Rupa & Company is one the largest knitwear brands in India engaged in the manufacturing, branding and marketing of innerwear and casual wear for men and women. The Company was established in 1968, and today it is one of the leading players in Indian Knitwear Industry.
Among the prominent awards won by the Company are Worldwide Achievers Business Leadership Award (2013-14), Time Research Business Leadership Awards for Brand Excellence in Innerwear (2013), and Global awards for Brand Excellence by World Brand Congress during the year 2010. Recently, the Company has been selected as the Best Corporate Brand 2016 by The Economic Times of India.
Replying to IIFL, K B Agarwala said, “We believe that there is huge potential for organised players to gain market share in the Indian innerwear industry.”
How will GST impact Rupa & Company Limited and the overall innerwear textile industry?
The impact of the Goods and Services Tax (GST) would be neutral to positive across segments in the textile industry compared to the earlier tax regime. For Rupa & Company Limited it would be positive because of the lower rate of tax and the fact that Company would be able to take input credit based on the supply of its products and related services.
The Indian innerwear industry is highly unorganised with unorganised players having more than 50% market share. We believe that there is huge potential for organised players to gain market share in the Indian innerwear industry, especially, after the recent demonetisation drive and the restrictions placed on cash-based transactions. Further, GST would be a major positive for organised players, which is expected to bring down the manufacturing and warehousing cost and would make the market relatively more competitive for the organised players. Further, the organised players would also get set-off on service tax paid on marketing, logistic and outsourcing services (approx. 12% of the total revenue of the company).
Can you throw some light on company’s strategies for growth going forward?
Our company strives to strengthen our female innerwear segment. We are also open to expansion in this segment through inorganic route in the domestic market. As a result, we are looking for a tie-up in this segment.
The group Rupa is strengthening its position in the super-premium segment by acquiring the exclusive license for the manufacturing, marketing and sales of innerwear and other products of foreign brands in India, through its wholly-owned subsidiary, Oban Fashions Private Limited. During 2016-17, Oban acquired an exclusive license from French Connection Limited for the brand 'FCUK'. It also acquired the brand ‘Fruit of the Loom’ from a wholly-owned subsidiary of Berkshire Hathaway Company. We believe that these licenses would help the Rupa Group to further strengthen and cement its position in the super-premium category.
Furthermore, the company is also consolidating its position in direct distribution and expanding its presence in Southern India through aggressive marketing, sales and distribution. The company is also exploring the international markets (export) aggressively.
Will Rupa & Company face inventory issues post-GST?
Rupa & Company will not face any inventory issue post-GST. The company would be able to avail input credit on the existing inventory, as clarified by the government.
Will you please elaborate product wise market share and revenue break up for the company?
Rupa has a diversified revenue mix across brands, customer segments and geographically. It enjoys a very strong position in Eastern India and has gained a significant presence in the Northern and the Western regions also. The company’s strategy is to foray in the newer markets including Southern India and make its presence felt across the country. Every state has a different consumer preference and Rupa has a wide range of products, which helps it to strategise the product offering suitable for different consumer preferences of the respective states.
Sales Value Mix – Brand Wise
The government is planning a new textile policy which will be ready in the next two months. How will it help the industry?
The Government is in the process of finalising the draft guidelines of National Textiles Policy. The policy aims to achieve $300 billion (over Rs 20 lakh crore) worth of textile exports by 2024-25 and create an additional 35 million jobs. It is expected to have a positive impact on the textile industry.
Please elaborate on your brands and how they are able to boost company’s financials? Is the company planning to acquire more brands?
The company caters to all categories including men, women and kids with its wide bouquet of brands under the umbrella, 'Rupa'. The brands are endorsed by leading celebrities including Ranveer Singh, Sidharth Malhotra and Bipasha Basu. In order to nurture its brands, the Company has been consistently involved in robust advertisement and brand promotion activities, thereby spending extensively on brand communication. The company also plans to expand its women’s innerwear segment and is looking for a tie-up for that. The business opportunity in women's innerwear is huge, as it comprises 60% of the total Indian innerwear market in value terms and is growing at a brisk pace, as compared to the average industry growth.