Rupa & Company Ltd., incorporated in the year 1985, is a Small Cap company (having a market cap of Rs 3618.37 Crore) operating in Apparels sector.
Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 457.24 Crore, up 31.66 % from last quarter Total Income of Rs 347.30 Crore and up 152.53 % from last year same quarter Total Income of Rs 181.06 Crore. Company reported net profit after tax of Rs 65.90 Crore in latest quarter.
Investment Rationale
The Indian innerwear industry is expected to grow at 11% CAGR from ~Rs 39000 crore in FY20 to Rs 89,700 crore in FY28 with current share of organised players at ~ 40%. With increasing aspiration of customers and extended reach of branded players, share of organised players is expected to grow at a faster pace. Companies like Rupa that have a presence across price points can benefit from consumers shifting from unorganised to organised and register sustained double digit revenue growth. The company has seen a significant improvement in profitability profile and augmentation of RoCE to ~25%+ warranting a re-rating in valuation multiple. The brokerage expects revenue, earnings CAGR of 14%, 9%, respectively, in FY21-23E. Owing to its strong performance and improved industry outlook, the brokerage revises rating from REDUCE to BUY with a target price of Rs 575 (22.0x FY23E earnings).
(Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.)
