Q1 2027 Rupa & Co Ltd Earnings Call

August 11, 2026

Speaker #1: Ladies and gentlemen, the conference call will begin shortly. Please stay connected. Ladies and gentlemen, good day, and welcome to Rupa & Company Limited Q1 FY27 earnings conference call, hosted by MUSG In Time.

Operator: Ladies and gentlemen, the conference call will begin shortly. Please stay connected. Ladies and gentlemen, good day, and welcome to Rupa & Company Limited Q1 FY27 Earnings Conference Call hosted by MUFG Intime. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Pradnya Singh from MUFG Intime. Thank you, and over to you, ma'am.

Speaker #1: As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during this conference call, please signal an operator by pressing star, then zero, on your Touch-Tone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Ms. Pradnya Singh from MUSG InTime. Thank you, and over to you, ma'am.

Speaker #2: Thank you. Good afternoon, everyone. I welcome you all to the earnings conference call to discuss the Q1 FY27 results of Rupa & Company Limited. To discuss our results, we have with us members from the management team.

Pradnya Singh: Thank you. Good afternoon, everyone. I welcome you all to the earnings conference call to discuss Q1 FY27 results of Rupa & Company Limited. To discuss our results, we have with us from the management Mr. Vikash Agarwal, the Whole-Time Director, and Mr. Sumit Khowala, the Chief Financial Officer. They will take you through the results, and then we will proceed to Q&A session. Before we proceed to the call, a small disclaimer. This conference may contain certain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations as on date of this call. The actual results may differ materially. These statements are not guarantee of future performance and involve risks and uncertainties that are difficult to predict. The detailed safe harbor statement is also given on page 2 of the company's investor presentation.

Speaker #2: Mr. Vikas Agarwal, the Whole-Time Director, and Mr. Sumit Kovala, the Chief Financial Officer, will take you through the results. After that, we will proceed to the Q&A session.

Speaker #2: Before we proceed to the call, a small disclaimer: This conference may contain certain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations as of the date of this call.

Speaker #2: The actual results may differ materially. These statements are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict.

Speaker #2: The detailed Safe Harbor statement is also provided on page two of the company's investor presentation. Now, I would like to hand the call over to Mr. Vikas Agarwal.

Pradnya Singh: Now, I would like to hand the call over to Mr. Vikash Agarwal. Thank you, and over to you, sir.

Speaker #2: Thank you, and over to you, Sir.

Speaker #3: Thank you. Good afternoon, ladies and gentlemen. On behalf of Rupa & Company Limited, I extend a very warm welcome to all the participants joining us today for the Q1 FY27 results conference call.

Vikash Agarwal: Thank you. Good afternoon, ladies and gentlemen. On behalf of Rupa & Company Limited, I extend a very warm welcome to all the participants joining us today for Q1 FY27 results conference call. We appreciate your continued engagement with the company. The financial results and investor presentation has been uploaded on the stock exchanges for your review. Before I begin, I would like to take a moment to express our deepest condolences on the unfortunate demise of Mr. Ashok Bhandari, Non-Executive Independent Director of the company, who passed away on 3 August 2026. Mr. Bhandari has been associated with the company since August 2018 and served as Chairman of the Audit Committee and the Nomination of Remuneration Committee. He was a veteran finance professional and was widely respected for his knowledge, wisdom, and integrity.

Speaker #3: We appreciate your continued engagement with the company. The financial results and investor presentation have been uploaded on the stock exchanges for your review. Before I begin, I would like to take a moment to express our deepest condolences on the unfortunate demise of Mr. Ashok Bhandari, Non-Executive Independent Director of the company, who passed away on August 3, 2026.

Speaker #3: Mr. Bhandari has been associated with the company since August 2018 and has served as Chairman of the Audit Committee and as a nominee of the Remuneration Committee.

Speaker #3: He was a veteran finance professional and was widely respected for his knowledge, wisdom, and integrity. His passing is a great loss to the Rupa family.

Vikash Agarwal: His passing is a great loss to Rupa family, and we extend our heartfelt condolences to the family and loved ones. May his soul rest in eternal peace. Coming to the business, we started financial year 2027 on a positive note, with revenue growing by 10%, witnessing steady momentum across the portfolio. Healthy volume traction remained a key driver of growth during the quarter. While the value segment was a key contributor to the growth during the quarter, based on our historical revenue trend, we believe the momentum to broaden across other segments as we progress through the year, translating into a broader and more balanced growth profile. Exports contributed 4% to overall revenue during the quarter, while modern trade, including e-commerce, contributed 5% to the revenues. Both these channels continue to gain traction and provide meaningful opportunities to further scale our market presence and expand our reach.

Speaker #3: And we extend our heartfelt condolences to the family and loved ones. May his soul rest in eternal peace. Coming to the business, we started FY27 on a positive note.

Speaker #3: With revenue growing by 10%, we are witnessing steady momentum across the portfolio. Healthy volume traction remained a key driver of growth during the quarter. While the value segment was a key contributor to the growth during the quarter, based on our historical revenue trend, we believe the momentum will broaden across other segments as we progress through the year.

Speaker #3: Translating into a broader and more balanced growth profile. Exports contributed 4% to overall revenue during the quarter, while modern trade, including e-commerce, contributed 5% to the revenues.

Speaker #3: Both these trends continue to gain traction and provide meaningful opportunities to further scale our market presence and expand our reach. EBITDA is ₹215.7 crore, with EBITDA margin of 7.8%, supported by stable operating performance.

Vikash Agarwal: EBITDA stood at INR 50.7 crore, with EBITDA margin of 7.8%, supported by stable operating performance. The company maintained a net cash surplus of INR 7 crore as of June 2026, reflecting its continued focus on liquidity discipline and financial flexibility. On the raw material side, yarn prices are currently on an upward trajectory, creating a favorable pricing environment for the company. While competitive intensity remains elevated, we continue to adopt a calibrated pricing approach with the objective of progressively translating the favorable pricing environment into improved realizations and margins. With healthy volume momentum, expanding channels, disciplined cost management, and an improving pricing environment, we remain optimistic about the outlook with revenue expected to grow by 10% to 12% in the coming quarter and EBITDA margin expected to remain in the range of 9% to 10%.

Speaker #3: The company maintained a net cash surplus of ₹7 crore as of June 2026, reflecting its continued focus on liquidity discipline and financial flexibility. On the raw material side, yarn prices are currently on an upward trajectory, creating a favorable pricing environment for the company.

Speaker #3: While competitors' intensity remains elevated, we continue to adopt a calibrated pricing approach, with the objective of progressively translating the favorable pricing environment into improved realizations and margins.

Speaker #3: With healthy volume momentum expanding channels to disciplined cost management and an improving pricing environment, we remain optimistic about the outlook, which with revenue expected to grow by 10 to 12% in the coming quarter and EBITDA margin expected to remain in the range of 9 to 10%.

Speaker #3: With this, I would like to hand over to our CFO, Mr. Sumit Kovala, to take us through the financial highlights of the company. Thank you.

Vikash Agarwal: With this, I would like to hand over to our CFO, Mr. Sumit Khowala, to take through the financial highlights of the company. Thank you.

Speaker #4: Thank you, sir, and good afternoon to everyone. Thank you for joining us on the Q1 FY27 earnings call. I will now take you through the key financial highlights of the quarter.

Sumit Khowala: Thank you, sir, and good afternoon to everyone. Thank you for joining us on Q1 FY27 earnings call. I will now take you through the key financial highlights of the quarter period. For Q1 FY27, revenue from operations stood at ₹202.4 crores as compared to ₹183.9 crores in Q1 FY26, registering a growth of 10.1% year-on-year basis. Rough margin remained stable during the quarter, stood at 37.4% versus 37.7% corresponding quarter last year. EBITDA for the quarter stood at ₹15.7 crores as compared to ₹12.2 crores in the same period last year, registering a growth of 29.1% year-on-year basis. EBITDA margin for the quarter stood at 7.8%, improved by 120 basis points year-on-year. Net profit after tax for the quarter stood at ₹8.3 crore as against ₹5.5 crore in Q1 FY26, registering a growth of 50.2% year-on-year basis.

Speaker #4: For Q1 FY27, revenue from operations stood at ₹202.4 crore as compared to ₹183.9 crore in Q1 FY26, registering a growth of 10.1% on a year-on-year basis.

Speaker #4: Gross margin remained stable during the quarter, stood at 37.4% versus 37.7% corresponding quarter last. EBITDA for the quarter stood at 15.7 crore as compared to 12.2 crore in the same period last year, registering a growth of 29.1% year-on-year basis.

Speaker #4: EBITDA margin for the quarter stood at 7.8%, improved by 120 basis points year-on-year. Net profit after tax for the quarter stood at ₹8.3 crore as against ₹5.5 crore in Q1 FY26, registering a growth of 50.2% on a year-on-year basis.

Speaker #4: PAT margin for the quarter stood at 4.1%, improving by 110 basis points on a year-on-year basis. As of June 30, 2026, the company has maintained a net cash surplus position of INR 7 crore, reflecting our continued focus on liquidity discipline and financial flexibility.

Sumit Khowala: PAT margin for the quarter stood at 4.1%, improving by 110 basis points year-on-year basis. As on 30 June 2026, company has maintained a net cash surplus position of INR 7 crore, reflecting our continued focus on liquidity discipline and financial flexibility. We remain committed towards improving profitability through better product mix, efficient general management, focused investment in high growth categories, and disciplined cost optimization initiatives. With this, I conclude my remarks and open the floor for the question and answer session. Thank you.

Speaker #4: We remain committed to improving profitability through a better product mix, efficient channel management, focused investment in high-growth categories, and disciplined cost optimization initiatives. With this, I conclude my remarks and open the floor for the question-and-answer session.

Speaker #4: Thank you.

Speaker #1: Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator: Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question from the line of Pahal Sharma from DD Capital. Please go ahead.

Speaker #1: If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question.

Speaker #1: Ladies and gentlemen, we'll wait for a moment while the question queue assembles. We have the first question from the line of Pahal Sharma from DD Capital.

Speaker #1: Please go ahead.

Speaker #5: Hello, sir. Thanks for the opportunity. So my question is that during the last quarter, you had guidance for 10 to 12% revenue growth, and also 9 to 10% of EBITDA margin.

Pahal Sharma: Hello, sir. Thanks for the opportunity. My question is that during the last quarter, you had guided for 10% to 12% revenue growth and also 9% to 10% of EBITDA margin. My question is that what are the key reasons for the shortfall in EBITDA margins versus your guidance?

Speaker #5: So, my question is: what are the key reasons for the shortfall in EBITDA margins versus your guidance?

Sumit Khowala: During Q1, the advertisement and marketing spend comes to around 10.5% of the total revenue. Going forward, the same will be rationalized to 6% to 7%. This would help in achieving the desired level of EBITDA.

Speaker #4: During Q1, our advertisement and marketing spend comes to around 10.5% of total revenue. And, going forward, the same would be rationalized to 6.7%, 6 to 7%.

Speaker #4: So this would help in achieving the desired level of EBITDA.

Speaker #5: Okay, sir. Thank you. That's all from my side.

Pahal Sharma: Okay, sir. Thank you. That is all from my side.

Speaker #1: Thank you. The next question comes from the line of Suhani Singh from Ross Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Suhani Singh from Ross Capital. Please go ahead.

Suhani Singh: Hi. Good afternoon, sir. I just have one question. You had taken a price hike in April. However, the impact of this price hike does not appear to be reflected in the realization. If you could explain the reason for this and when do you expect the full impact of the price hike to be reflected?

Speaker #5: Hi, good afternoon, sir. I just had one question. You had taken a price hike in April; however, the impact of this price hike does not appear to be reflected in the realizations.

Speaker #5: So, if you could explain the reason for this, and when do you expect the full impact of the price hike to be reflected?

Speaker #3: I mean, that's true. You have taken a price hike, but later, because of intense competition, your competitors have made an extra push in the market.

Sumit Khowala: That is true. We have taken a price hike, but later because of intense competition, where competition is buys and extra schemes in the market. By compulsion, almost all the brand categories are the same. We are hopeful by in August we will be implementing the new rate now.

Speaker #3: So, by compulsion, almost all the brands have to do the same. But we are hopeful that by August, we'll be implementing the new rate now.

Suhani Singh: Okay.

Speaker #3: The rate is yet to be implemented. That was implemented, but again passed on with some extra sprint.

Sumit Khowala: The rate is yet to be implemented. That was implemented, but again, passed on with some extra scheme and all.

Speaker #5: Okay, sir. That helps. Thank you.

Suhani Singh: Okay, sir. That helps. Thank you.

Speaker #1: Thank you. The next question comes from the line of Yash Mehta from SKP Capital. Please go ahead. Mr. Mehta, can you hear me? Please unmute your mic and proceed with your question.

Operator: Thank you. The next question comes from the line of Yash Mehta from SKP Capital. Please go ahead. Mr. Mehta, can you hear me? Please unmute your mic and

Yash Mehta: Hello.

Operator: proceed with your question.

Yash Mehta: Am I audible?

Speaker #1: Yes, please go ahead.

Operator: Yes. Please go ahead.

Speaker #4: Yeah. Sir, hello, sir. I've just got one question. So, how is the order book for the thermal segment shaping up for FY27? And, like, what is the current visibility for the segment in terms of order inflows and growth?

Yash Mehta: Yeah. So hello, sir. I've just got one question. So how is the order book for the thermal segment shaping up for FY27? And what is the current visibility for the segment in terms of order inflows and growth?

Speaker #3: For thermals, we have a sound and healthy order book, and we expect that this year, the thermal will contribute better compared to last year.

Sumit Khowala: For thermal, we have a sound and healthy order book, and we expect that this year thermal will contribute better compared to last year. So the expectations are high and probably lastly, it largely depends on how winter gets through this year. So we are hopeful that things will be better from last year.

Speaker #3: So the expectations are high, and probably last year they largely depended on how winter went through this year. So we are hopeful that things will be better than last year.

Yash Mehta: Sure.

Speaker #4: So, order commitment and all is good, but unless the winter starts, it's really difficult to assure anything about commitment. But so far, the impression is good, and numbers should be better than last year.

Sumit Khowala: Order commitment and all is good, but unless this winter starts, it's really difficult to assure anything about commitments. But so far the impression is good, and numbers will be better from last year.

Speaker #1: Understood, sir. Understood. Thank you. Thank you. The next question comes from the line of Seya Singh from SMSD Securities. Please go ahead.

Yash Mehta: Understood, sir. Thank you.

Operator: Thank you. The next question comes from the line of Seyaa Singh from SMSD Securities. Please go ahead.

Speaker #5: Hello. Am I audible?

Seyaa Singh: Hello, am I audible?

Speaker #1: Yes, please go ahead.

Operator: Yes, please go ahead.

Speaker #5: Yeah. Sir, I want you to I just had one of your question. Like, the answer is that currently on an uptrend. So are you considering any further price hikes to offset the increase in YAN cost?

Seyaa Singh: Yeah. Sir, I just have one or two questions. Yarn prices are currently on an uptrend, so are you considering any further price hikes to offset the increase in yarn cost?

Speaker #3: Yeah, it's true. The yarn price is on a high, and August will be implementing the last rate. And yes, we have to take a further rate hike.

Vikash Agarwal: Yes, it is true that real prices are high and August will be implementing the large rate and yes, we have to take a further rate hike. But again, a lot will depend upon the competitive scenario, how other competitors behave.

Speaker #3: But again, a lot will depend upon the competitive scenario—how the competitive

Speaker #5: So that will be your, basically, the strategy to manage the impact, right?

Seyaa Singh: So that will be basically the strategy to manage the impact, right?

Speaker #3: Yeah.

Vikash Agarwal: Yes.

Seyaa Singh: Of the price. Yes, sir. Got it. Thank you.

Speaker #5: Okay, sir. Got it. Thank you.

Speaker #1: Thank you. The next question comes from the line of Shubhankar Gupta from Equitree Capital. Please go ahead.

Operator: Thank you. The next question comes from the line of Shubhankar Gupta from Equity Capital. Please go ahead.

Speaker #2: Yeah, hi. Am I audible?

Shubhankar Gupta: Yeah. Hi. Am I audible?

Speaker #3: Yes.

Vikash Agarwal: Yes.

Speaker #2: Yes. So, sir, I had two or three kinds of questions. The first is around the brands that are up in cost, which you mentioned—21% growth, 10.5% of Q1 FY25 top line.

Shubhankar Gupta: Yes. I had two, three questions. First is around the brand development cost, which you mentioned that INR 21 crores, 10.5% of Q1 FY25 top line. Can you just elaborate a little bit more on where this INR 21 crores was spent?

Speaker #2: So, can you just elaborate a little bit more on where this 21% growth was spent?

Speaker #3: Yeah, it's basically 35 to 40 percent on the APL, and the rest is on the BPL.

Vikash Agarwal: Yes. Basically 35% to 40% on the ATL and the rest is on the BTL.

Speaker #2: Okay. And on the document of BTC,

Shubhankar Gupta: Okay.

Vikash Agarwal: On the endorsement of the BTL also, a bit of that has gone into that also.

Speaker #3: Also, a bit of that has gone into that as well.

Speaker #2: Endorsement phase. Okay.

Shubhankar Gupta: Endorsement fee. Okay. Got it. And then often the Ppk reflects that the current brand ambassadors for Rupa Frontline, Rupa Jon, Softline, and Macroman are Ranveer Singh, Ranbir Kapoor, Fatima Kaif, and Yash.

Speaker #3: Yeah.

Speaker #2: And then often the people, they reflect that, you know, the current brand ambassadors for Rupa are Frontline, Rupa Jon, Softline, and Macroman. Ranveer Singh, Ranbir Kapoor, Vikram Kabi, and Yash.

Vikash Agarwal: Yes.

Speaker #2: Is that correct?

Shubhankar Gupta: Is that correct?

Speaker #3: Yeah, absolutely.

Vikash Agarwal: Yeah.

Speaker #2: So the 21% growth which you spent, and on average 5 to 6 percent of the overall top line per year, what portion of that would go to the brand endorsement fee for these stars?

Shubhankar Gupta: The 21 crore which you spend on average 5% to 6% of the overall top line per year, what portion of that would go to the brand endorsement fee for these stars?

Speaker #3: 10 to 12 percent. 10 to 12 percent.

Vikash Agarwal: 10% to 12%.

Speaker #2: Okay, okay. Got it. And so, second, I had a few questions on the strategic initiatives, which you mentioned over the last few quarters.

Shubhankar Gupta: Okay. Got it. Second, I had a few questions on the strategic initiatives which you mentioned over the last few quarters. I can see that modern trade is currently at 5% of overall sales. Right? I just want to understand, so it is effectively INR 10 crores for this quarter. Right? Just want to understand what are the key initiatives we are taking there and by how much, let us say by FY27, at what absolute number do we see modern trade going? Roughly. A rough number would be helpful here.

Speaker #2: So, I can see that modern trade is currently at 5% of overall sales, right? Just want to understand, like, you know, so it’s effectively 10% growth for this quarter, right?

Speaker #2: Just want to understand, like, what are the key initiatives we are taking there, and by how much—let's say by FY27—at what absolute number do we see modern trade going?

Speaker #2: Roughly, like a rough number would be helpful here.

Speaker #3: All trade which we use has potential. So we have been able to appoint senior heads for the e-commerce business, and we are building the right infrastructure for that.

Vikash Agarwal: Modern trade we see huge potential. We have been able to appoint a senior head for the e-commerce business and we are building the right infrastructure for that. So whether it is your warehouse, your inventory management, your dispatches and all. So your IT. Everything is getting in place and we are quite hopeful. We are looking at more than double-digit growth in e-commerce.

Speaker #3: So either it is your warehouse, your inventory management, your dispatches and all. So your IT, so everything is getting in place and we are quite hopeful and we are looking at double digit more than double digit growth in e-commerce.

Speaker #2: Okay.

Shubhankar Gupta: Okay.

Vikash Agarwal: At least 20%.

Speaker #3: 3%.

Speaker #2: Sorry, how much?

Shubhankar Gupta: Sorry, how much?

Vikash Agarwal: At least a growth of 20%-25%.

Speaker #3: At least a growth of 20 to 25 percent.

Speaker #2: Okay, got it. You're saying that from...

Shubhankar Gupta: Okay. Got it. Are we seeing that from-

Speaker #3: For a significant growth in LFS, probably in a quarter absolutely on track, we look forward to a handsome growth there.

Vikash Agarwal: Significant growth in LFS. Probably in a quarter or two, once things are absolutely on track, we look forward to a handsome growth there.

Speaker #2: Got it, sir. And sir, in terms of other women segment, like women segment currently I think it was around 8% in Q1 and has been in that range only for, you know, on an overall annual basis, 8 to 10 percent.

Shubhankar Gupta: Got it, sir. In terms of other women segment, like women segment currently I think it was around 8% in Q1 and has been in that range only on an overall annual basis, 8% to 10%. How do we see that going and what are the key initiatives we are taking on that front?

Speaker #2: So, how do we see that going, and what are the key initiatives we are taking on that front?

Speaker #3: So one major point is that the main brand in our women's segment is Softline. Here, we have made a big change—we have changed the font of the brand.

Vikash Agarwal: One major is the main brand in our women's segment is Softline. There we have gone a big change. We have changed the font of the brand, it is going under a major change and we are again building up a very relevant portfolio in terms of product range with a lot of new fabrics and all and building up a strong team for that. We are quite hopeful that things should fall on track. We understand women's for us has not done so well, what should have been. But the way things are happening, we are hopeful things should be better from here in coming quarters.

Speaker #3: It's going under a major change, and we are again building up a very relevant portfolio in terms of product range, with a lot of new fabrics and all, and building up a strong team for that.

Speaker #3: So, we are quite hopeful that things should get back on track. We understand women's products have not done as well as they should have. But based on the way things are progressing, we are hopeful things should be better from here in the coming quarters.

Speaker #2: Got it, sir. So, you mentioned that you're building up a strong team. Can you elaborate a bit on that front?

Shubhankar Gupta: Got it, sir. You mentioned that you are building up a strong team. Can you elaborate a bit on that front?

Speaker #3: In terms of now for Rupa, again, we have LSM with a strong set of ZSMs already in place. And under the ZSMs, we are building up a strong team for each brand.

Vikash Agarwal: In terms of, now for Rupa again we are having SM with a strong set of ZSMs which are already in place. Under ZSMs we are building up a strong team for each brand for retailing and all. The team is in place and probably in coming quarters their working should be in play then we can see a better performance.

Speaker #3: For retailing and all, the team is in place, and probably in the coming quarters, as they are working, things should be in place and we can see a better performance.

Speaker #2: Okay, okay. And sir, just my last question is on the athleisure front. So I thought, do you see any, you know, numbers mentioned for the athleisure bit?

Shubhankar Gupta: Okay. My last question is on the Athleisure front. I could not see any numbers mentioned for the Athleisure bit. Can you just help us a bit on how the Athleisure front is progressing for Rupa?

Speaker #2: So, can you just help us a bit on how the athleisure front is progressing for Rupa?

Speaker #3: At leisure is doing quite well. In quarter four, we have done quite a good number. Quarter one was a little soft because quarter four was quite good for us.

Vikash Agarwal: Athleisure is doing quite well. In Q4 we have done quite good numbers. Q1 was little soft because Q4 was quite good for us. From Q2 onwards, again we are looking for at least a double-digit growth in this situation.

Speaker #3: And from Q2 onwards, again, we are looking for at least double-digit growth in that situation.

Speaker #2: So, on a YoY or YoY basis, like how did it look? Q4 is fine. I mean, they're not compared to Q4. But on a YoY or YoY basis, like what were the numbers for last year versus this year?

Shubhankar Gupta: On a year-over-year basis, how does it look? Q4 is fine, I mean may not compare it to Q4 but on a year-over-year basis what were the numbers for last year versus this year? If you can answer that.

Speaker #2: If you can help with that.

Speaker #3: For quarter one?

Vikash Agarwal: For Q1?

Speaker #2: Yes.

Shubhankar Gupta: Yes.

Speaker #3: It was 5 to 7 percent being good compared to quarter one last year, this year.

Vikash Agarwal: It was 5% to 10% compared to Q1 last year.

Speaker #2: 5 to 7 percent growth. Okay. And sir, for the whole year, how much are you expecting for athleisure to take up?

Shubhankar Gupta: 5% to 7% growth. Okay. For the whole year, how much are you expecting for Athleisure to take up?

Speaker #3: More than double-digit growth, on a yearly or annual basis.

Vikash Agarwal: More than double-digit growth for a yearly basis.

Speaker #2: On an annual basis for it. Got it. And sir, this overall 10% growth was led by the volume growth, right? Price inflection did not come into the picture because of competitive intensity, as mentioned.

Shubhankar Gupta: On an annual basis. Got it. This overall 10% growth was led by the volume growth, right? Price inflation did not come into picture because of competitive intensity as mentioned.

Speaker #3: Yes. Yeah.

Vikash Agarwal: Yeah.

Speaker #2: All right. Got it. Thank you.

Shubhankar Gupta: All right. Got it. Thank you.

Speaker #1: Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. I repeat, if you wish to ask a question, you may press star and one.

Operator: Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. I repeat, if you wish to ask a question, you may press star and one. The next question comes from the line of Rusmik. The next question comes from the line of Prerna from Elara Securities. Please go ahead.

Speaker #1: The next question comes from the line of Rushmick. The following question comes from the line of Prerana from Elara Securities. Please go ahead.

Speaker #4: Thank you for the opportunity. I had a few questions. I joined in late, so maybe this could be a repetition. Did you take any price hike in this quarter?

[Analyst] (Elara Securities): Thank you for the opportunity. I have few questions. I joined in late, maybe this could be a repetition. Did you take any price hike in this quarter? What would be the brand-wise increase in price, if that could help us?

Speaker #4: And then, what would be the brand-wise increase in price, if you could help us?

Speaker #3: Yeah, we took a price hike of 4 to 5 percent in quarter one. But that was gradually, again, transferred to trade because of intensive competition in terms of extra schemes and all.

Vikash Agarwal: We took a price hike of 4% to 5% in Q1, but that was gradually again transferred to trade because of intensive competition in terms of extra scheme and all. Probably in August hike, the new rate will be implemented now in August. We look for a further price hike of 4% to 5%, but a lot will depend upon the competition.

Speaker #3: So, probably the new rate will be implemented now in August. And we are looking for a further price hike of 4 to 5 percent, but a lot will depend upon the competition.

Speaker #4: Could you please elaborate on the competitive intensity? What is leading to this high competitive intensity? And why are price hikes difficult? Because the entire industry would be going through cost inflation.

[Analyst] (Elara Securities): Could you please elaborate on the competitive intensity? What is leading to this high competitive intensity and why price hikes are difficult? Because the entire industry would be going through cost inflation. How is the industry managing with such low margin?

Speaker #4: So, how is the industry managing such low margins?

Speaker #3: Few players are probably using this—giving extra discounts and all—just to gain market share and all. So, this is how the industry is surviving now, or this is how you need to be there to be in the market.

Vikash Agarwal: Few players are probably giving extras and discounts and all just to gain market share and all. This is how the industry is surviving now or this is how you need to be there to be in market. I am sure industry will understand that in incoming quarters we will have a better environment in terms of pricing and implementation.

Speaker #3: But I am sure the industry will understand that, and in the coming quarters we'll have a better environment in terms of pricing and implementation.

Speaker #4: Okay.

[Analyst] (Elara Securities): Okay.

Speaker #3: A lot of people, all the brands, have old stock also. So that is also a reason. But we see the old stock is exhausted now.

Vikash Agarwal: A lot of all the brands have old stock also. That is also a reason. We see the old stock is exhausted now, and we have fresh stock with higher pricing. From August onward, we are quite hopeful the new rates will be implemented.

Speaker #3: And we have fresh stock with higher pricing. So, from August onward, we are quite hopeful that we will wait till next year.

Speaker #4: Oh, that's interesting that many players have actually exhausted the older inventories of lower price, so they would not have. Okay, understood. And sir, for margin expansion, what efforts are we taking and where do we see margin sustaining over the next two to three years?

[Analyst] (Elara Securities): Oh, that is interesting that many players have actually exhausted the older inventories of lower price, so they would not have.

Vikash Agarwal: Yes.

[Analyst] (Elara Securities): Okay, understood. Sir, for margin expansion, what efforts are we taking and where do we see margin sustaining over the next two to three years? I am not talking about quarters, but what would be your target for margins in the business and what will be the growth drivers for the same?

Speaker #4: I'm not talking about quarters, but what would be your target for margins in the business, and what would be the growth drivers for the same?

Speaker #3: Yeah, focusing a lot on areas other than the innerwear area, focusing on the athleisure women's segment. We are focusing a lot on e-commerce, modern trade, and LFS.

Vikash Agarwal: We are focusing a lot on other than the innerwear, we are focusing on Athleisure women's segment. We are focusing a lot on e-commerce, modern trade, LFS. So there probably margin realization is better and the competition is less there.

Speaker #3: So, their margin realization is probably better, and the competition is less there.

Speaker #4: Okay, so these channels are new for us, and hence the margins are better? Or are they generally better than your traditional channels?

[Analyst] (Elara Securities): Okay. These channels are new for us and hence the margins are better, or they are generally better than your traditional channels?

Speaker #3: It's generally better, but our market share is quite low there, and the market is growing quite well. Our base is also quite low, so we see handsome growth there.

Vikash Agarwal: It is generally better, but our market share is quite less there and the market is quite growing there. Our base is quite low, so we see a handsome growth there.

Speaker #4: Okay. And the last question is on women's wear. Macro women, macro women soft line—all these segments have been within your kitty for a long time.

[Analyst] (Elara Securities): Okay. Last question is on womenswear. Macroman women, Softline, these all segments have been in your kitty for a long time. Do we see a focus on women increasing and the revenue share of women moving beyond 10% to 15% in your revenue share in the next 2 to 3 years?

Speaker #4: Do we see focus on women increasing, and the market—the revenue share of women—moving beyond 10-15% in your revenue share in the next two to three years?

Speaker #3: Ideally, we would want that, and we've been trying. But that's a tough, difficult market. So, we are hopeful things will improve, and we are doing our best.

Vikash Agarwal: Ideally, we would want that and we have been trying, but that is a tough, difficult market. We are hopeful things should improve, and we are doing our best. In the coming quarters-

Speaker #3: So in coming quarters.

[Analyst] (Elara Securities): What are the key efforts?

Speaker #4: What are the key efforts?

Speaker #3: Key efforts we believe include building up a strong team just to focus on women, and more on a secondary base.

Vikash Agarwal: Key efforts is building up a strong team just to focus on women and more on secondary base.

Speaker #4: Understood. And sir, are there any efforts on inventory management or better visibility on working capital reduction that should be helpful? This is my last question.

[Analyst] (Elara Securities): Understood. And sir, any efforts on inventory management, better visibility of working capital reduction that should be helpful? This is my last question.

Speaker #3: That we are doing. We are undertaking a lot of initiatives in IT where we have better control of the inventory and better visibility of stock-related matters.

Vikash Agarwal: We are doing a lot of initiatives in IT where we have better control on the inventory and we have a better visibility of stocks where it is stuck. A better implementation of SAP and all will help us. A better implementation of AI also, we are taking few initiatives and all, so those will help us to control.

Speaker #3: So yes, a better implementation of SAT and all will help us with a better implementation of AI also. We are taking a few initiatives and all.

Speaker #3: So those will help us too.

Speaker #4: So, some of the competitors are looking at setting up some efforts like ARS and all. Are you also looking from that perspective?

[Analyst] (Elara Securities): And some of the competitors are looking at setting up some efforts like ARS and all. Are you also looking from that perspective?

Speaker #3: Yeah. Yes, ma'am.

Speaker #4: Okay. You're also building up ARS in the system.

Vikash Agarwal: Yes.

[Analyst] (Elara Securities): Okay, you are also building up ARS in the system.

Speaker #3: That's in place, but we need to have a proper DMS first. So, we'll start with a few straight, with the proper implementation of DMS. Although we have started implementing DMS, that's a long journey.

Vikash Agarwal: That is in place, but we need to have a proper DMS first. We will start with few states with a proper implementation of DMS. Although we have started implementing DMS, that is a long journey. We will start the initiative with a particular state and take one state each time. In coming year or two, we should have a handsome presence of that in the market.

Speaker #3: So we'll start the initiative with a particular state and take one state each time. So in the coming year or two, we should have a handsome presence of that in the market.

Speaker #4: Sure, sir. Thank you. And.

[Analyst] (Elara Securities): Sure, sir. Thank you.

Speaker #3: To next year.

Vikash Agarwal: Thanks. Yeah.

Speaker #4: Thank you so much, sir, for the detailed answers. Thank you.

[Analyst] (Elara Securities): Thank you so much, sir, for the detailed answers. Thank you, sir.

Speaker #3: Yeah, thank you.

Vikash Agarwal: Thank you.

Speaker #1: Thank you. The next question comes from the line of Roshnik Oza from 9 Days Equay Research. Please go ahead.

Operator: Thank you. The next question comes from the line of Rusmik Oza from 9rays Equi Research. Please go ahead.

Speaker #5: Thanks for the opportunity. My question is a bit broader. I was observing a number, sir. So between 2015 to 2022, the revenue growth used to be 7%.

Rusmik Oza: Thanks for the opportunity. My question was little on the broader thing. I was observing your numbers, sir. Between 2015 to 2022, your revenue growth used to be 7%, but that time, the EBITDA margins used to be around 14%, net margin used to be 7%. Because of this profile, your ROC used to be around 25% and ROE used to be high mid-teen. Now the growth this time, maybe in the last two, three years, and now it is still growing at a healthy pace, maybe 10%. But structurally, the operating margins are now steady at around 10% and net margin at 5%, 6%, which is leading to a suppressed ROC of around 10% and ROE of single digits. My question was that, is this structural and this will remain like this for the coming couple of years?

Speaker #5: At that time, the EBITDA margin used to be around 14 percent, and the net margin used to be about 7 percent. Because of this profile, your ROC used to be around 25 percent, and ROE used to be in the high mid-teens.

Speaker #5: Now, the growth this time, maybe in the last two to three years and now, it's still growing at a healthy pace—maybe 10%.

Speaker #5: But structurally, the operating margins are now steady at around 10 percent and net margin at 5–6 percent, which is leading to a suppressed ROC of around 10 percent and ROE in single digits.

Speaker #5: So, my question was: is this structural, and will it remain like this for the coming couple of years, or is there scope for improvement in (A) the margins and (B) the return ratios year-on-year?

Rusmik Oza: Or is there any scope for improvement in, A, the margins and, B, the return ratios from here on?

Speaker #3: Of course, ROC and ROE—whatever you mentioned—is not desirable. But yes, the industry is going through a very tough time in terms of competitive scenario and all.

Vikash Agarwal: Of course, ROE and ROC, whatever you mentioned is not desirable. But, yes, the industry is going through a very tough time in terms of competitive scenario. But we are taking lot of initiatives in terms of moving completely from wholesale driven market to secondary driven market and all, and focusing on lot of LFS, e-commerce and other channels. So all these initiatives, we are hoping in coming years, of course, ROC and ROE has to be a better return and better numbers, yes.

Speaker #3: But we are taking a lot of initiatives in terms of moving completely from wholesale to the market, to secondary to the market and all, and focusing on a lot of LFS, e-commerce, and other channels.

Speaker #3: So, with all these initiatives, we are hopeful that in the coming years, of course, ROC and ROE will show better returns and stronger numbers here.

Rusmik Oza: Okay.

Vikash Agarwal: But of course, it's difficult for any industry to sustain and all. And this can't continue for long.

Speaker #3: Of course, it's difficult for any industry to sustain and all. So, and we can't continue for long, for sure.

Speaker #5: Okay, okay. Sir, just a clarification: when you say competitive intensity, is it from the organized players similar to your company, or is it coming from the unorganized sector?

Rusmik Oza: Okay. Sir, just a clarification. When you say competitive intensity, is it from the organized players similar to your company, or is it coming from the unorganized sector?

Speaker #3: Answer is basically more from the organized sector. We are taking market share, but just by giving higher discounts and extended period and all. So in a way, if you see our numbers from last three, four years, either we have to stick to some discipline or you go all out like that.

Vikash Agarwal: Basically more from the organized sector. We are taking market share, but just by giving higher discounts and extended trade period and all. If you see our numbers from last three, four years, either you have to stick to some discipline or you go all out like that. You have to balance things well to survive. But yes, you need to focus on other channels also to better the numbers and all. Other competition and everybody will understand that in incoming quarter, I think should be

Speaker #3: So you have to balance things well to survive. But yes, you need to focus on other channels also to improve the numbers and all.

Speaker #3: And your other competition and everybody will understand that in the coming quarters, things should be okay.

Rusmik Oza: Okay. The last question, sir, is maybe based on internal assessment. Is there any scope to cut cost and try to improve the margins, which can thereby improve your return ratios? Or you are running at the maximum possible cost-cutting measures? Just wanted to get some understanding on this part.

Speaker #5: Okay. I know, last question, sir. Maybe based on internal assessment, is there any scope to cut costs and try to improve the margins, which can drive improved return ratios, or are you running at the maximum possible cost-cutting measures?

Speaker #5: Just wanted to get some understanding on this part.

Speaker #3: It's always there that's a continuous process. So that we are doing efficiency also we are trying to bring in a better productivity also we are trying to bring in.

Vikash Agarwal: It is always there. That is a continuous process. That we are doing. Efficiency also we are trying to bring in. A better productivity also we are trying to bring in. So that is a continuous process. We will not say it is like we have done our best, but there is always a scope. Even there is a scope of 2%, there is a scope of 1 or 2%, we have to do it.

Speaker #3: So that's a continuous process. We won't say it's like we have done our best, but there's always a scope. When there is a scope of 2 percent, there's a scope of another 2 percent; we have to do it.

Speaker #5: Okay. Okay. Okay. Thank you, sir. Thanks. That's it from my side, and best of luck.

Rusmik Oza: Okay. Thank you, sir. That is it from my side and best of luck.

Speaker #3: Thank you.

Speaker #1: Thank you. A reminder to all the participants, if you wish to ask a question, please press star and one. I repeat, to ask a question, please press star and one.

Vikash Agarwal: Thank you.

Operator: Thank you. A reminder to all the participants, if you wish to ask a question, please press star and one. I repeat, to ask a question, please press star and one. Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Pradnya for closing comments. Thank you, and over to you, ma'am.

Speaker #1: Ladies and gentlemen, as there are no further questions, I would now like to hand the conference over to Ms. Pradnya for closing comments. Thank you, and over to you, ma'am.

Speaker #4: Thank you, everyone, for joining us on the call today. I would also like to thank the management for spending their time and answering all the queries.

Pradnya Singh: Thank you everyone for joining us on the call today. I would also like to thank the management for sparing their time and answering all the queries. We are MUFG Intime, investor relation advisors to Rupa & Company Limited. Thank you, and over to you, sir.

Speaker #4: We are MESG Intime, investor relations advisors to Rupa & Company Limited. Thank you, and over to you, sir.

Speaker #3: Thank you. Thank you for joining the call. If you have any queries, please get in touch with MESG Intime for further queries.

Vikash Agarwal: Thank you. Thank you for joining call, and if you have any queries, please get in touch with the MUFG Intime for further queries. Thank you.

Speaker #3: Thank you.

Speaker #6: Thank you so much.

Rusmik Oza: Thank you so much.

Speaker #1: Thank you. On behalf of Rupa & Company Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.

Operator: Thank you. On behalf of Rupa & Company Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

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