CMP:
Rs. 165.00; Buy at current levels.
Short term Target: Rs. 205, 6 month Target – Rs. 250; STOP LOSS – Rs. 151.80; Market Cap: Rs. 1,312.16 Cr; 52 Week High/Low: Rs. 194.80 / Rs. 122.50
Short term Target: Rs. 205, 6 month Target – Rs. 250; STOP LOSS – Rs. 151.80; Market Cap: Rs. 1,312.16 Cr; 52 Week High/Low: Rs. 194.80 / Rs. 122.50
Total
Shares: 7,95,24,560 shares; Promoters : 5,95,86,390 shares –74.93 %; Total Public
holding : 1,99,38,170 shares – 25.07 %; Book
Value: Rs. 31.76; Face Value: Rs. 1.00; EPS: Rs. 8.10; Dividend: 150 % ; P/E: 20.37 times; Ind. P/E: 11.94;
EV/EBITDA: 11.36.
Total
Debt: 168.34 Cr; Enterprise Value:
Rs. 1,474.82 Cr.
RUPA & COMAPNY LTD: Rupa
was incorporated in 1985 by the Agarwala brothers. In 1995, they took over the
business of Binod Hosiery, a partnership firm incorporated in 1979. They have
emerged, over the years, as the largest hosiery manufacturer in India. The
company produces and markets knitted garments such as innerwear, casuals wear
and also footwear. The company launched Thermocot, the first branded winter
wear in India. The company is also pioneered in printing of the brand name in
front of the vest. This made the logo as a design element which made the
product to be flaunted. RUPA is one of the earliest brands which introduced
celebrity endorsement. This created huge impact and recall value. The Company
has a comprehensive portfolio of product offerings in the knitted innerwear,
casual wear and thermal wear segment for men, women and kids. The company
offers its products principally under the brand name Rupa viz, Rupa, Rupa Frontline, Jon, Air, Macroman,
Macroman M' Series, Euro, Kidline, Bumchums, and Thermocot. Rupa & Company Limited sells its products primarily through own retail outlets,
as well as through independent retailers in India and the Middle East. The
company also exports its products. The Company manages more than 2000 Stock Keeping Units (SKUs), each of them for a particular brand, segment colour and
size. The Company has its two wholly owned subsidiaries- M/s Euro Fashion
Inners International Private Limited which sells premium men’s innerwear
products under the brand “EURO” and Imoogi Fashions Private Limited which has
recently launched apparel for kids of 0-12 years of age under the brand
“IMOOGI”. Rupa also operates a Wind mill for
power generation. The company is locally compared with Lovable Lingerie Ltd,
Page Industries Ltd, V2 Retail Ltd , Trent Ltd, Brandhouse Retail, CESC Ltd,
Future Retail, Arvind Ltd, kewal Kiran Clothing Ltd, S Kumars Nationwide Ltd,
Koutons Retail Lyd, Maxwell Industries Ltd and Globally with I.T Limited of
Hong Kong, Dickson Concepts (International) Limited also from Hong Kong,
Industria DE Diseno of Spain, Inditex SA of Spain, Gunze Ltd of Tokyo, Levi
Strauss & Co of US, Gucci Group NV of Netherlands, Tommy Hifiger BV of
Netherlands, Marc Jacobs International LLC of USA Calvin Klein Inc of USA and
Donna Karan International Inc. form USA.
Investment Rationale:
Outlook and
Valuation:
India is the one of the world's largest producers of
textiles and garments. The potential size of the Indian textile and apparel
industry is expected to reach US$ 22,100 Cr by 2021, according to the reports
by Technopak's Textile and Apparel Compendium 2012. Textile industry has made a
major contribution to the national economy in terms of direct and indirect employment
generation and net foreign exchange earnings. This sector contributes about 14
% to industrial production, 4 % to the Gross Domestic Product, and 17 % to the
country's export earnings. It also provides direct employment to over 3.5 Cr
people. The textiles sector is the second largest provider of employment after
agriculture in India. Thus, the growth and all round development of this
industry has a direct bearing on the improvement of the economy of the nation. The
textiles sector has witnessed a spurt in investment during the last five years.
The industry including dyed and printed, attracted Foreign Direct Investments
(FDI) worth Rs. 5,674.45 crore (US$ 104 Cr) during April 2000 to February 2013. At the current market price of Rs. 165.00, the stock P/E ratio is at 15.65 x FY14E and 13.05 x
FY15E respectively. The Earnings per share (EPS) of the company for FY14E and
FY15E is seen at Rs. 10.54 and Rs. 12.64 respectively. Net Sales and PAT of the
company are expected to grow at a CAGR of 13% and 32% over 2013 to 2015E respectively.
On the basis of EV/EBITDA, the stock trades at 10.97 X for FY14E and 9.54 X for
FY15E. Price to Book Value of the stock is expected to be at 4.89 x and 3.84 x
respectively for FY14E and FY15E. It is expected that the company's surplus scenario is
likely to continue for the next three years and will keep its growth story in the
coming quarters intact. This is an very slow but steady performing scrip an hence,one can ‘BUY’ into this
particular scrip with a target price of Rs. 205.00 for Medium
to Long term investment.
KEY FINANCIALS | FY12 | FY13 | FY14E | FY15E |
---|---|---|---|---|
SALES (₹ Crs) | 711.00 | 829.00 | 931.78 | 1,021.23 |
NET PROFIT (₹ Cr) | 43.55 | 64.77 | 83.85 | 100.51 |
EPS (₹) | 5.48 | 8.15 | 10.54 | 12.64 |
PE (x) | 34.15 | 22.96 | 17.74 | 14.80 |
P/BV (x) | 7.56 | 6.12 | 4.89 | 3.84 |
EV/EBITDA (x) | 18.12 | 13.32 | 10.97 | 9.54 |
ROE (%) | 22.13 | 26.66 | 27.58 | 25.98 |
ROCE (%) | 26.62 | 29.63 | 30.61 | 29.78 |
VIEW THE POWER POINT PRESENTATION ON
A detailed informative post, thank you.
ReplyDeleteI don't know much about stocks & shares. But I have seen about the Rupa & company in some sports related sponsorship's. 'Slow and steady wins the race' - a true quote :)
ReplyDeleteIf you are interested check my post on something related to 'slow and steady' -
http://rahuldravid207.blogspot.in/2013/07/rahul-dravids-inspiring-speech-at.html
HI SHEEBA & SUSHMITHA
ReplyDeleteThanks For Visitng and Commenting on the post..
Do Visit Again
Regards
Bhavikk shah
True Rupa and Co. has achieved much over the years.
ReplyDelete