TCNS Clothing- Play on Ethnic wear of woman

TCNS Clothing Co. Limited is India’s leading women’s branded apparel company in terms of total number of exclusive brand outlets as of May 2018, according to Technopak. The Company designs, manufactures, markets and retails a wide portfolio of women’s branded apparel across multiple brands. The Company sells its products across India and through multiple distribution channels. As of March 31, 2018, the company sold its products through 465 exclusive brand outlets, 1,469 large format store outlets and 1,522 multi-brand outlets, located in 31 states and union territories in India. As of March 31, 2018, the company also sold its products through six exclusive brand outlets in Nepal, Mauritius and Sri Lanka. In addition, the company sold its products through their own website and online retailers.

The company’s product portfolio includes top-wear, bottom-wear, drapes, combination-sets and accessories that cater to a wide variety of the wardrobe requirements of the Indian woman, including every-day wear, casual wear, work wear and occasion wear.

Mr. Onkar Singh Pasricha and Mr. Arvinder Singh Pasricha are promoters of the company, each have over 40 years of experience in the apparel industry, and the Managing Director, Anant Kumar Daga, leads an experienced and professional management team. The Management team, including Anant Kumar Daga currently has a significant ownership stake in the Company. The shareholders also include a fund affiliated with TA Associates, a marquee private equity group.

Mainly 3 brands

a). Brand “W”:W” is a premium fusion wear brand, which merges Indian and western sensibilities with an emphasis on distinctive design and styling. This brand is targeted primarily at the modern Indian woman’s work and casual wear requirements. “ W” has been recognized as the ‘ IMAGES Most Admired Fashion Brand of the Year : by India Fashion Forum consecutively for past three years between 2015 to 2017 . “W” had 258 exclusive brand outlets and 676 large format store outlets located across 148 cities in India and five outlets outside India.

b). Brand “Aurelia”: Aurelia is a contemporary ethnic wear brand targeted at women looking for great design, fit and quality for their casual and work wear requirements. “Aurelia” had 159 exclusive brand outlets and 629 large format store outlets located across 149 cities in India and one outlet outside India.

c) Brand “Wishful”. Wishful is a premium occasion wear brand, with elegant designs catering to women’s apparel requirements for evening wear and occasions such as weddings, events and festivals. The Company is leveraging their “W” store network for selling Wishful products, however, they recently launched first exclusive brand outlet for Wishful, in September 2017.

Revenue from sales of products under brand “W” , “Aurelia” & “Wishfulgrew” is growing at a CAGR of 48.67 %, 70.82 % & 66.66 % respectively during FY13 to FY17 . Moreover, in FY17 the revenue from “W” , “Aurelia” & “Wishfulgrew” accounted for 61.23% , 30.35 % & 8.41% respectively.

Slowdown in demand for TCNS’ products due to change in customer preferences and lower
brand appeal are key risks. Competition from other brands, including from private labels
retailed by channels such as large format stores and e-tailers are also risks. F

Disclosure: Not invested

looking for views from everyone
It is a good play on branded ethnic wear of ladies, good growth in past and looking for better growth ahead


What are the growth prospects of TCNS and would they be able to maintain their RoCE expectations

Let’s wait for results

Good growth prospects

Roping in Disha Patani to boost sales last quarter

Let’s wait for con call after results

I have been doing some reading on TCNS clothing and posting my observations below. Looking for views from fellow members.
(This is my first time posting a profile for a company so there might be things which I’m not sure whether they really contribute to the assessment of a company or not. Looking for some feedback on that too.)

Good RoE, OPM, Sales and Profit Growth
Nil debt

Valuation history:
2011 - Matrix Partners acquires stake, Valuation 375cr (Source:
Aug 2016 - TA associates acquires stake, Valuation 2130cr (Source:
(notable investments by TA Associates - ACT broadband, Billdesk, Lal Path Labs)
July 2018 - IPO, Market Cap 4150cr
Nov 2019 - Market cap 4444cr

Brand & market:
Niche market segment: women’s ethnic wear and fusion wear

Different brands for different quality and price segments:
W: Premium Fusion wear, preferred by working women
Aurelia: Contemporary Ethnic wear; preferred by upper middle class women
Wishful: Premium Occasion wear

Popular among women, one of the must go-to places for ethnic

Wide network of stores, present in almost every mall in tier 1 and tier 2 cities
Mix of EBOs and MBOs (lifestyle, shopper’s stop, etc)
Expansion into neighbouring international markets (Mauritius, sri lanka)

Strong online presence:
Available online on every major online shopping platform (myntra, jabong, amazon, flipkart, nykaa)
Decent social media presence
Instagram followers:
Aurelia - 70k
W for Woman - 205k
BIBA - 270k
Global Desi - 324k
Fabindia - 313k

Brand ambassador - Disha Patani, Campaign - That Disha Look

Very less competition with similar reach
BIBA, Global Desi, Soch, Pantaloons, Anokhi, AND, Rangmanch
Fabindia - better quality but more expensive and relatively limited kind of range
Almost no chances of having foreign competition even in the future since ethnic wear native to India
Competition from local stores

Well qualified and well experienced management and directors

MD: Anant Kumar Daga (Previously Director, Sales & Retail with Reebok)

Bhaskar Pramanik - (Senior Advisor, Rothschild & Co., previously Chairman, Microsoft India)
Sangeeta Talwar - (previously involved in launching major Nestle products, Tata Global Beverages, Mattel India)
Naresh Patwari - TA Associates

Proactive and non-emotional about closing about stores not doing well or shift to better local locations

Low promoter stake
Low dividend payout
IPO’d in 2018, so financials only available for last 4 years

Need to dig further:
Trademark dispute with Wrangler
Concentration of warehouses in Delhi NCR
Interest cost increased in last quarter (Jun 2019)
ESOPs - expenses and equity dilution?

Business and footfall disrupted in airport stores because of jet airways grounding
Company has high investments in liquid funds


Quite bad set of numbers. Another brand biting the dust?

Disc. 2.5% of the PF invested during listing and IPO

Revenue are flattish, not bad looking at other brands in discretionary/lifestyle spend. OP efficiency has taken a hit - no visible signs of it leading to poor margins. Guess that’s what will separate winners.

Future commentary will be key to watch out.

Disc- holding @ 2% PF from lower levels.

I don’t think so that the numbers are bad. Margins are gud they maintained at 20%. It’s only depreciation which dented pat and I don’t why they hav paid taxes @49%. Even after the tax cut. Is tax cut not for these retailers? View invited…

Key Highlights of this quarter
 Slowdown affects SSSG and revenue growth.Revenue remain flat YoY to Rs 3,209mn affected by nearly flat SSSG at 0.1%. Revenue from W brand de-grew first time by 6% while growth of Aurelia and Wishful moderated to 10% YoY and 15% YoY respectively. Revenue from EBO and LFS channel
grew at 6% YoY and 4% YoY while MBO channel recorded 40% decline due to liquidity stress faced by channel partners. Revenue from online platform grew at 1% YoY due to one off logistics related issue (no-capacity to store the products) at retailer’s end.

 To launch 4rth brand and penetrate into new categories. TCNS would be soon launching a fourth brand (a.k.a co-ordinate brand; name is yet to be announced) under bottom wear and drape wear category. Further, TCNS is venturing into (i) footwear and accessories categories under the brand W and (ii) ethnic wear for girls under the brand Aurelia.


Current scenario with TCNS


  1. FY 19 growth - considerable slowdown in sales prior to corona issue

  2. Margins maintaining at 20% prior to corona issue

  3. Borrowing of 375Cr(per screener - sept 19) - 10 cr interest outflow each Qtr

4.NO buying from promoter(low holding at 32%) or MFs in recent carnage - no Major selling/buy from MFs Jan/Feb/Mar

  1. Stores closed - for major part of Q120 ( dont see major rush to them post lockdown open either - probably some pickup in Diwali/wedding season - Q3 to normalize)

  2. Fixed cost at approx 38% (employee and others) - approx 100 Cr/qtr + Interest outflow(10 cr/qtr)

  3. Cash at 17 Cr + investments of 144Cr - can sustain for 1.5-2 Qtr at max - Imp to see mgmt commentary on steps/direction

8.Likely all new launches/mktg activities announced in last Q will take a backseat

Summary: April - Sep results likely to be bad and lot depend on virus situations/discretionary spends, some normalization possibility in Q3 - for a biz growing at 10-15% in sales, very good brands, reasonable valuations, bit stressed balance sheets.

Trimmed holdings in current bouneback and Have tracking positions - awaiting on sidelines to understand how situations evolve


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Dear fellow Investors,

Management has borrowed 375crs recently, what are plans with this borrowing ? Scaling up production or expanding stores ?

I do not think they have any debt right now.

I think they paid off the 375 crores. Not sure though!

This part says leasing liabilities… Maybe they are into expansion ?

I do not understand this lease liabilities part. Every credit rating and research report I have read about TCNS says that they are debt free (latest report June 21 2020). However some posts here say that they have debt of 375 crores. Is this because of some accounting change?

Ind AS requires capitalisation of lease liabilities on the balance sheet - this is likely the change you’re seeing

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Was this change made recently because it only appears on this year’s balance sheet?

Ind AS implementation was last year if I’m not wrong

thank you for the answer. Do you have any idea if that leads to extra depreciation charges. Because in the case of TCNS, their depreciation shot up to 100 crores in FY20 even though it was negligible in the years before this has led to net profit being extremely low