Kewal Kiran Clothing Limited - ICRA

Fundamental
Assessment
ICRA EQUITY RESEARCH SERVICE
KEWAL KIRAN CLOTHING LIMITED
Initiating Coverage Industry: Textile & Retail December 30, 2011
Fundamental and Valuation Grades
ICRA Equity Research Service has assigned the Fundamental Grade ‘4’ and
the Valuation Grade ‘C’ to Kewal Kiran Clothing Limited (KKCL). The
Fundamental Grade “4” assigned to KKCL implies that the company has
“Strong Fundamentals”. The Valuation Grade ‘C’ assigned to KKCL implies
that the company is “Fairly Valued” on a relative basis (as on the date of the
grading assigned).
Kewal Kiran Clothing Limited (KKCL) is one of the leading manufacturer and retailer of
branded apparels and fashion-wear in India. KKCL has over two decades of experience
in the domestic readymade garments industry with some established brands like
‘Killer’, ‘Lawman Pg3’, ‘Integriti’, ‘Easies’ and ‘ADDICTIONS’. KKCL markets its products
through a chain of 223 ‘K-LOUNGE’ showrooms and exclusive brand outlets (EBOs)
across the country. Besides, KKCL’s products are widely marketed at over 3,500 multibrand
outlets (MBOs) and national chain stores like Shoppers’ Stop and Hypercity.
KKCL is an established player in the denim Jeans category through its flagship Killer
brand, besides having a presence in Trousers, Shirts, T-shirts & Jackets. It has also
entered the lifestyle accessories segments like shoes, belts, watches, bracelets, wallets,
caps, bags, sunglasses and deodorants through the ADDICTIONS brand. KKCL’s
designing and manufacturing facilities are mainly located at Dadar and Goregoan
(Mumbai), Daman and Vapi in Western India.
Grading Positives
The key grading positives in our view are: 1) Strongly positioned to benefit from the
domestic consumption play due to Pan-India presence, including its first-mover’s
advantage in the Tier-II / Tier-III cities as well as relatively less penetrated eastern
states 2) established brand equity of its flagship product – Killer Jeans 3) Asset light
model reduces overhead costs while maintaining product & service standards 4)
Continued focus on profitable growth and careful store expansion are expected to
ensure healthy profitability indicators (like RoCE) for the company going forward 5)
Strong designing expertise, vast experience of the promoters’ in the branded apparel
business
Grading Sensitivities
The key grading sensitivities in our view are: 1) Intense competition in the domestic
branded apparels market with presence of large number of domestic as well as global
brands 2) Vulnerability to cotton price fluctuations and regulatory changes (like excise
duty levy) 3) Ability to scale up business while maintaining its financial profile 4) High
dependence on multi-brand outlets (MBOs) and National Chain Stores, which together
contribute ~70% of revenues, can limit bargaining power 5) Increasing contribution
from value brands (like Integriti, Lawman Pg3) and low margin products (like shirts,
T-shirts) could moderate margins; cash reserves held by the company yields lower
returns. 6) Merchandise obsolescence risks due to rapidly evolving fashion trends and
changing customer preferences
Table 1: KKCL’s key financial indicators (Consolidated)
FY10A FY11A FY12E FY13E FY14E
Operating Income (Rs. crore) 175.9 236.5 315.5 399.5 485.9
EBITDA Margin (%) 27.3% 29.1% 25.6% 25.1% 24.6%
PAT Margin (%) 18.5% 19.6% 17.3% 16.7% 16.2%
EPS (Rs.) 26.4 37.5 44.2 54.1 63.8
EPS Growth (%) 101.6% 43.3% 17.4% 24.2% 19.2%
P/E (x) 26.5 18.7 15.9 12.9 11.0
P/BV (x) 4.9 4.4 3.8 3.3 2.8
RoE 19.9% 24.8% 25.6% 27.1% 27.5%
RoCE 28.2% 36.6% 38.1% 40.2% 40.9%
EV/EBITDA 16.6 11.2 9.4 7.5 6.2
Source: Company, ICRA Equity Research Service
ICRA Online Grading Matrix
Valuation Assessment
A B C D E
5
4 4C
3
2
1
• Fundamental Grading of ‘4/5’ indicates “Strong
Fundamentals”
• Valuation Grading of ‘C’ indicates “Fairly Valued”
on a relative basis
Key Stock Statistics
Bloomberg Code
KEKC IN
Equity
Current Market Price* (Rs.) 700.0
Shares Outstanding (crore) 1.2
Market Cap (Rs. crore) 862.8
52-Week High (Rs.) 875.0
52-Week Low (Rs.) 426.5
Free Float (%) 25.9%
Beta 0.7
6 Month Avg Daily Volumes (Rs Cr) 0.3
Source: Bloomberg, as on 30th December, 2011
KKCL Industries: Current Valuations
30.0
25.0
20.0
15.0
10.0
5.0
-
26.5
16.6
18.7
11.2
15.9
Shareholding Pattern (30 th September, 2011)
9.4
Share Price Movement (18 months)
12.9
11.0
7.5 6.2
FY10a FY11a FY12e FY13e FY14e
DIIs
4%
FIIs
12%
Price/Earnings
Others
10%
EV/EBITDA
Source: Bloomberg, ICRA Equity Research Service
Promoters
74%
1

ICRA Equity Research Service
Kewal Kiran Clothing Limited
INVESTMENT SUMMARY
Strong domestic consumption play with Pan-India presence and negligible dependence on exports
East
29%
South
24%
Export
3%
Source: Company, ICRA Equity Research Service
North
15%
West
29%
Rising disposable incomes, rapid urbanisation, increasing
organized retail penetration and changing spending
trends are expected to result in branded apparels market
reach ~Rs. 700 billion by 2015 (implying 28% CAGR).
KKCL is strongly positioned to benefit from the domestic
consumption boom due to its pan-India franchise and
distribution through a wide network of multi-brand
outlets across the country. Besides, KKCL enjoys the firstmover’s
advantage in the Tier-II / Tier-III cities and
under-penetrated eastern states, which are expected to
remain the growth engines over the medium term.
Diversified brand portfolio, Strong homegrown brands nurtured over decades; presence across product
spectrum and price points
KKCL has a mature portfolio of well-established fashion
brands like ‘Killer’, ‘Lawman Pg3’ and ‘Integriti’ that have
survived across economic cycles and successfully evolved
with changing customer preferences over last two
decades. KKCL’s flagship ‘Killer’ brand enjoys strong
brand equity and is amongst the few homegrown denim
brands that have survived the competitive pressures
emanating from the entry of leading global brands. As per
recent IMRB research report, Killer brand has been
slotted amongst the Top 5 denim brands in the country.
Shirts
20%
Trousers
15%
T-Shirts
4%
Others
4%
Jeans
57%
Easies
2%
Integriti
25%
Lawman
21%
Others
1%
Source: Company, ICRA Equity Research Service
Killer is positioned mainly to cater to premium and designer wear (mainly denim jeans category), Lawman Pg3 is
positioned as trendy fashion for mid-premium clubwear (across products like jeans, trousers, shirts, t-shirts, jackets),
Source: Company, ICRA Equity Research Service
Killer
51%
Integriti is positioned as value or mass market brand
(across product range) for the price conscious consumer,
Easies is positioned as formal and semi-formal wear
(mainly trousers and shirts) and ADDICTIONS is
positioned as a dedicated lifestyle accessories brand
(across products like shoes, belts, watches, bracelets,
wallets, caps, bags, sunglasses and deodorants). Overall,
KKCL’s brands are positioned across product spectrum
and price points to garner mind-wallet share of aspiring
young population and burgeoning middle and uppermiddle
class in India.
2

Kewal
Kiran
Zodiac
Clothing
Provogue
Arvind
Lifestyle
Brands
Arvind
Retail
Raymond
Apparel
Colorplus
Fashions
Kewal
Kiran
Zodiac
Clothing
Provogue
Arvind
Lifestyle
Brands
Arvind
Retail
Raymond
Apparel
Colorplus
Fashions
ICRA Equity Research Service
Kewal Kiran Clothing Limited
Industry leading profitability indicators due to careful expansion and efficient working capital management
Unlike some domestic brand apparel manufacturers and large retailers, KKCL has restrained from acquiring market
shares by sacrificing near term profitability. Also, KKCL has maintained a relatively modest presence in intensely
competitive metro markets as high lease rentals and operating expenses could constrain profitability of its
franchisees. The company has also limited its dependence on national chain stores that enjoy higher bargaining power
and squeeze profit margins from the apparel manufacturers. Besides, the company has maintained low focus on the
exports market, since it may not command the same premium and margins as the domestic markets. All these factors
have combined to contribute a healthy profitability for KKCL.
KKCL’s brands are predominantly targeted towards mid-premium and value segments; the strategy has paid rich
dividends on account of down-trading by customers from the premium / ultra-premium catergories due to the twin
impact of high inflation and slower economic / per-capita income growth rates over the last few years. The company
has also demonstrated adequate flexibility in passing on the input cost escalations (cotton prices, fuel prices & labour
costs) relative to its peers in the value / economy segments.
KKCL derives majority of its revenues from denim jeans category that normally enjoy better margins due to higher
scope for designing and value-addition relative to casuals, shirts & trousers categories. The company has introduced
its own brands and nurtured them over the years to save royalty payments, which range around 3 to 5% for some
foreign brands leased by of its domestic competitors. Besides, KKCL’s brands are well established and focused only on
mid-premium to value segments, thereby resulting in relatively moderate advertising requirements (~4-5% of
revenues).
35%
30%
25%
20%
15%
10%
5%
0%
Branded Apparel Industry: EBITDA Margins
29%
12%
11%
9%
10%
5%
12%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Branded Apparel Industry : RoCE (%)
37%
20%
13%
12%
9%
7%
17%
Source: Company Filings, ICRA Equity Research Service
KKCL has made continuous investments in advertising/innovations to increase brand recall and create a ‘customer
pull effect’ rather than pushing its products aggressively through the distribution channel. Since the company follows
an outright sale model instead of consignment model; it has been able to efficiently manage its inventory levels, avoid
major markdowns / write-offs in case of obsolete inventories and hence optimizes operating margins for the
company. Besides, the company has low cost assets (estimated market value of manufacturing facilities, corporate
office and company owned stores significantly exceeds book value of ~Rs. 43 crore) and strong balance sheet (~Rs.
115 crore net cash and investments); resulting in low depreciation / interest costs and high non-operating incomes.
The working capital intensity too is favourable compared to its peers with strict control on receivables, while
inventory risk is partly mitigated by production against confirmed orders from its franchisees. Moreover, the
company mainly outsources production (> 55% outsourced) and distribution (~90% exclusive brand outlets are
franchisee owned) to reduce the fixed capital investments and uses outright sale model to reduce the working capital
requirements; thereby ensuring industry leading return indicators for the company.
3

Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
ICRA Equity Research Service
Kewal Kiran Clothing Limited
On the other side, merchandize obsolescence risks remain high in fashion industry; intense competition and
dependence on MBOs and National Chain Stores reduces margin for error
The company operates in rapidly evolving fashion industry, where it competes with large number of domestic as well
as global brands. Hence, failure to keep abreast with the latest fashion trends and changing customer preferences
Factory
Outlet
3%
National
Chain
Stores
9%
MBO
60%
Exports
3%
Source: Company, ICRA Equity Research Service
K-Lounge
25%
could result in obsolete inventories and affect the
competitiveness / brand equity of the company. Besides,
high dependence on MBOs and National Chain Stores
reduces the margin for error, as these third party retailers
stock products of all competing brands and are inclined
towards the latest fashion products providing higher
inventory turns and better margins. However, the
company has been able to demonstrate efficient inventory
management so far by regular monitoring of
inventory/products with its franchisses to take swift
corrective actions wherever necessary.
Profitability indicators remain vulnerable to cotton price fluctuations and regulatory changes
KKCL, being a garments manufacturer, remains vulnerable to
steep fluctuations in cotton prices. Raw cotton prices for the
Domestic Cotton Prices (Sankar 6;
Sankar-6 variety had increased from ~30,000 Rs/candy (1 70,000
Rs/Candy)
candy = 355 kg) in July 2010 to ~62,000 Rs/candy (1 candy = 60,000
355 kg) in March 2011 on account of demand revival in 50,000
developed economies and production disruptions due to 40,000
adverse agro-climatic conditions in China and Pakistan. The 30,000
steep rise in cotton prices had resulted in high cost inventories 20,000
and hence constrained volume growth as well as operating
10,000
margins across the value chain until the Q3, FY12. However, the
0
raw cotton prices have corrected significantly over the last 6-8
months to ~35,000 Rs/candy in Nov 2011 on account of
deterioration in global demand outlook and strong productions
Source: EmergingTextiles.com
estimates for the 2011-12 cotton season globally. As the high
cost inventory gets liquidated, the company is expected to benefit from lower cotton prices in the coming quarters.
The company also remains vulnerable to regulatory changes like the 10% excise duty levied on all branded apparel
during the last union budget, leading to a cascading effect across the value chain. After a representation from the
industry participants, the government agreed to a partial rollback, imposing the duty on 45% as against the earlier
60% of the MRP. The excise duty hike complicated matters at the time when the industry was already grappling with
severe cost inflation and higher raw material (cotton, polyester, etc) prices. Besides, the organized retail industry in
India continues to suffer due to stringent labour laws, multiple licences and clearances (40-45 approvals) required for
setting up and operating a retail stores, high stamp duties on property deals and exceptionally high property prices
and lease rentals in cities due to, among other things, urban land ceiling act and delays in new project approvals.
Although the proposed goods and services tax (GST) is expected to reduce complexities in doing business and
allowing foreign direct investments (FDI) in multi-brand retail is expected to improve efficiencies across the supply
chain and give a boost to KKCL’s MBO & national chain store sales, the timelines for their implementation continue to
remain uncertain.
4

FY11a
FY12e
FY13e
FY14e
Return indicator (%)
ICRA Equity Research Service
Kewal Kiran Clothing Limited
Strong revenue growth expected in-line with the branded apparel industry; increasing contribution from value
brands and low margin products could moderate margins
50.0%
45.0%
40.0%
35.0%
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
43%
42%
34% 33%
17%
18%
27%
24%
23%
Source: Company, ICRA Equity Research Service
22%
19%
18%
FY11a FY12e FY13e FY14e
Sales Growth EBITDA Growth EPS Growth
We expect the company to report 27% CAGR growth in
gross sales over the next three years, in-line with the
industry growth rates for branded apparels in India.
However, increasing contribution from value and mass
market brands like Lawman Pg3 and Integriti (which have
~3.0 times and ~2.8x MRP to prime cost ratio respectively
as compared to ~3.5 times for Killer brand) and lower
margin products like trouser, shirts and T-shirts (due to
lower scope for designing and value-addition) are
expected to moderate margins and result in 20% CAGR
EBITDA growth going forward. Finally, relatively low
depreciation and interest costs on account of asset light
business model, is expected to result in a healthy ~19%
CAGR EPS growth over the FY11-FY14e period.
However, asset light business model of expansion through franchise and third party distribution route are
expected to ensure robust profitability indicators and strong capital structure
The company had changed its business strategy in favour of an asset light model post 2008, when the lease rentals
reached peak levels and threatened the business viability of a large number of retailers. Instead of expanding through
own retail stores, KKCL’s management focussed on expanding through the franchisee and third party distribution
route, thereby lowering operational costs (overhead costs) and capex requirements. Besides, the company opted for
an outright sales model instead of consignment model and maintained tight control on receivables as well as
inventory levels. This strategy of positioning itself as a “fashion brand” rather than a “fashion retailer” has paid rich
dividends and helped the company build a business model with established brand equity, well penetrated distribution
network, healthy profitability indicators and robust capital structure. We expect the company to retain and strengthen
its asset light model with focus on branding and product innovations, supported by increasing outsourcing of
production and franchise lead distribution.
Exhibit 1: KKCL’s store details (September 2011)
KKCL's Profitability Indicators & Gearing
Store type COCO COMFO FOFO Total
K-Lounge 1 11 113 125
Killer EBO 3 45 48
LawmanPg3-EBO 4 3 7
Integriti-EBO 32 32
Addiction-EBO 5 4
Factory Outlet 7 7
Total 1 25 198 223
50%
40%
30%
20%
10%
0%
37% 38% 40% 41%
29%
26% 25% 25%
Source: Company
COCO: Company-owned company-operated
COMFO: Company-owned management franchisee-operated
FOFO: Franchisee-owned franchisee-operated
EBITDA Margin
ROCE
Total Debt/(Equity + MI)
Source: Company, ICRA Equity Research Service
o
u
5 r
c
e
:
S

ICRA Equity Research Service
Kewal Kiran Clothing Limited
As shown in the exhibit above, the company currently has 1:8 ratio of company-owned: franchise owned K-Lounge
stores and exclusive brand outlets (EBOs). Going forward, we expect the company to maintain such ratio and add over
50 exclusive stores in each of the next three years. Besides, the company currently outsources ~55% of production to
unorganized third party garment manufactures to reduce capital expenditure, labour costs and concentrate on its core
areas of designing and brand building. Overall, we expect the management to continue to focus on profitable growth
along with a careful store expansion, which will ensure strong return indicators (over 40% returns on capital
employed) and financial profile (below 0.1x debt to equity) for the company going forward.
Premium valuations justified considering the strong market positioning and balance sheet strengths
KKCL’s current valuation multiple (~12.9x times FY13 earnings) is at a premium to broader market indices like Nifty
Index, CNX 500 index or CNX Midcap index. However, KKCL continues to be one of the most reasonably valued
domestic consumption plays with strong established brand, wide distribution reach and strong balance sheet. Overall,
we expect the company to report a healthy 27% CAGR revenue growth and 19% CAGR EPS growth over the FY11a-
FY14e period, aided by rapid expansions in Tier – II and Tier – III cities. Hence, we assign a valuation grade of “C” to
KKCL on a grading scale of ‘A’ to ‘E’, which indicates that the company is “Fairly Valued” on a relative basis.
Exhibit 2: KKCL’S Relative Valuations
ICRA Estimates
KEWAL KIRAN
CLOTHING
NIFTY
INDEX
CNX 500
INDEX
CNX MIDCAP
INDEX
FY12E FY13E FY12E FY13E FY12E FY13E FY12E FY13E
Price/Earnings 15.85 12.93 13.19 11.29 12.38 10.31 10.63 8.79
EV/EBITDA 9.45 7.53 9.25 8.11 9.13 7.69 9.39 7.44
Price /Sales 2.73 2.16 1.45 1.33 1.15 1.04 0.67 0.61
Price /Book Value 3.79 3.26 2.03 1.78 1.78 1.56 1.21 1.09
Price/Cash Flow 14.06 11.46 9.46 8.15 8.93 7.42 8.17 6.34
ICRA Estimates
KEWAL KIRAN
CLOTHING
PANTALOON
RETAIL
SHOPPERS
STOP
TRENT
ARVIND
PROVOGUE
(INDIA)
FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13
Price/Earnings 15.85 12.93 13.72 10.25 36.49 23.53 n.m. 35.29 6.75 5.27 6.37 5.20
EV/EBITDA 9.45 7.53 9.66 8.26 17.01 12.14 146.01 14.70 6.14 5.54 9.42 8.14
Price /Sales 2.73 2.16 0.21 0.18 0.73 0.59 0.89 0.63 0.38 0.34 0.37 0.34
Price /Book Value 3.79 3.26 0.84 0.78 3.82 3.40 1.99 2.24 0.75 0.66 0.43 0.40
Price/Cash Flow 14.06 11.46 6.30 5.13 19.92 14.35 57.93 19.81 3.45 2.90 5.34 4.59
Source: Bloomberg, ICRA Equity Research Service * Bloomberg Consensus Estimates as on 30 th December, 2011
6

ICRA Equity Research Service
Kewal Kiran Clothing Limited
OPERATING PROFILE
Strong brands built over the years through product designing / innovations rather than competing on price
points; presence in mid-premium / value segments have paid rich dividends due to down-trading by customers
Over the years, the company has built and nourished strong brands through focus on the product innovations and
designs to create a brand identity, rather competing on price points. For example, it has always positioned “Killer” as
an upmarket/international brand by associating with foreign models for the advertisement campaigns. The exclusive
brand outlets (EBOs) are aesthetically designed to maintain consistency with the advertising campaigns and resonate
with the brand appeal. The company has stayed away from advertising on price points, thereby helping it to absorb
cost escalation and report margins better than the competition. Also, KKCL’s brands are predominantly targeted
towards mid-premium and value segments, which has paid rich dividends due to the down-trading of customers from
the premium / ultra-premium catergories due to the twin impacts of high inflation and slower economic / per-capita
income growth rates over the last few years.
Exhibit 3: KKCL’s Brand Portfolio
Brand
Launch
Year
Positioning
Average
MRP in Rs
Average
Denim
MRP in Rs
Competition
FY11
Revenues
(Rs. Cr.)
Revenues
% Share
Killer 1989
Mid-Premium
to Premium
~1,650 1,800
Lee, Levi’s, Wrangler,
UCB, Pepe Jeans
120.6 51%
Lawman Pg3 1998 Mid Premium ~1,500 1,500
Mufti, Trigger, Spykar,
Flying Machine, Bare
49.2 21%
Integriti 2002
Easies 1989
Value
to mid-premium
Value
to mid-premium
Source: Company, ICRA Equity Research Service
~1,150 1,200
~1,550
Not
Applicable
Denizen, Indigo Nation,
John Players, Peter England
John Players,
Austin Reed,
Indian Terrain
32.4 25%
5.9 2%
Killer: It was launched in 1989 and is KKCL’s flagship brand positioned as a global Indian brand conveying the trendy,
vibrant and youthful look with an attitude. With average MRP at around Rs, 1,800 per piece, it is focused towards the
mid-premium to premium denim segment for 16-30 years age group. Throughout its brand history, it has focused on
continuous innovation in style, design and product supported by adequate advertising campaign conveying the above
features and creating imagery in sync with an international brand. This has enabled it to compete well with the large
number of international denim players that have entered Indian markets. It is distributed through MBOs, EBOs, both
“K-Lounge” as well as exclusive “Killer” stores and national chain stores like ‘Shoppers Stop’ and ‘Lifestyle’.
Product portfolio: It includes ready-to-wear jeans, trousers, cargos, capris, shirts, jackets, t-shirts, innerwear (vests
and briefs), footwear (shoes, socks). It also has eye-wear and other accessories (belts, bracelets etc) in its portfolio. To
target the growing women-wear denim segment, the 'Killer for her' range was launched in 2007.
Lawman Pg3: The brand was launched in 1998 and targets the 18-30 years age group in the mid-premium segment
with average MRP for denim jeans at around Rs. 1,500. For Lawman, the company has focused on creating a theme
each season under which the designers add different textures, cuts, drapes, washes and feel to the product. The
company holds three patents under the “Lawman” brand - for introducing the ‘Yi-Fi’ stitch, Vertebrae collection
(where it has patented the ‘wash and stitch’) and “Emboss” (which was another stitch related improvement). It is
distributed through MBOs, EBOs, both “K-Lounge” as well as exclusive “Killer” stores and national chain stores like
‘Westside’ and ‘Central’.
7

Zodiac
Clothing
Raymond
Apparel
Arvind
Lifestyle
Provogue
Colorplus
Fashions
Kewal
Kiran
Arvind
Retail
Page
Industries
ICRA Equity Research Service
Kewal Kiran Clothing Limited
Product portfolio: The LawmanPg3 apparel range has shirts, blazers, jackets, denim and cotton trousers, tee-shirts,
cargos, capris, drapes, jeggings, skirts and shorts. It accessories collection includes innerwear, socks, footwear,
headwear, sunglasses, deodorants and trinkets.
Integriti: The brand was launched in 2002 mainly to counter completion from unorganised players as well as other
domestic players competing through low price points. Integriti is aimed at the price conscious value segment with
average MRP at around Rs. 1,150 for its products. Being a value brand, majority (~70%) of its sales are in Tier-II and
Tier-III cities mainly through the MBOs, balance through EBOs and a small proportion through national chain stores.
Product portfolio: The product range under the brand includes casuals and formal shirts, T-shirts, Jeans and cotton
trousers. A sub-brand “Integriti Galz” was also launched to cater to women-wear category.
Thrust on enhancing brand equity, designing latest fashions and introducing innovative product; lower focus on
in-house production to reduce fixed overheads and avoid labour issues
Over the years the company has steadily reduced its focus on manufacturing. In FY10, the company produced 76% of
the garments in-house and rest were outsourced to vendors located in Bangalore and Mumbai. In FY11, the in-house
to outsourced manufacturing ratio was 53:47, which is further expected to tilt in favour of outsourcing in FY12.
Garmenting is a labour intensive business – high labour costs coupled with the rigid labour laws has resulted in weak
competitive positioning for Indian garment manufacturers. Overall, as the management plans to stay focused on
higher value added activities like brand building and product design, significance of activities like manufacturing are
expected to reduce.
Continuous investments in advertising/marketing over the years to nurture brand image; however advertising
costs remain moderate due to established brands and exposure to mid-premium / value segments
15.0%
12.8%
12.0%
9.0%
8.3%
7.0% 7.3% 6.6%
6.0%
3.0%
4.7% 4.1%
2.5%
0.0%
Source: Annual Reports, ICRA Equity Research Service
Since it takes decades to nurture superior brands (for
example Levis, Diesel, Tommy Hilfiger, etc), KKCL has
made continuous investments in advertising/marketing to
increase brand recall and pull customers rather pushing
its brand across various channels of distribution. In
addition to print media, the company also attempts to
reach out to target audiences through contemporary
forms of advertising such as in-film placements and
cricket sponsorships (like Pune Warriors in Indian
Premium League, IPL). The company is currently running
a television advertisement campaign for its “Killer”
deodorant. However, since the company has well
established brands focused on mid-premium to value
segments, overall advertising spend for the company has
remained near the industry average (~4-5% of revenues).
Effective distribution strategy through exclusive franchisees and multi-brand outlets ensures wider penetration;
outright sale model ensures efficient inventory management
The company has carved out an effective distribution strategy wherein it has a mix of Exclusive Brand outlets – EBOs
(own as well as franchisees), Multi-brand outlets - MBOs and sales through National Chain Stores (organized retailers)
to maintain an optimum balance between growth rate / penetration levels and profitability margins.
8

FY09
FY10
FY11
FY12e
FY13e
FY14e
FY09
FY10
FY11
FY12e
FY13e
FY14e
ICRA Equity Research Service
Kewal Kiran Clothing Limited
The aesthetically designed EBOs for its “Killer”, “Lawman Pg3” and “Integriti” brands and complete brand portfolio
under “K-Lounge” stores helps builds brand image and visibility for the company. The company also has considerable
presence through national chain stores such as Shoppers’ Stop that have high footfalls and provide a vital channel for
swiftly building up brand awareness. On the other hand, distribution through multi-brand outlets (MBOs) enables the
company to expand its distribution network wide across the country and deep into Tier-III and Tier-IV towns.
The management has cautiously limited its dependence on national chain stores that enjoy higher bargaining power
and squeeze profit margins for the apparel manufacturers. Even for the exclusive brand outlets, the company mainly
uses franchisee route to reduce capital investments (fixed assets as well as inventories) and concentrate on its core
strengths of designing and brand building. However, careful screening of the franchisees owners in terms of relevant
industry experience and business acumen has helped the company to maintain services standards and brand equity.
Since the management follows an outright sale model instead of a consignment model, for its franchisees as well as
distributors, the company has been able to efficiently manage its inventory levels and hence report better the
operating margins. Again, the management has consciously maintained low focus on the exports market, since the
company may not command the same premium as domestic markets where it has high brand equity. The lower
exports dependence has also shielded the company from near term global economic uncertainties and currency
fluctuations.
100%
80%
60%
40%
20%
0%
KKCL : Distribution-wise revenue Break-up
5% 8% 9% 10% 12% 13%
58% 58% 60% 58% 56% 54%
28% 27% 25% 26% 27% 27%
Exports
Factory Outlet
100%
80%
KKCL : Geographic revenue break-up
22% 25% 29% 31% 32% 33%
National Chain
60% 26% 25% 24% 22% 22% 21%
Stores
40%
MBO
34% 32% 29% 27% 27% 26%
20%
K Lounge 14% 15% 16% 16% 16% 17%
0%
Export
East
South
West
North
Source: Company, ICRA Equity Research Service
Geographically well diversified sales mix; thrust on under-penetrated Eastern region likely to continue
KKCL has a well diversified geographic sales mix, mainly owing to its wide distribution network spanning the length
and breadth of the country. The company is based out of Mumbai and has traditionally had a strong presence in the
Western region and Southern states of the country. However, the Eastern region has emerged as a strong growth
driver for the company in recent periods due to increasing brand recognition, rapid distribution expansion and low
penetration of branded apparels and fashion products in these markets.
However, the company has relatively modest presence and market share in the otherwise lucrative Northern region
due to intense competition, unfavourable credit terms demanded by the distributors and lack of winter-wear products
in its portfolio. Nevertheless, the company has revamped its distribution set-up in the region to focus on growth
through exclusive stores and introduced a wide range of winter-wear merchandises (like jackets and woollen wears)
to cater to the northern region. The above strategies seem to have already started to pay off, as evident through ~43%
revenue growth in the region in FY11.
9

FY09
FY10
FY11
FY12e
FY13e
FY14e
FY09
FY10
FY11
FY12e
FY13e
FY14e
ICRA Equity Research Service
Kewal Kiran Clothing Limited
Dependence on flagship “Killer” brand to reduce with strong growth from value brands as well as recently
launched lifestyle accessories brand ‘ADDICTIONS’
KKCL is an established player in the domestic denim jeans market through its flagship “Killer” brand, which has been
consistently contributing over 50% of KKCL’s revenues in the past. The mid-premium brand continues to be slotted
amongst the Top-5 denim brands in the country, enjoys strong brand equity and is amongst the few homegrown
denim brands that have survived the competitive pressures emanating from the entry of leading global brands.
However, the Killer brand did not cater to the mass value-conscious segment constituting the largest consumer base
in the domestic market. As a result, the company introduced “Lawman Pg3” and “Integriti” cater to “mid-premium”
and “Value” segments respectively and garner its fair market share in the value market segment. These brands have
exhibited robust growth rates over the last few years due to customer down-trading due to high primary articles
inflations and impact of uncertain economic conditions. We expect these brands to continue to grow at a faster CAGR
going forward due to increasing acceptance / brand awareness for these brands. Besides, the recently launched
lifestyle accessories brand “ADDICTIONS” too is expected to start contributing meaningfully in the top-line growth of
the company going forward. Overall, we expect the revenue contribution from ‘Killer’ brand to reduce from ~51% in
FY11 to ~45% in FY14 and thereby reducing the brand concentration of the company over the next three years.
100%
80%
60%
40%
20%
0%
KKCL : Brand-wise revenue break-up
Addictions
22% 23% 25% 23% 23% 23% Integriti
21% 22% 21% 20% 21% 21% Easies
52% 52% 51% 47% 46% 45%
Lawman
Killer
KKCL : Product-wise revenue contributions
100%
Others
80% 19% 21% 20% 22% 23% 24% T-Shirts
60% 19% 17% 15% 12% 11% 10%
Shirts
40%
20%
53% 55% 57% 54% 53% 52% Trousers
0%
Jeans
Source: Company, ICRA Equity Research Service
Presence across product spectrum and price points; dependence on jeans category to reduce with increasing
contribution from Shirts, T-shirts, Winter-wears and lifestyle accessories
“Killer” is positioned mainly to cater to mid-premium to premium and designer wears (mainly denim jeans category),
“Lawman Pg3” is positioned as trendy fashion for mid-premium clubwears (across products like jeans, trousers,
shirts, t-shirts, jackets), “Integriti” is positioned as value or mass market brand (across product range) for the price
conscious consumer, “Easies” is positioned as formal and semi-formal wear (mainly trousers and shirts) and
“ADDICTIONS” is positioned as a dedicated lifestyle accessories brand (across products like shoes, belts, watches,
bracelets, wallets, caps, bags, sunglasses and deodorants). Overall, KKCL’s brands are positioned across product
spectrum and price points to garner mind-wallet share of aspiring young population and burgeoning middle and
upper-middle class in India.
Traditionally, KKCL has been strongly associated with the denim jeans category that contributed over 55% of the
overall revenues of the company. However, the company has introduced large number of products and brand
extension across categories like women’s wears, winter-wears, shirts, t-shirts, trousers and lifestyle accessories. As a
result, we expect the contribution of jeans category to decline from ~57% in FY11 to ~52% in FY14.
10

ICRA Equity Research Service
Kewal Kiran Clothing Limited
Industry leading profitability indicators due to careful expansion and efficient working capital management
KKCL enjoys the highest operating margins among the industry peers attributable to its focus on profitable growth.
Additionally, since the company operates on an outright sales model for majority of its sales, it does not have to
provide for inventory markdowns in its books as compared to the industry players aiding operating profitability. The
working capital intensity too is favourable compared to its peers with strict control on receivables while inventory
risk is partly mitigated by production against confirmed orders. Besides, the company continues to enjoy high net
margins as its depreciation & interest costs are among the lowest in the industry, while the return indicators benefit
from the franchisee model requiring lower capital investments.
Exhibit 4: Industry Comparison
Brands
Brand
ownership
Category
Domestic-
Export mix
Distribution
Manufacturing
Kewal Kiran Zodiac Provogue
Killer, Lawman
Pg 3,Integriti
Owned
Present across
premium, midpremium
and
value segments
for casual wear
Domestic
~95%, balance
5% exports
Mainly through
MBOs and
exclusive
franchisees
53% in-house,
balance 47%
outsourced
Zodiac, Z3 and
ZOD!
Licensed from
its group
company
Premium
segment across
formal wear,
party and
relaxed casual
wear
60% Exports
and balance
40% domestic
Through MBOs,
company leased
stores and
national chain
stores
In-house
Provogue
Owned
Mid-premium
to premium
segment for
casual, party
and formal
wear
44% Exports
and balance
56% domestic
sales
Through
exclusive
outlets and
national chain
stores
60% in-house,
balance
outsourced
Arvind
Lifestyle
Brands
Limited
Flying Machine,
Arrow, US Polo
Assn., IZOD,
Energee, Gant
Except Flying
Machine others
are licensed
Premium to
super-premium
segment for
casual wear,
semi-formal
and formal
wear
Majority
domestic sales
Own retail
stores, MBOs as
well as National
chain stores
Arvind Retail
Excalibur,
Cherokee,
Mix of owned
and licensed
Value segment
across casual
wear, formal
wear and semiformal
wear
Majority
domestic sales
Distribution
through own
retail
Raymond
Apparel
Raymond, Park
Avenue and
Parx
Owned
Premium
segment for
casual and
formal wear
Majority
domestic sales
Through
wholesalers,
MBOs, national
chain stores
and exclusive
stores
Colorplus
Fashions
Colorplus
Owned
Premium
segment for
casual wear
Majority
domestic sales
Through
wholesalers,
MBOs, national
chain stores
and exclusive
stores
Not available Not available Not available Not available
FY11 (Rs Cr) FY11 (Rs Cr) FY11 (Rs Cr) FY11 (Rs Cr) FY11 (Rs Cr) FY11 (Rs Cr) FY11 (Rs Cr)
Net Sales 236.5 356.3 561.3 415.8 374.6 471.3 172.2
EBITDA 68.9 38.3 69.9 38.2 20.1 48.6 20.5
PAT 46.2 33.2 33.5 10.2 -0.2 22.6 10.4
Sales growth 34% 8% 26% 64% 32% 8% 5%
PAT growth 42% 26% 9% 387% n.m.* 99% n.m.*
EBITDA (%) 29% 11% 12% 9% 5% 10% 12%
PAT (%) 20% 9% 6% 2% 0% 5% 6%
ROCE 37% 20% 7% 13% 9% 12% 17%
RONW 25% 17% 5% 7% 0% 22% 14%
Gearing 0.0 0.2 0.3 0.7 1.8 1.4 0.1
Debtor days 46 37 114 105 5 30 20
Payable days 51 42 47 177 142 70 62
Inventory days 112 127 235 209 164 196 194
Source: Company filings, ICRA Equity Research Service
*n.m. stands for ‘not meaningful’
11

Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-11
Feb-11
Mar-11
Apr-11
May-11
Jun-11
Jul-11
Aug-11
Sep-11
Oct-11
Nov-11
Dec-11
ICRA Equity Research Service
Kewal Kiran Clothing Limited
Profitability indicators remain vulnerable to cotton price fluctuations; volume/margin pressures likely to ease
from Q4, FY12 onwards when the decline in cotton prices will reflect for the garment retail industry
KKCL, being a leading garments manufacturer, remains
vulnerable to steep fluctuations in cotton prices. Raw cotton
Domestic Cotton Prices (Sankar 6;
prices for the Sankar-6 variety had increased from ~30,000
Rs/Candy)
Rs/candy (1 candy = 355 kg) in July 2010 to ~62,000 70,000
Rs/candy (1 candy = 355 kg) in March 2011 on account of 60,000
demand revival in developed economies and production 50,000
disruptions due to adverse agro-climatic conditions in China
40,000
and Pakistan. The steep rise in cotton prices had resulted in
30,000
high cost inventories and hence constrained volume growth
20,000
as well as operating margins across the value chain until the
10,000
Q3, FY12. However, the raw cotton prices have corrected
0
significantly over the last 6-8 months to ~35,000 Rs/candy
in Dec 2011 on account of deterioration in global demand
outlook and healthy productions estimates for the 2011-12
cotton season globally.
Source: EmergingTextiles.com; ICRA Equity Research Service
Raw material costs accounts for a higher proportion of the
Denim fabric costs due to higher cotton yarn usage than trouser/shirting fabrics. As a result, the denim fabric prices
had risen by approximately 30-40% in the past one year while shirting fabric prices had risen by 20-25% in the same
period. Faced with the twin challenge of rising input costs and excise duty hike, most players had increased their
prices with KKCL increasing it by about 10-12%. Since the production cycle for branded apparel manufacturers
function with a lag of about eight-nine months, the pricier garments produced from high cost fabric inventory will
remain in the retail stores until Q3, FY12. This has led to some volume pressure as witnessed in slowdown in same
store sales during the current season as well as margin pressure as the raw material cost increases could not be
passed on completely. The lower cotton costs will start reflecting for branded apparel industry only from Q4 FY12
onwards, easing pressure on the volumes as well as operating margins of the players across the value chain.
Regulatory changes a risk factor..
The company also remains vulnerable to regulatory changes like the 10% excise duty levied on all branded apparel
during the last union budget, leading to a cascading effect across the value chain. After a representation from the
industry participants, the government agreed to a partial rollback, imposing the duty on 45% as against the earlier
60% of the MRP. The excise duty hike complicated matters at the time when the industry was already grappling with
severe cost inflation and higher raw material (cotton, polyester, etc) prices. Besides, the organized retail industry in
India continues to suffer due to stringent labour laws, multiple licences and clearances (40-45 approvals) required for
setting up and operating a retail stores, high stamp duties on property deals and exceptionally high property prices
and lease rentals in cities due to urban land ceiling act and delays in new project approvals. Although the proposed
goods and services tax (GST) is expected to reduce complexities in doing business and allowing foreign direct
investments (FDI) in multi-brand retail is expected to improve efficiencies across the supply chain and give a boost to
KKCL’s MBO & national chain store sales, the timelines for their implementation continue to remain uncertain.
Free Trade Agreement with Bangladesh likely to result in cost efficiencies for the branded apparel companies
KKCL’s strategy towards outsourcing is expected to receive a thrust after the recent Free Trade Agreement signed
with Bangladesh. Earlier, there was a cap on import of garments from Bangladesh at 10 million pieces, which is now
removed with effect from September, 2011. Though the Bangladeshi garment sector lacks a raw material base, it has
12

ICRA Equity Research Service
Kewal Kiran Clothing Limited
emerged more cost competitive than even the Chinese manufacturers owing to significant low labour cost costs,
economies of scale, flexible labour laws and subsidies from the Government which makes garmenting cost effective.
The recent free trade agreement is likely to create substantial cost savings for the industry and help the branded
apparel industry to reduce prices after recent inflationary trends witnessed over the past one year. KKCL has also
started making efforts in this direction for exploring the options of outsourcing manufacturing to Bangladesh.
Proposed Goods and Services Tax (GST) could provide further fillip
The implementation of the proposed goods and services tax (GST) can provide further fillip to organized retail growth
by reducing complexities of doing business, improving efficiencies across the supply chain and optimizing the taxation
system of the country. Currently organized retailers pay value added tax (VAT: 5% to 12.5%) which is generally
evaded by the unorganized players. Besides, organized retailers pay service tax (10.3%) on lease rentals which would
be completely setoff once GST is implemented. Again, Inter-state taxes like central sales tax (2%) and local octroi taxes
result in retailers having multiple warehouses to reduce taxes. This results in losses due to wastage, over-investments
and sub-optimal inventories, while investments in high-end warehousing and storage facilities remain restricted. GST
implementation will enable efficient implementation of hub-and-spoke distribution model, help rationalize entire
supply chain, optimize warehousing capacities and reduce storage, handling and transport costs for the organized
retailers. Besides, GST is expected to streamline documentation and reduce multiple tax incidences from central, state
and local government bodies; thereby facilitating uniform retail pricing across the country.
Robust growth expected over the next three years through product/brand extensions and entry into “lifestyle”
products such as bags, headgear, eyewear etc. and personal care segment
The company initially mainly focused on jeans under its flagship brand, “Killer”. However, over the years, it gradually
expanded into other product categories such as trousers, shirts and T-shirts under “Killer” as well as its other brands.
Additionally, most of the sales were of men’s apparels until now, with little focus on women’s wear. With the increase
in number of working women, rising income levels and a cultural shift in favour of western outfits, the women’s
branded apparels market has seen higher growth rates where KKCL has already started tapping the opportunity. We
expect the proportion of sales from women’s apparels to increase in the coming future and drive part of the growth
for the company. Additionally, with rise in disposable incomes, spend on personal care products like deodorants and
lifestyle accessories such as eyewear, sunglasses etc., has received a huge thrust in the past few years. With the
growth the segment has seen increased competition from players such as Provogue and Titan which have launched
their own stores in the past. The company has started retailing such products through its newly launched
“ADDICTIONS” outlets. Currently, the concept is in the initial stage and management expects to give the segment a
push once it is able to gauge the initial market response and demand. We expect “ADDICTIONS” to contribute ~9% of
overall sales by FY14.
Asset light franchisee model leading to low capital requirements and high return on investments
Post FY08, the company had changed its retail distribution model from company owned/leased stores to franchisee
owned/leased stores, where the franchisee bears all capital investments as well as the operational costs, chiefly rental
and overhead costs for the stores. While the company shares considerable margins with its franchisees, distributors
as well as third party manufacturers; the asset light business model facilitates rapid ramp-up in operations without
substantial capital requirements. Besides, substantial outsourced production provides economies of scale while
keeping the company relatively immune to demand slowdowns or labour unrest related issues. Moreover, lower
capital requirements results in robust return indicators (RoCE ~36%) and strong balance sheet position with almost
zero debt and free cash & cash equivalents of ~Rs. 120 crore. Currently the ratio of company owned to franchisee
stores stand at 1:8; going forward we expect the company to maintain such ratio and add about 75 exclusive stores in
each of the next three years ensuring strong free cash flow generation and return indicators.
13

2005
2009
2010e
2015e
2020e
ICRA Equity Research Service
Kewal Kiran Clothing Limited
Industry Scenario
As per Images Yearbook 2011, the size of the domestic textile and apparel Industry is estimated at Rs. 246,000 crore
with apparels constituting approximately 70% of the market at Rs. 170,900 crore. The apparel segment is expected to
grow at a CAGR of 11% over the next five years to grow to Rs, 288,880 crore. Increasing population with rising
disposable incomes, rapid urbanisation, change in spending attitude and increasing retail penetration into smaller
cities are expected to be crucial growth drivers.
Total Apparel Market (Rs Crore)
470,000
Total Apparel Market (Rs Crore)
11%
101,425
154,000 170,900
288,880
1%
5% 5%
Population
Growth
Increase in
Individual
Consumption
Growth in Unit
Value
Total CAGR
Source: Images Yearbook, ICRA Equity Research Service
Percentage of Organized and Unorganized Sectors
in Retail Industry
87% 86% 83% 75%
13% 14% 17% 25%
Source: Images Yearbook, ICRA Equity Research Service
60%
40%
2005 2009 2010e 2015e 2020e
Organised
Unorganized
The organised apparel retail sector shall lead the way for
the domestic apparel industry, likely to grow at ~28%
CAGR between 2010 and 2015. Thus the organised
garment retail penetration shall increase to ~25%
(translating to a market of Rs. 72,200 crore) in 2015 from
~16% at present (~Rs. 27,350 crore). This presents ample
room for all organised players to compete and grow while
presenting significant advantage for established industry
players such as KKCL to capture a greater share of the
consumer’s wallet.
KKCL’s target segment between 16-25 age is expected to witness higher than the average 11% growth expected for
the readymade garment industry. This is expected to be fuelled by the growth of services sector especially the new
generation IT and BPOs which is expected to generate higher employment among the youth leading to their greater
consumption. Furthermore, Segment wise, women’s wear and girl’s wear is expected to lead the growth with CAGR of
12% and 11% respectively while menswear and boy’s wear are expected to grow at relatively lower CAGR of 9% and
10% respectively. The increased growth in women’s wear reflects increasing independence among women as a
greater number enters the workforce and changing lifestyle which encourages higher spending among women. In line
with higher expected growth for women’s wear, KKCL too has increased its focus on the segment and is marketing
aggressively through events and advertising focussing on women. Also there is paucity of national brands targeted
exclusively at women and KKCL intends to capture this largely untapped market.
14

ICRA Equity Research Service
Kewal Kiran Clothing Limited
Currently share of urban market is higher at 55% with greater organised retail penetration than the rural market.
However, the rural market at 45% share remains extremely underserved with huge potential for organised retail to
grow. KKCL is well positioned with respect to the rural market too having its value to mid-premium brand, Integriti
and mid-premium offering, Lawman Pg3 in the portfolio.
Boys
10%
Girls
9%
2009
Mens
43%
Boys
10%
Girls
9%
2015e
Mens
40%
Boys
10%
Girls
10%
2020e
Mens
37%
Women
38%
Women
41%
Women
43%
Source: Company, ICRA Equity Research Service
The Indian denim market (CY 2009) is estimated at Rs. 4,600 crore with menswear segment dominating at Rs. 3,900
crore, followed by women-wear at Rs. 415 crore and balance comprised by girls-wear and boys-wear categories. The
menswear market is expected to exhibit a moderate 9% CAGR with the women-wear category to expand at 13%
CAGR. Even though the readymade denim wear market has been on a growth trajectory, the per capita consumption
still lags behind considerably that of large consuming economies. The Indian average is between 2-3 pairs of jeans visa-vis
China at 4 and US with 9, indicating the growth potential of the domestic denim market. A fast growing middle
class and changing income pyramid is further expected to fuel growth. In terms of demanding the latest fashion
trends, the Indian consumer is less dynamic as compared to the more fashion forward western consumers. Currently,
basic denims comprise 50-60% of the denim category, 25-30% is value-added while only 5-10% can be considered as
a “fashion” product. The proportion is broadly expected to remain on similar lines in the medium term.
The company has maintained distinct identity of each of its brands by focussing on the softer aspects such as unique
features and creating a lifestyle product so that people are drawn towards the brand for these reasons and not on
price. For example, it has always positioned “Killer” as an upmarket brand by associating/using foreign models for the
advertisement campaigns. It has never advertised on pricing of its products, as it is difficult to retain customers once
the price point moves. Thus it has been able to pass on cost increases better than the peer group, which in-turn has
allowed it to generate above-average operating margins.
15

FY10a
FY11a
FY12e
FY13e
FY14e
FY10a
FY11a
FY12e
FY13e
FY14e
Rs Crore
Rs Crore
FY09a
FY10a
FY11a
FY12e
FY13e
FY14e
FY09a
FY10a
FY11a
FY12e
FY13e
FY14e
Rs Crore
Rs Crore
ICRA Equity Research Service
Kewal Kiran Clothing Limited
FINANCIAL OUTLOOK
Healthy revenue growth visibility through higher sales volumes and increasing realizations
We expect KKCL to remain a leading branded apparel manufacturer with a strong retail presence across the country
through a mix of own stores, franchisee stores, national chain stores and multi-brand outlets. We expect KKCL’s sales
to increase from ~3.36 million pieces in FY11 to ~5.55 million pieces by FY14e, resulting in a healthy 18% CAGR
volume growth. While the realizations are expected to increase by ~10% in FY12e due to the increase in excise duties
on branded apparels, we have assumed 5% CAGR increase in realizations thereafter.
6
5
4
3
2
1
0
15%
2.36 2.72
23% 30%
20% 20% 25%
15% 20%
15%
10%
5.55
5%
4.82
0%
4.03
3.36
-5%
-10%
-15%
-20%
900
800
700
600
500
400
300
200
100
0
8% 5% 7%
10% 5%
5%
608 639 685 750 787 827
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
Apparels in Mns Growth %
Realization Rs/Pc Growth %
Source: Company, ICRA Equity Research Service
Strong revenue growth expected in-line with the industry; increasing contribution from value brands & low
margin products could moderate margins
Overall, we expect the company to report a strong 27% CAGR in net sales over the next three years in line with the
strong industry growth rates and KKCL’s established position in branded apparels in India. However, increasing
contribution from value and mass market brands like Integriti (which has ~2.8x MRP to prime cost ratio vs. ~3.0
times for Lawman Pg3 and ~3.5 times for Killer brand) and lower margin products like trouser, shirts and T-shirts
(due to lower scope for designing than in denim jeans) are expected to moderate the EBITDA margins by ~450 bps
(from ~29.1% in FY11 to ~24.6% in FY14e). However, relatively low depreciation and interest costs, on account of
asset light business model followed by the company, is expected to reduce the impact on net profit margins, which are
expected to contract by ~340 bps (from 19.6% in FY11 to 16.2% in FY14e) over the next three years.
600
500
400
300
200
100
0
KKCL's Consolidated Revenue Growth
21%
176
34% 33% 27% 22%
236
315
400
486
40.0%
30.0%
20.0%
10.0%
0.0%
150
100
50
0
KKCL's Trend in Profitability Margins
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
Operating Income (OI) Growth Rate (%)
EBITDA
EBITDA Margin (RHS)
PAT
PAT Margin (RHS)
Source: Company, ICRA Equity Research Service
16

FY10a
FY11a
FY12e
FY13e
FY14e
FY10a
FY11a
FY12e
FY13e
FY14e
Rs / Share
Return indicator (%)
ICRA Equity Research Service
Kewal Kiran Clothing Limited
Asset light business model of expansion through franchise and third party retailing route would ensure industry
leading profitability indicators and strong capital structure going forward
We expect the company to retain and strengthen its asset light model with optimal mix of own vs. outsourced
production as well as own vs. franchise distribution that reduces overhead costs while maintaining product & service
standards. The company currently has 1:8 ratio of company-owned: franchise owned K-Lounge stores and exclusive
brand outlets (EBOs). Going forward, we expect the company to maintain similar ratio and add about 75 exclusive
stores in each of the next three years at an estimated capex of Rs. 130 crore (Rs. 60 crore for infrastructure and Rs. 70
crore for working capital management).
Strong operating profitability and relatively moderate capital requirements are expected resulting in further
improvement in RoCE (from ~36.6% to ~40.9%) and RoE (from ~24.8% to ~27.5%) during the next three years.
Besides, healthy cash accruals are expected to increase the cash and bank balances from ~Rs 95 crore to ~Rs. 125
crore during the same period. Overall, we expect a robust 19% CAGR growth in EPS from 37.5 Rs/share to 63.8
Rs/share for the company over the FY11-FY14e period, aided by stable store expansion and healthy domestic demand
for branded / fashion apparels.
KKCL's EPS Growth
KKCL's Return Indicators & Gearing
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
26
38
44
54
64
140.0%
120.0%
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
0.10
0.08
0.06
0.04
0.02
0.00
EPS
EPS Growth
ROCE RoE Total Debt/(Equity + MI)
Source: Company, ICRA Equity Research Service
17

ICRA Equity Research Service
Kewal Kiran Clothing Limited
COMPANY PROFILE
Kewal Kiran Clothing Limited (KKCL) is a leading manufacturer and retailer of branded apparels and fashion-wear in
India. KKCL has over two decades of experience in the domestic readymade garments industry with some leading
brands like ‘Killer’, ‘Lawman Pg3’, ‘Integriti’, ‘Easies’ and ‘ADDICTIONS’.
KKCL is an established player in the ‘Jeans’ segment through its flagship Killer brand, besides having a formidable
presence in Trousers, Shirts, T-shirts & Jackets segments and an emerging presence in lifestyle accessories like shoes,
belts, watches, bracelets, wallets, caps, bags, sunglasses and deodorants through the ADDICTIONS brand.
KKCL markets its products through a chain of 223 ‘K-LOUNGE’ showrooms and exclusive brand outlets (EBOs) across
the country. Besides, KKCL’s products are widely marketed at over 3,500 multi-brand outlets (MBOs) and national
chain stores like Shoppers stop and Hypercity. KKCL’s designing, fabric washing, cutting, stitching and garment
manufacturing facilities are mainly located at Dadar and Goregoan (Mumbai), Daman and Vapi in Western India.
Exhibit 5: Company Factsheet
Name of the Company
Kewal Kiran Clothing Limited (KKCL)
Year of Incorporation 1980
Nature of Businesses
Branded apparels manufacturing and retailing
Products
Jeans, Trousers, Shirts, T-shirts, Jackets and Lifestyle accessories
Brands
‘Killer’, ‘Lawman Pg3’, ‘Integriti’, ‘Easies’ and ‘ADDICTIONS’
Company Stores
125 K-Lounges, 48 Killer EBOs, 32 Integriti EBOs, 7 LawmanPg3-EBOs, 4 Addiction-EBO, 7 Factoy Outlet
Distribution Network
Over 3,500 Multi-brand outlets (MBOs) and National Chain stores (like Shoppers stop and Hypercity)
Exports
Middle East, Sri Lanka, Nepal and other countries
Vendors
Fabric manufacturers like Arvind Mills, Raymond, KG Denim, etc
Manufacturing Capacity
3.5 Million pieces per annum (could be stretched further depending on product mix)
Manufacturing Locations Washing, cutting, stitching and garmenting facilities at Dadar and Goregaon (Mumbai), Daman and Vapi
Board of Directors
Mr. Kewalchand P. Jain
Mr. Hemant P. Jain
Mr. Dinesh P. Jain
Mr. Vikas P. Jain
Mr. Popatlal F. Sundesha
Mr. Mrudul D. Inamdar
Dr. Prakash A.Mody
Mr. Nimish G. Pandya
- Chairman & Managing Director
- Executive Director
- Executive Director
- Executive Director
- Independent Director
- Independent Director
- Independent Director
- Independent Director
Key Joint Ventures
33% stake in White Knitwear Private Ltd in Surat SEZ
Bankers
Standard Chartered Bank
Auditors
M/s. Jain & Trivedi, M/s. N.A. Shah Associates
IPO Details
Rs. 80.6 crore raised in 2006, Issue of 31 lac shares at Rs. 260 per share, shares are listed on BSE and NSE
Registered & Corporate Office Kewal Kiran Estate, Behind Tirupati Udyog, 460/7, I.B. Patel Road, Goregaon (East), Mumbai - 400 063
Windmill
0.6 MW Capacity at Survey No.1119/P, Village Kuchhadi, Taluka Porbunder, District Porbunder, Gujarat
Source: Company, ICRA Online Research
18

ICRA Equity Research Service
Kewal Kiran Clothing Limited
KKCL’s Key Milestones:
1980:
M/s Keval Kiran
& Co
incorporated
1989:
Launch of
‘KILLER’
1998:
Launch of
‘LAWMAN’
& ‘EASIES’
2002:
Launch of
‘INTEGRITI’
2004:
Launch of
the first ‘K-
LOUNGE’
2006:
IPO of 31
Lac Shares
2007:
KILLER
WOMEN
Wear
Launched
2011:
Launch of
'Addictions'
KKCL’s Corporate Structure:
Kewal Kiran Clothing Limited (KKCL)
Branded apparel
manufacturer and retailer
Killer
Lawman Pg3
easies
Integriti
Addictions
Launch: 1989
Launch: 1998
Launch: 1998
Launch: 2002
Launch: 2011
Segment: Premium
Segment: Mid-premium
Segment: Mid-premium
Segment: Value
Segment: Lifestyle
Products: Denim Jeans,
Designer wear
Products: Clubwear
Jeans, Shirts, Jackets,
trousers, etc
Products: Formal &
Semi-formal menswear
Products: Casuals,
formals and Jeans
Products: Footwear,
Gym Wear, Swim Wear,
eyewear, etc
Revenue Contribution:
51%
Revenue Contribution:
21%
Revenue Contribution:
2%
Revenue Contribution:
25%
Revenue Contribution:
1%
Competition: Levis, Lee,
Spyker, Pepe, Wrangler
Latest Innovations &
Launches: Winter wear –
Jackets and Sweaters
Competition: Mufti,
Newport, Flying
Machine, etc
Latest Innovations &
Launches: Vertebrae and
Chica range
Competition: Peter
England, Dockers, S.
Kumars, etc
Latest Innovations &
Launches: Winter wear
Competition: Mufti,
Adams, Ruff & Tuff, etc
Latest Innovations &
Launches: Integriti Galz
Competition: Titan,
Fastrack, etc
Latest Innovations &
Launches: Deodorants
and personal care
products
Source: Company, ICRA Online Research
Governance structure:
KKCL is managed by an eight member Board, which includes four independent directors and four members from the
Jain family. While the family is closely involved in running KKCL’s business, the company has a professional
management structure across the company. The promoter group holds 74% equity stake in the company and the rest
is widely held by institutional and retail investors. The disclosures in KKCL’s Annual Report are adequate and have
been broadly in line with that followed by the industry.
19

ICRA Equity Research Service
Kewal Kiran Clothing Limited
VALUATION GRADING
In assessing a company's valuation, various parameters are looked at including the company's earnings and growth
prospects; its ability to generate free cash flows and its capacity to generate returns from the capital invested. The
valuation is also benchmarked against an appropriate peer set or index. The opinion on a company's relative valuation
is expressed using the following five-point scale as follows:
Exhibit 6: ICRA Equity Research Service—Valuation Grades
Valuation Grade
Grade Implication
A
Significantly Undervalued
B
Moderately Undervalued
C
Fairly Valued
D
Moderately Overvalued
E
Significantly Overvalued
While assessing a company's relative valuation,
the historical price volatility exhibited by the
stock, besides its liquidity, is also taken into
account. The extent of overvaluation or
undervaluation is adjusted for the relative
volatility displayed by the stock.
Source: ICRA Online Research
KKCL’s current valuation multiple (~12.9x times FY13 earnings) is at a premium to broader market indices like Nifty
Index, CNX 500 index or CNX Midcap index. However, KKCL continues to be one of the most reasonably valued
domestic consumption plays with strong established brand, wide distribution reach and strong balance sheet. Overall,
we expect the company to report a healthy 27% CAGR revenue growth and 19% CAGR EPS growth over the FY11a-
FY14e period, aided by rapid expansions in Tier – II and Tier – III cities. Hence, we assign a valuation grade of “C” to
KKCL on a grading scale of ‘A’ to ‘E’, which indicates that the company is “Fairly Valued” on a relative basis.
Exhibit 7: KKCL’S Relative Valuations:
ICRA Estimates
KEWAL KIRAN
CLOTHING
NIFTY
INDEX
CNX 500
INDEX
CNX MIDCAP
INDEX
FY12E FY13E FY12E FY13E FY12E FY13E FY12E FY13E
Price/Earnings 15.85 12.93 13.19 11.29 12.38 10.31 10.63 8.79
EV/EBITDA 9.45 7.53 9.25 8.11 9.13 7.69 9.39 7.44
Price /Sales 2.73 2.16 1.45 1.33 1.15 1.04 0.67 0.61
Price /Book Value 3.79 3.26 2.03 1.78 1.78 1.56 1.21 1.09
Price/Cash Flow 14.06 11.46 9.46 8.15 8.93 7.42 8.17 6.34
ICRA Estimates
KEWAL KIRAN
CLOTHING
PANTALOON
RETAIL
SHOPPERS
STOP
TRENT
ARVIND
PROVOGUE
(INDIA)
FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13 FY12 FY13
Price/Earnings 15.85 12.93 13.72 10.25 36.49 23.53 n.m. 35.29 6.75 5.27 6.37 5.20
EV/EBITDA 9.45 7.53 9.66 8.26 17.01 12.14 146.01 14.70 6.14 5.54 9.42 8.14
Price /Sales 2.73 2.16 0.21 0.18 0.73 0.59 0.89 0.63 0.38 0.34 0.37 0.34
Price /Book Value 3.79 3.26 0.84 0.78 3.82 3.40 1.99 2.24 0.75 0.66 0.43 0.40
Price/Cash Flow 14.06 11.46 6.30 5.13 19.92 14.35 57.93 19.81 3.45 2.90 5.34 4.59
Source: Bloomberg, ICRA Equity Research Service * Bloomberg Consensus Estimates as on 30 th December, 2011
20

ICRA Equity Research Service
Kewal Kiran Clothing Limited
ANNEXURES
Kewal Kiran Clothing Limited – Revenue Break-up (Consolidated)
FY09a FY10a FY11a FY12e FY13e FY14e
Killer
Volumes (Mn Pcs) 1.10 1.31 1.52 1.81 2.12 2.42
Growth % 18.5% 16.3% 18.7% 17.1% 14.3%
Realizations (Rs/ Pc) 681 700 780 854 896 941
Growth % 2.8% 11.3% 9.5% 5.0% 5.0%
Sales (Rs Crore) 75.27 91.72 118.77 154.39 189.90 227.88
Growth % 21.9% 29.5% 30.0% 23.0% 20.0%
Integriti
Volumes 0.68 0.80 1.05 1.23 1.50 1.74
Growth % 16.5% 31.9% 17.0% 21.9% 16.2%
Realizations 475 515 553 606 636 668
Growth % 8.6% 7.3% 9.5% 5.0% 5.0%
Sales 32.41 41.03 58.09 74.40 95.23 116.18
Growth % 26.6% 41.6% 28.1% 28.0% 22.0%
Lawman Pg3
Volumes 0.50 0.59 0.70 0.87 1.06 1.23
Growth % 17.8% 19.0% 24.6% 21.9% 16.2%
Realizations 620 652 697 763 802 842
Growth % 5.2% 6.9% 9.5% 5.0% 5.0%
Sales 30.89 38.28 48.71 66.47 85.09 103.81
Growth % 23.9% 27.2% 36.5% 28.0% 22.0%
Easies
Volumes 0.10 0.06 0.06 0.09 0.11 0.13
Growth % -36.6% -0.9% 42.3% 23.8% 14.3%
Realizations 600 660 731 801 841 883
Growth % 10.0% 10.8% 9.5% 5.0% 5.0%
Sales 6.10 4.25 4.67 7.28 9.46 11.35
Growth % -30.3% 9.8% 55.8% 30.0% 20.0%
Total Apparel sales
Volumes 2.39 2.76 3.34 4.00 4.79 5.52
Growth % 15.5% 21.0% 19.9% 19.8% 15.3%
Realizations 606 636 690 757 793 832
Growth % 4.9% 8.6% 9.5% 5.0% 5.0%
Sales 144.66 175.28 230.24 302.54 379.68 459.22
Growth % 21.2% 31.4% 31.4% 25.5% 20.9%
Others / Addiction Sales 5.07 25.00 35.00 45.00
Growth % 392.7% 40.0% 28.6%
Total Gross Sales 144.46 175.28 235.31 327.54 414.68 504.22
Growth % 21.3% 34.2% 39.2% 26.6% 21.6%
21

ICRA Equity Research Service
Kewal Kiran Clothing Limited
Kewal Kiran Clothing Limited – P&L Estimates (Consolidated)
Rs. Crore FY10a FY11a FY12e FY13e FY14e
Net sales 175.3 235.3 313.9 397.6 483.6
Other related income 0.6 1.2 1.5 1.9 2.4
Operating Income (OI) 175.9 236.5 315.5 399.5 485.9
Growth Rate (%) 21.0% 34.4% 33.4% 26.7% 21.6%
EBITDA 48.1 68.9 80.8 100.4 119.7
Depreciation 5.8 5.9 7.0 8.6 10.6
EBIT 42.2 63.0 73.9 91.8 109.1
Interest expenses 2.3 2.1 1.2 1.4 1.4
Other income/expense 8.9 8.3 8.9 9.6 10.2
PBT (before extraordinary) 48.7 69.3 81.5 99.9 117.8
Extraordinary Gain/Loss 0.0 0.0 0.0 0.0 0.0
PAT 32.5 46.2 54.4 66.7 78.6
PAT (concern share) 32.5 46.2 54.4 66.7 78.6
No of shares 12,325,037 12,325,037 12,325,037 12,325,037 12,325,037
DPS 85.5 40.8 17.0 20.8 24.5
EPS 26.4 37.5 44.2 54.1 63.8
CEPS 31.1 42.3 49.8 61.1 72.4
Kewal Kiran Clothing Limited – Balance Sheet Estimates (Consolidated)
Rs. Crore FY10a FY11a FY12e FY13e FY14e
Net worth 175.2 197.8 227.7 264.4 307.6
Minority interest 0.0 - - - 0.0
Total Debt 15.8 5.6 8.0 8.0 8.0
Non-Operating Non Current Liability 0.0 0.0 0.0 0.0 0.0
Deferred Tax Liability (1.7) (1.6) (1.6) (1.6) (1.6)
Trade Creditors 16.0 18.2 23.0 29.4 36.0
Other Current Liabilities and Prov. 13.8 30.3 45.8 57.0 68.3
Total liabilities 219.2 250.2 302.9 357.2 418.2
Net Fixed Assets 40.0 40.6 48.6 60.0 74.4
Capital Work in Progress 2.7 2.1 2.1 2.1 2.1
Total Net Fixed Assets 42.7 42.7 50.8 62.2 76.6
Total Long-Term Investments 32.9 26.8 26.8 26.8 26.8
Cash and Bank Balances 80.2 95.3 107.1 115.3 125.2
Receivables (incl. bills discounted) 24.1 29.8 44.9 62.5 82.9
Inventories 21.8 36.8 48.4 58.8 68.3
Loans & Advances 1.4 2.0 2.7 3.4 4.1
Other Current Assets 16.0 16.7 22.3 28.2 34.3
Total Current Assets 143.5 180.7 225.3 268.1 314.8
Total Assets 219.2 250.2 302.9 357.2 418.2
22

ICRA Equity Research Service
Kewal Kiran Clothing Limited
Kewal Kiran Clothing Limited – Cash Flow Estimates (Consolidated)
Rs. Crore FY10a FY11a FY12e FY13e FY14e
OPBDIT 48.1 68.9 80.8 100.4 119.7
Less: Taxes 16.4 23.0 27.1 33.2 39.2
Changes in Net Working Capital 2.8 (0.6) (13.8) (13.0) (14.2)
Net Interest Charges (2.3) (2.1) (1.2) (1.4) (1.4)
Cash flow from operating activities 32.1 43.2 38.7 52.7 64.9
Investments (2.1) 6.1 0.0 0.0 0.0
Capital expenditures (3.0) (5.7) (15.0) (20.0) (25.0)
Cash flow from investing activities (5.1) 0.3 (15.0) (20.0) (25.0)
Equity Raised / (Buyback) 0.0 0.0 0.0 0.0 0.0
Loans Raised / (Repaid) (7.8) (10.2) 2.4 0.0 0.0
Others (Including Extra-ordinaries) 0.0 (0.1) 0.0 0.0 0.0
Dividend (4.3) (15.4) (14.3) (24.5) (30.0)
Cash Flow from Financing activities (12.1) (25.8) (11.9) (24.5) (30.0)
Cumulative cash flow 14.9 17.7 11.8 8.2 9.8
Opening Cash Balance 65.3 80.2 95.3 107.1 115.3
Closing Cash Balance 80.2 97.9 107.1 115.3 125.2
Kewal Kiran Clothing Limited – Key Financial Ratios (Consolidated)
FY10a FY11a FY12e FY13e FY14e
Growth indicators
Sales Growth 21.2% 34.2% 33.4% 26.7% 21.6%
EBITDA Growth 101.6% 43.3% 17.4% 24.2% 19.2%
EPS Growth 128.1% 42.2% 17.7% 22.5% 17.9%
Cash EPS Growth 98.8% 35.8% 17.9% 22.7% 18.5%
Profitability indicators
EBITDA Margin 27.3% 29.1% 25.6% 25.1% 24.6%
EBIT Margin 24.0% 26.7% 23.4% 23.0% 22.4%
PAT Margin 18.5% 19.6% 17.3% 16.7% 16.2%
RoE 19.9% 24.8% 25.6% 27.1% 27.5%
ROCE 28.2% 36.6% 38.1% 40.2% 40.9%
Liquidity ratios
Debtor (days) 50 46 50 55 60
Inventory (days) 90 112 105 100 95
Net working capital/Revenues 24.0% 21.6% 23.4% 24.1% 24.9%
Capitalization Ratios
Total Debt/(Equity + MI) 0.1 0.0 0.0 0.0 0.0
Interest coverage 20.6 33.4 66.2 69.7 83.1
Total Debt/EBITDA 0.3 0.1 0.1 0.1 0.1
Valuation Ratios
Price/Sales 4.9 3.6 2.7 2.2 1.8
Price/Earnings 26.5 18.7 15.9 12.9 11.0
Price/Book Value 4.9 4.4 3.8 3.3 2.8
EV/EBITDA 16.6 11.2 9.4 7.5 6.2
Price/Cash Flows 22.5 16.6 14.1 11.5 9.7
23

ICRA Equity Research Service
Kewal Kiran Clothing Limited
ICRA Limited
CORPORATE OFFICE
Building No. 8, 2nd Floor,
Tower A, DLF Cyber City, Phase II,
Gurgaon 122002
Ph: +91-124-4545300, 4545800
Fax; +91-124-4545350
REGISTERED OFFICE
1105, KKKCLash Building, 11 th Floor,
26, Kasturba Gandhi Marg,
New Delhi – 110 001
Tel: +91-11-23357940-50
Fax: +91-11-23357014
MUMBAI
Mr. L. Shivakumar
Mobile: 9821086490
3rd Floor, Electric Mansion,
Appasaheb Marathe Marg, Prabhadevi,
Mumbai - 400 025
Ph : +91-22-30470000,
24331046/53/62/74/86/87
Fax : +91-22-2433 1390
E-mKKCL: shivakumar@icraindia.com
GURGAON
Mr. Vivek Mathur
Mobile: 9871221122
Building No. 8, 2nd Floor,
Tower A, DLF Cyber City, Phase II,
Gurgaon 122002
Ph: +91-124-4545300, 4545800
Fax; +91-124-4545350
E-mKKCL: vivek@icraindia.com
CHENNAI
Mr. Jayanta Chatterjee
Mobile: 9845022459
Mr. D. Vinod
Mobile: 9940648006
5th Floor, Karumuttu Centre,
498 Anna Salai, Nandanam,
Chennai-600035.
Tel: +91-44-45964300,
24340043/9659/8080
Fax:91-44-24343663
E-mKKCL: jayantac@icraindia.com
d.vinod@icraindia.com
KOLKATA
Ms. Anuradha Ray
Mobile: 9831086462
A-10 & 11, 3rd Floor, FMC Fortuna,
234/ 3A, A.J.C. Bose Road,
Kolkata-700020.
Tel: +91-33-22876617/ 8839,
22800008, 22831411
Fax: +91-33-2287 0728
E-mKKCL: anuradha@icraindia.com
AHMEDABAD
Mr. Animesh Bhabhalia
Mobile: 9824029432
907 & 908 Sakar -II, Ellisbridge,
Ahmedabad- 380006
Tel: +91-79-26585049/2008/5494,
Fax:+91-79- 2648 4924
E-mKKCL: animesh@icraindia.com
HYDERABAD
Mr. M.S.K. Aditya
Mobile: 9963253777
301, CONCOURSE, 3rd Floor,
No. 7-1-58, Ameerpet,
Hyderabad 500 016.
Tel: +91-40-23735061, 23737251
Fax: +91-40- 2373 5152
E-mKKCL: adityamsk@icraindia.com
PUNE
Mr. Sameer Mahajan
Mobile: 9881300772
5A, 5th Floor, Symphony,
S. No. 210, CTS 3202,
Range Hills Road, Shivajinagar,
Pune-411 020
Tel : +91- 20- 25561194,
25560195/196,
Fax : +91- 20- 2553 9231
E-mKKCL: sameer.mahajan@icraindia.com
BANGALORE
Mr. Jayanta Chatterjee
Mobile: 9845022459
'The Millenia', Tower B,
Unit No. 1004, 10th Floor,
Level 2, 12-14, 1 & 2, Murphy Road,
Bangalore - 560 008
Tel: +91-80-43326400,
Fax: +91-80-43326409
E-mKKCL: jayantac@icraindia.com
www.icra.in
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