RUPA - RUPA & COMPANY LIMITED Share Price

The management of Rupa & Company outlined a cautiously optimistic outlook, targeting Q4 FY25 revenue growth of 8"“10% driven by volume increases and improved operational efficiency. They anticipate FY25 EBITDA margins of 10"“11%, with long-term revenue growth guidance of 12"“15% annually and EBITDA margins improving to 11"“12% over the next two years. Key focus areas include expanding the economy and athleisure segments (which grew 8% and 18%, respectively, in 9M FY25), scaling modern trade (26% growth, contributing 6% to revenue), and boosting exports (11% growth in 9M FY25).

Strategically, the company plans to enhance retail presence by adding 12"“15 exclusive brand outlets (EBOs) in Q4 (35 currently) under a franchisee-driven FOFO model. New segments like rainwear and kidswear are being introduced, supported by a capex of INR15"“20 crores. Cost optimization and debt reduction remain priorities, with a cash surplus of INR30 crores achieved in 9M FY25.

Challenges include subdued winter demand impacting thermal wear growth (20% in Q3 vs. 30"“40% expectations) and macroeconomic pressures. Management emphasized leveraging newly appointed leadership (national sales head) to strengthen sales alignment, improve premium segment penetration, and reduce inventory days from 145 to 100. Collaborations with quick-commerce platforms (Swiggy, Zepto) and investments in branding (5.6% of revenue) aim to bolster visibility and market share.

Question 1: "I was referring to your presentation. On Slide 33, we see that we have a presence in quick commerce space with Zepto, Blinkit, and Swiggy Instamart. So are we planning to onboard more players in that sense?"
Answer: The company confirmed recent partnerships with Swiggy, Zepto, and Blinkit and plans to enroll additional quick commerce platforms to strengthen regional market penetration.

Question 2: "Sir, another question was with respect to the Pragati scheme. So last quarter end, you talked about it was operational in Rajasthan. So is there any further progress, any further States that you have added in that Scheme?"
Answer: The Pragati scheme is expanding to more towns and cities in Rajasthan, with plans to implement it statewide within a year.

Question 3: "I just wanted to know what will be the advertisement spend for FY '24-25 and for Q4 as well?"
Answer: Advertisement spend for FY '24-25 is projected at 6"“7% of revenue, with Q4 spending also around 6%.

Question 4: "How has been the traction in the women wear segment in this quarter? What marketing initiatives have been taken?"
Answer: The women's segment is under development, with a focus on affordable products and a restructured sales team. A new national sales head aims to enhance productivity and category focus.

Question 5: "What are our capex plans for the remaining FY '25? Any plans to venture into new segments?"
Answer: Capex for FY '25 is INR 15"“20 crores. New segments include rainwear (coats/suits) and expanded kids' wear offerings.

Question 6: "What is the EBITDA guidance for FY '24-25 and Q4?"
Answer: FY '24-25 EBITDA guidance is 10"“11%, with Q4 also expected within this range.

Question 7: "How many stores are planned for Q4, and what is the cost per store?"
Answer: 12"“15 stores will open in Q4 under the FOFO model, with franchisees bearing costs (~INR 10"“12 lakhs/store).

Question 8: "What are the demand trends in mass vs. premium segments for FY '25?"
Answer: Premium segment growth is expected to accelerate in Q4 due to stable raw material prices and higher-margin product focus.

Question 9: "What is the revenue and EBITDA growth guidance for the next two years?"
Answer: Revenue is projected to grow 12"“15% annually, with EBITDA margins improving to 11"“12% over the next two years.

Question 10: "Why are gross margins lower than competitors'?"
Answer: Higher economy-segment sales diluted margins. Mid-premium and premium segments are prioritized for future margin expansion (1"“2% improvement expected).

Question 11: "What is the revenue contribution from online platforms?"
Answer: Modern trade (including e-commerce) contributes 6% of revenue, growing 26% YoY for 9M FY '25.

Question 12: "Can EBITDA margins reach historical levels (18"“20%)?"
Answer: Margins depend on yarn prices; a surge to INR 470"“480/kg (vs. current INR 265"“270) could restore 17"“18% EBITDA.

Question 13: "What is the plan for EBOs and inventory days?"
Answer: EBOs focus on outerwear/women's wear, targeting 100+ stores by FY '26. Inventory days aim to reduce from 145 to 100 within 1"“2 years.

Question 14: "Plans for modern retail expansion?"
Answer: Partnerships with large-format stores (DMart, Reliance) prioritized, especially in South India.