** KEWAL KIRAN a MAKING GROWTH FASHIONABLE**
a**Fashiona with “Quality” **is the cornerstone of each collection introduced by the company. The companyas strong fashion forecasting and trendsetting abilities have created brands which are vibrant, trendy and with an attitude. Each brand has been carefully crafted keeping in mind desires and attitudes of specific market segments. Each brand is an expression of its customer.
The trendiest collections are backed by a strong retail and distribution network. The companyas extensive reach has been built in a strategic and planned manner over the years.
****Killer, Easies, Lawman, Integriti ******a leading brands in menas wear in India.**The Company behind them all - Kewal Kiran Clothing Limited. Currently, these brands have an exciting range of western wear for women
Incorporated in 1981, Kewal Kiran Clothing Limited today is amongst the few large branded apparel manufacturers in India. The company has sales in Asia, Middle East and CIS. The company designs, manufactures and markets branded jeans, Semi-formal and casual wear for men and women.
50% of revenue is contributed by KILLER while 25% by Integrity, 20% Lawman and 5% others. Integrity was launched in 2002 and since then got good acknowledgement from customers which reflects in it’s growth. They are increasing franchisee retail stores across pan India and have around 175 stores. ADDICTION is another lifestyle retailing store launched recently to extend existing brands to range of accessories.
KKCL has 108 K-Lounge, 28 exclusive KILLER stores, 22 INTEGRITY, 4 LAWMAN, 7 FACTORY outlet and 4 ADDICTION retail stores/EBOs.
With huge business scalability and best management in place, this company is all set to become very big branded retailer.
Most imporantly, management shown great ability to grow business with very less capital. Hence it’s asset light business and in same context it can be directly compared to any good FMCG. Only few out of many retailser succeed and KKCL has many ingredients to make it HUGE successful. Hence we have to be very careful while investing in any retailers. Some of them with bad management fails and business detiorates like Koutons or Cantabil Retail…
Unlike other retailer, KKCL is outstanding in managing excellent inventory and debtors.
It’s debt free and cash rich company with cash and equivalent of 120+ crores. Again very hard to find this quality in their competitors.
Great return ratios of RoCE of 79% and improving RoE of 60% [after excluding idle cash on books]. Doubt if any of competitors can even come close to this ratio.
Excellent balance sheet with consistent improvement in Free Cash Flow. Again, no competitor can beat it.
I can’t think of anything that can go wrong with this business and don’t see any reason why it should discount only 11 times FY12 earnings while other similar business demands 25-30 times discount.
Company should at rate of minimum 25-30% CAGR for next few years.
DISCLOSURES a I hold KKCL.