferences and market demands, the company has introduced new varieties in each sub-brand. These products have the latest fabric innovations, cutting-edge production techniques, and advanced design elements to give the finest experience of style and comfort to the end-user. Rupa has a strong PAN India presence. Our strategy is to foray in newer markets by appointing new distributors and building experienced team and further strengthen our share in the existing markets. This would lead to increased investments in brand development across new geographies. During the year gone by, the company has spent 4.2% on brand development. We expect branding and advertisement cost to come back to normalcy i.e., 6-8% of revenues in FY22. The companys focus is to increase share in premium and super premium category, improve focus on women, casual, and thermal wear, and foray in newer markets with higher penetration in the existing markets. We are witnessing a second wave of CoVID-19 infections, and this has once again resulted in disruption to our business as several states have announced restrictions. We expect business to start gaining traction in June 2021 and expect higher than industry growth for the coming year.

The board has recommended a total dividend of Rs 5 per equity share for the financial year ended 31 March 2021.

Net debt is Rs 27 crore, reduced from Rs 177 crore in FY20. Cash & bank balances are at Rs 118 crore, improved from Rs 1.7 crore in FY20.

Shares of Rupa & Company hit a 52-week high of Rs 474.75 in intraday today. The stock has zoomed 203% from its 52-week low of Rs 149 hit on 2 June 2020.

Rupa is one of the leading knitwear brand in India, covering the entire range of knitted garments from inner wear to casual wear. Rupa has a broad product portfolio of innerwear, thermal wear, and casual and athleisure wear.

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