Kewal Kiran Clothing Ltd (KEWKIR) - ICICI Direct

Exhibit 2: Assumption Sheet
Particulars FY11 FY12 FY13E FY14E
Volumes (Lakh pieces) 33.6 37.6 45.2 51.5
Average realisation per piece (|) 685 750 770 800
Average cost of woven fabric (|/metre) 125 170 175 180
Average cost of knitted fabric (|/kg) 349 493 508 522
Selling expenses as a % of sales (%) 11.1 11.0 12.0 11.5
Source: Company, ICICIdirect.com Research
Q1FY13 Result Highlights
• KKCL’s Q1FY13 sales de-grew 18.1% to | 56.4 crore. This degrowth
was led by a dampened demand situation, which led to
volume de-growth of 16.9% YoY to 6.85 lakh pieces (I-direct
estimate: 7 lakh pieces). Realisation improved 2.3% YoY to | 774
per piece
• Operationally also, the performance was disappointing. The
company reported an operating margin of 16.7% (down 820 bps
YoY), lower than our estimate of 20.5%. Operating margins were
dented due to higher employee costs and also higher promotional
expenses incurred by the company
• Consequently, PAT de-grew 42.3% YoY to | 7.3 crore, lower than
our estimate of | 8.5 crore
KKCL reported de-growth (18.1% YoY) in sales for the first
time in over 12 quarters
Exhibit 3: Topline growth trajectory
| crore
500
450
400
350
300
250
200
150
100
50
-
45.1
72.5 63.0 54.7 68.9
100.4
64.2 66.7 56.4
363.9
435.3
Q1FY11
Q2FY11
Q3FY11
Q4FY11
Q1FY12
Q2FY12
Q3FY12
Q4FY12
Q1FY13
FY13E
FY14E
Source: Company, ICICIdirect.com Research
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