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Rupa Company: Rupa reports steady operational performance

News: Rupa and Company reported YoY growth of 21% in revenues to Rs.365 crore in Q2FY22. However, EBITDA margin was lower by 240 bps on a YoY basis at 19.4% owing to other expense to sales ratio increasing by 209 bps YoY to 11.78%. EBITDA growth was restricted to 8% at Rs.71 crore due to decline in EBITDA margin. Lower tax rate (19.4% in Q2FY22 vs 26.4% in Q2FY21) aided the company to register a YoY PAT growth of 17% YoY to Rs. 53 crore.

Views: Rupa and Company has been focusing on increasing sales volumes with changes in product mix. The company plans to increase its share in the premium and super premium category, enhance focus on women wear, casual wear, and thermal wear, and foray in newer markets with higher penetration in the existing markets. The company has seen improved traction during the festival season. Also the company is witnessing strong demand for its Thermal wear range. The company through its pan India network and consistent investment in brand building would be able to capture the growth opportunity and benefit from the increased demand for its product categories.