Any current/future new fundraising through debt or equity?

There is no specific mention of any new fundraising through debt or equity in the current earnings call. The company has focused on reducing its net debt from INR134 crores in March 2023 to INR62 crores as of September 2023. Working capital has also been reduced from INR788 crores to INR743 crores, indicating efficient resource management and no immediate need for fresh funds. Capex guidance for FY24 and FY25 remains steady at INR25-30 crores annually to support business growth, with no indication of additional fundraising. Overall, the company seems focused on internal cash flow and operation

Any current/future capex/capital investment/strategic investment?

Annual capex for business support is around INR 25-30 crores, expected to continue in FY24 and FY25. A new export unit has been commissioned recently with a capacity of 40,000 to 50,000 pieces per day. The export unit is expected to generate INR 100 crores plus revenue at 80%-90% capacity utilization. The company plans to invest in brand building, including marketing and economy brand improvements, with a new brand ambassador appointed. Expansion of Exclusive Brand Outlets (EBOs) is planned, targeting around 10 new stores in the current year, with further 5-7 stores depending on market conditi

Future growth expectations in sales/revenue/volumes?

Targeting 18% to 20% CAGR growth in sales/revenue year-on-year; volume growth is achievable and expected to be strong. Revenue growth value will significantly depend on yarn/raw material prices; stable or firm yarn prices support value growth. Sales volume growth: 15% in Q2, 10% in H1 FY24; premium segment growing fastest with 22%, mid-premium 20%, economy 9%. Geographic expansion planned in Hindi Heartland with 27% growth in H1. Modern Trade segment contributing (5% of H1 revenue) with expansion plans ongoing. Plans for expansion of Exclusive Brand Outlets (EBOs) with 10 additional

Future growth expectations in earnings/operating earnings/profits/EPS?

**EBITDA Margin Guidance:** Company targets 11% to 12% EBITDA margin for the full year FY24, aiming for improvement of 1% to 1.5% annually in FY25 and FY26. **Revenue Growth:** Projected revenue growth of 18% to 20% for FY24, with volume growth being the key driver; value growth depends on raw material (yarn) prices. **Profitability:** PAT grew 22% YoY in Q2 FY24; half-year PAT declined due to raw material cost and mix changes but expected to improve with margin gains. **Long-Term Strategy:** Focus on premiumization, expansion of product mix, retail tie-ups, and contract manufacturing to

Current/ Expected Orderbook/ Pending Orders?

Thermal wear segment had a good order book in Q2 FY24. Quarter two thermal wear sales were around INR 30 crores (7% of total revenue). Much of the thermal inventory held (INR 70 crores as of March) has been utilized. Order book for Q3 FY24 largely depends on the upcoming season and weather conditions in the next 10-15 days. Exports have been muted this quarter; normalization expected from Q4 FY24 when global markets, especially Europe, recover. Contract manufacturing revenue for H1 FY24 was around INR 4.5 crores; scaling up expected as units mature. Future revenue growth depends significantly

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Rupa & Company LtdQ3 FY23Textiles & Apparels

Rupa & Company Ltd Q3 FY23 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹162P/E: 16.4Market Cap: ₹1.1K CrSector: Textiles & Apparels

Management growth scorecard

Revenue

Category 3

Margin

Category 2

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 3

→Targeting 18% to 20% CAGR growth in sales/revenue year-on-year; volume growth is achievable and expected to be strong.
→Revenue growth value will significantly depend on yarn/raw material prices; stable or firm yarn prices support value growth.
→Sales volume growth: 15% in Q2, 10% in H1 FY24; premium segment growing fastest with 22%, mid-premium 20%, economy 9%.
→Geographic expansion planned in Hindi Heartland with 27% growth in H1.
→Modern Trade segment contributing (5% of H1 revenue) with expansion plans ongoing.
→Plans for expansion of Exclusive Brand Outlets (EBOs) with 10 additional stores targeted this year.
→Export unit commissioned to boost exports with expected increase from Q4 onwards.
→Marketing investments and brand ambassador endorsements expected to support growth.
→Overall, company confident of delivering volume growth and achieving revenue targets despite market challenges.

Margin guidance

Category 2

→**EBITDA Margin Guidance:** Company targets 11% to 12% EBITDA margin for the full year FY24, aiming for improvement of 1% to 1.5% annually in FY25 and FY26.
→**Revenue Growth:** Projected revenue growth of 18% to 20% for FY24, with volume growth being the key driver; value growth depends on raw material (yarn) prices.
→**Profitability:** PAT grew 22% YoY in Q2 FY24; half-year PAT declined due to raw material cost and mix changes but expected to improve with margin gains.
→**Long-Term Strategy:** Focus on premiumization, expansion of product mix, retail tie-ups, and contract manufacturing to scale operations and profitability.
→**Exports:** New export unit opened; export revenue expected to pick up in Q4 FY24, contributing positively to growth.
→**Market Segments:** Growth expected across economy, mid-premium, and premium segments, with mid-premium and premium showing higher volume growth rates (20-22%).
→**Operational Improvements:** Working capital reduction and manageable capex aimed to support sustainable margin expansion.

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Fundraise plans

→There is no specific mention of any new fundraising through debt or equity in the current earnings call.
→The company has focused on reducing its net debt from INR134 crores in March 2023 to INR62 crores as of September 2023.
→Working capital has also been reduced from INR788 crores to INR743 crores, indicating efficient resource management and no immediate need for fresh funds.
→Capex guidance for FY24 and FY25 remains steady at INR25-30 crores annually to support business growth, with no indication of additional fundraising.
→Overall, the company seems focused on internal cash flow and operational efficiency rather than new fundraising initiatives at this stage.

Order book

→Thermal wear segment had a good order book in Q2 FY24.
→Quarter two thermal wear sales were around INR 30 crores (7% of total revenue).
→Much of the thermal inventory held (INR 70 crores as of March) has been utilized.
→Order book for Q3 FY24 largely depends on the upcoming season and weather conditions in the next 10-15 days.
→Exports have been muted this quarter; normalization expected from Q4 FY24 when global markets, especially Europe, recover.
→Contract manufacturing revenue for H1 FY24 was around INR 4.5 crores; scaling up expected as units mature.
→Future revenue growth depends significantly on yarn/raw material prices and market demand conditions.
→Price hikes taken in early October were withdrawn due to competition; future pricing will depend on yarn price stability.

Capex plans

Yes

→Annual capex for business support is around INR 25-30 crores, expected to continue in FY24 and FY25.
→A new export unit has been commissioned recently with a capacity of 40,000 to 50,000 pieces per day.
→The export unit is expected to generate INR 100 crores plus revenue at 80%-90% capacity utilization.
→The company plans to invest in brand building, including marketing and economy brand improvements, with a new brand ambassador appointed.
→Expansion of Exclusive Brand Outlets (EBOs) is planned, targeting around 10 new stores in the current year, with further 5-7 stores depending on market conditions.
→The company has made senior management additions, including a Group Chief Digital and IT Officer, focusing on digital and online growth opportunities.

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