Kewal Kiran Clothing Ltd (KKCL) - Excellent branded retail play


I couldn’t go for this meeting due to some last minute changes. But Nagabrahma from ValuePickr did attend.

Don’t have views on this company. I somehow don’t get “B” grade BRANDS. I find the stores of Lawman, Integrity and Killer in my locality always empty - been watching off & on last 2+ years. Yet the numbers look impressive:)


But thats true even for Jockey stores though Page Industries has very impressive performance



Agree with you Donald, i too could never imagine the Indian Denim companies having a brand moat. Many came and went, if am not wrong even Newport was a rage for sometime. Except the good old Wrangler,Levis, Pepe and the kind.

I am not expecting “Killer” to be no-1 denim brand or a big brand moat. I am okay with no 2 or 3 with prudent financial management.

Most of the other Indian denim brandsFlying Machine/Newport/Ruf & Tufwere owned by Arvind (which used to be kind of Blue Chip) and because of financial mis-management - they are not that profitable.

This is not a company which is a “consensus trade”. Numbers tell a different story and people are questioning “everything”. Valuations are NOT expensive. I will watch out.

I am not very enthused with Lawman, Integriti, etc., but Killer does looks promising and its not fair to compare it with Newport. Newport used to have buy 1 get 1 free kind of offers and that did not help the brand and its pricing power.

Those wanting to do more work on KKCL - please contact Nagabrahma. He can share his views with you (if I remember he was pretty positive, then) and maybe share his notes too. Naga is a very detail oriented guy :). he may also put you in touch with others invested/tracking closely KKCL.

He is contactable atnagabrahmagv at gmail dot com.

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Thanks Donald for the help.

Please see the following post on KKCL from Prof. Bakshi

Also you see Ayush’s response in the comments section

Thanks Rudra & Ayush. 2 takeaways for me

a) Power of the Franchisee model if scaled up well - as a very effective entry barrier - against MNC style company owned premises retailing

b) Increasing price realisation over the years

In Jun 2011 when Vipul had started this post the price of KKCL was hovering around Rs. 500+ mark and today it has crossed Rs. 2000. Price has gone up by 4x. Net Profit has almost doubled from 2010. The margins are in late teens. I have the following questions:

  1. What is the future of KKCL in India in comparison to brands like Levis and the like?
  2. Can I enter at the current levels?

Readers, request your feedback on the same.



Growth is slowing down + absence of any strong moat .

Note : Seriously thinking of selling .

I have grown up in Patna in 90s and during my school days killer and flying machine were the brands to go for. Do not know how much things have changed in tier 2 cities in terms of brand perception

Checked with few young relatives who are doing their schooling in Patna. Killer is a well recognized brand and almost at par with Levi’s , pepe etc. They said they prefer integriti over killer due to premium material. Also,Checked few reports which says that Indian Denim market will grow with 15% for next 2-3 year and reach a market size of 17500 crore. If we break-up cities, tier- I cities contribute to 35% of sales though have only 8% of population contributes 50% of market. So, huge scope of growth in tier II,III cities. Also, I tried to get some clues about how it fares compared to other brands and just thought of using internet as brand perceptor. Did a google keyword trend:

  1. In terms of keyword search, huge spike in 2011. Also, it stnds above spyker and diesel. tough spyker is resptricted to Maharashtra.

  2. Another interesting things ios there are variations in state wise distribution of various brand.

Does anyone have conf call transcripts

Sluggish revenue growth has been a major concern for KKCL as it has always refrained from giving heavy discounts. To address this issue, the management has now started participating in discounting activities across its product range. The management said it had to modify its strategy given the aggressive competitive scenario. However, it does not want to make it a practice over a longer term as it is margin dilutive.

As a result, KKCL reported healthy revenue growth 17.7% YoY to INR 111.1 crore. The topline was mainly driven by volume growth of 21.8% YoY to 11.6 lakh pieces.

Higher discounting impacted gross margins negatively, which contracted 90 bps YoY to 49.5% (Q2FY19: 54.1%).

Ref: Q3FY19 Report by ICICI Securities

According to past three year’s annual report

	Sales in FY 2018 ~	Sales in FY 2017 ~	Sales in FY 2016

Killer ~ 244.40 crores ~ 239.73 crores ~ 234.41 crores

Lawman Pg3 ~ 75.89 crores ~ 90.5 crores ~ 92.95 crores

Integriti ~ 95.10 crores ~ 111.42 crores ~ 93.78 crores

Easies ~ 20.18 crores ~ 17.47 crores ~ 15.98 crores

Addictions ~ 21.41 crores ~ 22.21 crores ~ 15.9 crores

Interested to know how the mix changes this year.

Disc. Not invested. Closely learning about the industry and the company. Own multiple products of KKCL. Pleased with the quality.

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So, Kewal Kiran is now present in Male - Female Western dresses, Female Ethnic dresses. It has presence in Shoes, Luggage etc. categories too, which contributes little to total revenue. I think if the management does things a bit proactively, sacrificing the sanity of the balance sheet a bit, there are enough growth drivers available to make it a multi-billion market cap company.

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Q1 FY2020 Results Update by ICICI Direct

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How to value Kewal Kiran at price of 968

  • It has PE of 15
  • ROCE 25+
  • Dividend 3.5%

It is showing QoQ growth in revenue as well. Will the PE rerating happen? What is holding it to get higher PE ratio.


  1. OPM is steady decreasing but still above 20%
  2. Debtor Days has dramatically increased in last 4 years
  3. Brands are good but still not the first choice/premium. (My view)
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