- 25 Jul 2022
- ICICIdirect Research
Kewal Kiran Clothing reports robust operational performanceKKCL - 424 Change: 14.60 (3.56 %)
News: Kewal Kiran Clothing reported strong revenue performance and registered its highest ever quarterly revenues in Q1. Standalone revenue for Q1FY23 increased by 69% YoY to Rs 154.5 crore (QoQ decline of 9%). The revenue for Q1FY23 has surpassed the pre-covid revenue of Rs 110 crore (Q1FY20). Gross margin improved 320 bps YoY to 43.2% but still continued to be lower than pre-covid average of ~ 50%. EBITDA margin improved by 1010 bps YoY on a favorable base to 19% (Q1FY22: 8.7%, Q4FY22: 19%). EBITDA stood at Rs 29.3 crore vs Rs 7.9 crore in Q1FY22 (Q4FY22: Rs 32.2 crore). Consequently, PAT stood at Rs 21.6 crore vs Rs 8.5 crore in Q1FY22 (Q4FY22: Rs 24.8 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. Also the company has added 25 new EBO’s during Q1FY23 (total EBO’s 381) and expanded its presence in the large format stores and also fortified its presence on multiple E-commerce portal which has aided the revenue growth. Gross margins improvement on YoY basis is positive while EBITDA margin is inching closer to EBITA margin of 20.4% reported in Q1FY20 (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 benefit from the normalization of business scenario.