- 12 May 2022
- ICICIdirect Research
Kewal Kiran Clothing reports enhanced operational performanceKKCL - 404 Change: 8.30 (2.10 %)
News: Kewal Kiran Clothing reported strong revenue recovery and registered its highest ever quarterly revenues in Q4. Standalone revenue for Q4FY22 increased by 53% YoY to Rs. 169.6 crore (QoQ decline of 1%). The revenue for Q4FY22 has surpassed the pre-covid revenue of Rs. 133 crore (Q4FY19). Gross margin improved 250 bps YoY to 42.8% but still continued to be lower than pre-covid average of ~ 50%. EBITDA margin improved by 980 bps YoY on a favorable base to 19% (Q4FY21: 9.2%, Q3FY22: 16.1%). EBITDA stood at Rs. 32.2 crore vs Rs. 10.2 crore in Q4FY21 (Q3FY22: Rs. 27.5 crore). Consequently, PAT stood at Rs. 24.8 crore vs Rs. 8.2 crore in Q4FY21 (Q3FY22: Rs. 21.3 crore).
Views: KKCL has exhibited strong revenue recovery and has been reporting revenue above pre-covid levels from Q2FY22 onwards. The momentum in sales continued aided by wedding and festive buying. Gross margins improvement on YoY basis is positive while EBITDA margin is inching closer to EBITA margin of 20.7% reported in Q4FY19 (pre-covid level). Owing to its strong balance sheet (Debt equity ratio of ~ 0.2x), pan India presence and diversified brand portfolio catering to various price points, the company is well placed compared to peers to tide over the current volatile scenario.