Rupa & Company Limited (NSE: RUPA) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Vikash Agarwal — Whole-time Director
Sumit Khowala — Chief Financial Officer
Analysts:
Omkar Utake — Analyst
Raj Patel — Analyst
Riddhi Shah — Analyst
Mamta Agarwal — Analyst
Rehan Laljee — Analyst
Darshan Shah — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Rupa & Company Limited Q4 and FY ’25 Earnings Conference Call hosted by MUFG. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need a session during the conference call, please signal an operator by pressing star then zero on a Dashtone phone. Please note that this conference is being recorded.
I now hand the conference over to Mr Omkar from MUFG Entime. Thank you, and over to you, sir. Thank you.
Omkar Utake — Analyst
Good afternoon, everyone. I welcome you all to the earnings conference call to discuss Q4 and FY ’25 results of Rupa; Company Limited to discuss the results we have from the management, Mr Vikash Agarwal, Whole-Time Director; and Mr Sumit Kovala, Chief Financial Officer. They will take you through the results and business performance, after which we will proceed for a question-and-answer session.
Before we proceed with the call, I would like to mention that some of the statements made in today’s call may be forward-looking in nature and may involve risks and uncertainties — uncertain cities. For small details, kindly refer to the investor presentation and other filings that can be found on the company’s website.
With this, I now hand over the call to the management for their opening remarks. Over to you, sir.
Vikash Agarwal — Whole-time Director
Thank you. Good afternoon, ladies and gentlemen. On behalf of Grupa Company Limited, I would like to warmly welcome all of you for our results con-call. We appreciate your time and interest in reviewing our company’s performance. I trust that everyone had a chance to look over the financial results and investor presentation that have been uploaded on the stock exchange.
The year was marked by stable top-line performance. We achieved growth in-quarter four and 3% value growth for the full-year, driven primarily by sales in our economy and athleisure segment. For the full-year, revenues reached INR1,239 crores and Q4 revenue stood at INR415 crores. Our EBITDA margin saw a notable improvement, benefiting our operating leverage and cost optimization efforts rising by 15% in Q4 and 11% for the full-year.
Net profit grew significantly, up 29% in-quarter four and 19% for financial year ’25. Reflecting — reflecting the scalability and efficiency of our operations. During the year, the leisure category stood out with a significant growth of 26% in volumes and this trend we expect to continue in financial ’26 as well. Modern trade saw a robust growth of 17% in ’25, taking the top-line to INR63 crores, contributing 5% to overall revenues, highlighting our strong presence across the major e-commerce platforms.
Our X Factor segment posted 11% growth, generating INR229 crores and accounting for 19% of total volumes, revenue. We anticipate continued momentum in both modern trade and X Factors areas in financial year ’26. Exports also performed well, growing by 24% to INR31 crores, representing 3% of total revenues. While our export pipeline remains healthy, we are closely monitoring geopolitical development that may impact global demand.
To enhance brand visibility, we execute — we executed targeted marketing initiatives, including endorsements. We invested INR63 crores in branding and advertising in financial year ’25, representing 5% of revenues. Financial year ’26, we plan to increase the ASR add to sales ratio by 100 to 150 basis-points. We remain committed to delivering value to all our stakeholders.
In-line with this, I am pleased to share that the Board has recommended a dividend of INR3 per equity share for financial year ’25, subject to shareholder approval. We project a revenue growth of 11% to 12% in financial year ’26, supported mainly by volumes. We also expect our EBITDA margin to be in the range of 11%, 10.5%, 11% for the coming year.
We are optimistic about achieving new milestones and introducing innovative product across diverse customer segments. Our consumer-centric centric approach will further bolster industry leadership and reinforce our. With a strong focus on long-term growth, we are excited about the opportunities ahead and remain committed to creating enduring value for all our stakeholders.
With that, I would like now to conclude my speech and would like to hand over to our CFO, Mr Sumit Kawala, to brief you about the financial performance. Over to you, Sumit.
Sumit Khowala — Chief Financial Officer
Thank you, sir, and hello, everyone, and thank you for joining us for our quarter-four and FY ’25 earnings call. I will provide a brief overview of our financial performance for the quarter. Coming to the quarterly performance, revenue from operations stood at INR415 crores, registering a growth of 4% year-on-year.
The EBITDA for the quarter stood at INR46 crores as compared to INR40 crores corresponding period last year, registering a growth of 15% year-on-year. EBITDA margin for the quarter stood at 11%, up by 90 basis-points year-on-year. The net profit for the quarter stood at INR31 crores as against INR24 crores in-quarter four FY ’24, showing a growth of 29% year-on-year.
PAT margins for the quarter stood at 7.4%, up by 130 basis-points year-on-year. Now coming to the yearly performance, revenue from operations for FY ’25 stood at INR1,239 crores, grew by 2% year-on-year. The EBITDA for the year stood at INR130 crores as compared to INR117 crores same-period last year, registering a growth of 11% year-on-year. EBITDA margin for the year stood at 10.5%, up by 90 basis-points year-on-year.
The net profit for the year stood at INR83 crores as against INR70 crores in FY ’25, which grew by 19% year-on-year. PAT margins for the year stood at 6.7%, up by 100 basis-points year-on-year. Cash generated from operations stands at INR59 crores positive, which has been majorly utilized in reducing our debt. Our net cash surplus including investments is amounting to INR24 crores. Our working capital as on FY ’25 state stand — stands at INR811 crores.
With this, I now conclude my speech and open the question-and-answer session. Thank you, everyone.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. Anyone who wishes to ask questions may press star in one on the telephone. If you wish to remove yourself from question queue, you may press star in two. Participants are requested to use handsets for asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles the first question is from the line of Raj Patel from Securities. Please go-ahead.
Raj Patel
Hello, am I audible?
Vikash Agarwal
Yes.
Raj Patel
So can you provide — can you just share what’s the capex for FY ’26?
Vikash Agarwal
There is no major capex plan. There will be routine capex of INR12 to INR15 crores for FY ’26.
Raj Patel
Okay. And from the balance sheet, we can see that the cash-and-cash equivalent balance is INR24 crores.
Vikash Agarwal
So what are your plans to use this fund? Yeah, we have a healthy cash-and-cash equivalents in our balance sheet and we are not much leveraged. So we are — we always look for both organic and inorganic opportunity — growth opportunities. And anything will be — anything which will be materialized, we’ll use this cash-and-cash equivalent to acquire this both organic and inorganic opportunities.
Raj Patel
Okay. That was all from my side. Thank you for the opportunities.
Operator
Thank you. The next question is from the line of Mamta Agarwal from ABS Investment. Please go-ahead. Oh, yes, ma’am Manta, go with the question, please. As there is no response from the participant, we’ll move to the next. Before taking the next question, a reminder to all participants, you may press char and one to ask question.
The next question is from the line of Shah from SMS Capital. Please go-ahead.
Riddhi Shah
Yeah. Hello. Am I audible?
Vikash Agarwal
Yes. Yes.
Riddhi Shah
Okay. My question is, what is the marketing expense guidance for fiscal year 2026?
Vikash Agarwal
Currently — for current year, it was 5% for FY ’26, we projected that ad expenses will be around 6%, 6.5%.
Riddhi Shah
Okay. So and my next question is what were the working capital days in FY ’25 and what are the expected working capital for FY ’26.
Vikash Agarwal
The net working capital days for FY ’25 is 231 days and we expect that to reduce by-10 20 days in FY ’26.
Riddhi Shah
Okay. Thank you.
Vikash Agarwal
Thank you. The next question is from the line of Agarwal from ABS Investment. Please go-ahead.
Mamta Agarwal
Hi, thank you for the opportunity. Sir, my first question is, are there any planned price increase for the current fiscal year?
Vikash Agarwal
Nothing at the moment, man and I will monitor the yarn prices and all at the time — for the timing, it’s stable and industry is quite competitive. So nothing for this quarter probably sharp movement in your prices
Mamta Agarwal
Okay, okay. And sir, can you throw some light on like the anticipated overall business growth trajectory like over the next two, three years?
Vikash Agarwal
So we are looking for a 10% to 12% growth every year, man, with a volume growth of anywhere between 8% to 9% for next two years at least.
Mamta Agarwal
Oh, okay, okay, great. Thank you.
Vikash Agarwal
Thank you.
Operator
Thank you. A reminder to all participants, you may press R and one to ask question. The next question is from the line of Rehan from Equitree Capital. Please go-ahead.
Rehan Laljee
Hi, good afternoon. Am I audible?
Vikash Agarwal
Yeah, good afternoon. You are audible.
Rehan Laljee
Thank you. I just had a question — first very basic question. If I look at the financial year-on a year-on-year basis, your revenue has been broadly flat 2% growth, EBITDA has grown about 11%. Your gross profit level also has been broadly flattish around the 29% mark. So can you — can you help me understand what are the cost-cutting measures the company is taking that is allowing this change of growth like — and basically I want to understand how sustainable is that cost-efficiency in what you all are doing?
Vikash Agarwal
Since we — if you see that the marketing expenses were significantly lower — I mean slightly lower than last year. Current year it was 5%, previous year it was 5.5% and there is a saving in administration cost also. And there is a slight improvement in gross margin, say 50 basis-points on a year-on-year basis. That is basically because of change of mix.
Rehan Laljee
Yeah. Okay. So you’re saying it’s mainly because of slight change in mix and the administrative because marketing will eventually come back, right, would be normalized in one other year.
Sumit Khowala
But for the coming year, we’ll be focusing more on our retail brands and all, more secondary contribution of — margin we have a higher-margin contribution. So yeah, I mean increasing 0.5% EBITDA margin every year is quite achievable.
Rehan Laljee
Okay. Secondly, sir, so you had an export unit which had started I think which had potential to generate about INR100 crores of revenue mainly for white labeling and contract manufacturing. There is another apparel player who actually bought-out a contract manufacturing unit and is doing white labeling for jockey, Victoria Secret, etc. And they are doing 15% EBITDA margins. It’s in public domain. They’re doing about 14% to 15% EBITDA margins and they have their order books full inside, they have a capacity issue. So considering that, I mean, why are we struggling on that front? We’ve been having this unit for almost two years now, 1.5 years to two years, and we’re still at that INR30 crores.
Vikash Agarwal
Yeah, I appreciate your point. So our focus is largely on exporting or doing in modern trade also our own brands. So where our margins are quite higher than 15% also. So we can always utilize this capacity doing white-label brands and all, but that will be — that’s our — that we are taking as a secondary opportunity. Primarily we want to focus on our — on our own brand — on our own in-house brands only. So yes, at the same time, we have to use capacity also. So this year probably we’ll be utilizing a fair bit of capacity.
And our modern trade is INR63 crores, export is INR31 crores. So we are using that capacity and we want to utilize it in the best possible manner where we have a higher margins of — which is what you’re making.
Rehan Laljee
Yeah, sir, just by doing contracts, you’re running a brand, right? Technically, we know that brands get higher-margin, higher realization because they built an establishment and yours is also very reputed. But they are doing only white labeling and they are generating 15% to 16% kind of EBITDAs. In your best-case also you — in your best cycle, you reached about, 14% 15%, 16% kind of normalized margins. So — and what I’m trying to ask you is that don’t you feel that considering with the opportunity you have, have, the scale you have, can we look at opportunities that — because that is in fact lesser working capital also. So your return ratios will also be better.
Vikash Agarwal
So of course, we are looking at debt opportunity also. We are focusing there as well. We are focusing there as well.
Rehan Laljee
Okay. And how can we see — like also India has recently signed a UK FTA. Are we looking to penetrate there? Are we looking because I think we are MENA region focused for our exports, if I’m not wrong. So are we looking at diversifying that and how do we get — how do we increase our opportunity on-hand?
Vikash Agarwal
Diversifying to lot of countries like Singapore, Russia and FTA, this is a new FTA. So we have team in-place, we are talking that takes little time to materialize. It’s not like we are only focusing to MENA region. We are focusing Africa and all other countries also. We are participating in different, talking to lot of people. In fact, consignment we exported to Vietnam also a small consignment to Japan also. So we are working throughout everywhere and it’s not — we are not focusing on white labeling. Our main focus is on our own brands and as well as white labeling.
So overall margin you are seeing is 10%, 11%. But if you see only for the white labeling or export, our margins are higher there. So because the base is quite small, overall it changes.
Rehan Laljee
But exactly my point, sir. I mean we need that — like over two years, we’ve not gone even to the 100% — I as per my understanding on the con-call a couple of years back, you had mentioned it was INR100 crores of revenue potential from that West Bengal unit. Now I don’t know, we’ve never reached that INR100 crore mark from it ever. We’ve been at INR30 INR60 crores.
Vikash Agarwal
So we are doing modern trade and export from that unit only. So it comes to roughly INR70 crore INR80 crores. So that’s a fair bit of coming from there.
Rehan Laljee
Okay. So modern trade is from that as well, okay. A couple of other questions. In H1, I remember your gross margins adjusted for subcontracting expense had breached the 30% mark. It was around 30% 31%. Pardon me if I’ve got the figure percent or two wrong. But what is the change in-product mix that we are seeing in H1 versus H2? Because H2 your margins have been significantly lower like in Q4, you’ve reported 26% margins, 26.5% gross. In Q3, I think you reported about 28% or 29% gross margin. So what was the change in-product mix that you’ve had because your other competitors have in fact been at the same gross level, 30% to 33% and in all quarters, usually Q4 is stronger for you guys. So your margins should technically have held. So why are we seeing that contraction in margin?
Sumit Khowala
It’s just that the quarter three means major part is basically thermal and activeware performs Well. So there was a — this margin of 29% and 20 — for quarter-four, the economy segment performs well. So the mix changes according to the seasonality. So the gross margin varies.
Rehan Laljee
Yeah, but H1 has usually a lull season for you, right? The first-half is usually on the tepid side versus H2.
Vikash Agarwal
Yeah, but in H1, you will find that the product which have a product which the sales of the product having a high-margin contributes more compared to the product which have a low-margin margins in-quarter two.
Rehan Laljee
For example?
Vikash Agarwal
For example, thermal and thermal perform — thermal sales booked in-quarter three as well as quarter two, major sales in-quarter two and then quarter three. And activewear also performs well in-quarter two. So there was a high-margin in H1 and compared to H2.
Rehan Laljee
Okay.
Sumit Khowala
Quarter two and quarter three is better.
Rehan Laljee
Yeah. But I mean, I remember on Q3 and Q2 con-call you said thermals were looking dull. So I don’t — and I’m very surprised to hear this gross levels are looking dull.
Sumit Khowala
Thermal didn’t do very well for us, but whatever it did, the margins are better there compared to innovative.
Rehan Laljee
Understood. And my last question, I remember our target for FY ’25 going-forward was that you will achieve — try to achieve 11% to 12% and upward percent of revenue in the women’s wear, like a percent of revenue in the women’s wear would be about 11% to 12%. It’s gone down to about 10% there are industry reports where on the demand-side or broad-based market demand that women have been shopping more than men consumers and this is public information again. And they have been shopping at a higher CAGR of 12% to 15%. Now why are we seeing that degrowth or is the pie and because the pie is broadly same on a 2% growth, the pie has not really changed, but the women’s wear has contracted by 1%. So can you explain what was.
Vikash Agarwal
We understand that and we acknowledge we are lacking there. So what we are doing, we are shifting our production base which was earlier Dipur to Calcutta where we have a better control and we have built-up a strong team and building up a strong portfolio. So this is this one particular area we as a management also feel and we are not doing an up-to-mark. And of course, in coming time in coming year, probably we expect to see much better results.
Rehan Laljee
Okay. Thank you so much.
Vikash Agarwal
Thank you.
Operator
Thank you. A reminder to all participants, you may press star in one to ask question. The next question is from the line of Darshan Shah from MNM Associates. Please go-ahead.
Darshan Shah
Hello.
Vikash Agarwal
Please.
Darshan Shah
Hi, sir. Am I audible?
Vikash Agarwal
Yeah.
Darshan Shah
Yeah. Hi, sir. A couple of questions from my end. First on the industry part. You mentioned in your presentation, it’s nice to see that you have brands across the premium, mid-premium economy segment. So I just wanted to understand between the men’s and, what is the price point that you consider as the demarcations for all of these segments? And where does the bulk of the revenue value lie in terms of is economy the biggest segment or are you seeing people move towards mid-premium, premium segment? So you just can highlight on the industry part of your positioning in terms of pricing and what would the future trends look like? That would be my first question.
Vikash Agarwal
So economy, we consider around INR70 to INR80. Anything above INR82 till say INR150 we take as a mid-premium and above INR150 is premium to us is what we consider for. And in terms of opportunity, we see enough opportunity across all three segments. Of course, economy and mid-premium is a larger base for us. Premium is a very small base. So in terms of business, we see a potential across all three segments. And we are focusing across three segments as well.
Darshan Shah
Okay. And then would I be correct in assuming that your — obviously margins would be higher amongst the premium mid-premium segments or do you have to do more of an advertising spend to build-on brand-building and that’s why margin across all three segments would be somewhere around the similar line.
Vikash Agarwal
Yeah, but we have to do for the economy brand also because the base is bigger there. So we have to work across all the three segments to do some advertisement, a basic advertisement in economy as well. But that activity is for all across all three segments.
Darshan Shah
Yeah. So margins across all three segments, which one would be your highest-margin on the premium it even the reason why if I feel that there is a secular trend within the economy on consumption and people moving to branded products, then you may also stand to benefit from a — you know, your underlying the customers moving to a higher segment itself. So margins may tend to improve over a period of time. That is where I was coming from.
Vikash Agarwal
I absolutely agree, but India is a huge market and people moving from one segment to another, there is enough for the population in each segment anyway, where the market is still huge, which we need to capture. So people — so the way economy is growing, of course, people will move from economy to mid-premium, premium to premium, but still each category is huge enough where still we are quite small in terms of percentage share.
Darshan Shah
Got it, sir. My second question to the CFO around the working capital day. So if you could, I anticipate you have around 9,000 SKUs and sometimes what we’ve noticed is that if there are companies with lesser products with much more SKUs, inventory management tends to become a kind of an issue. So if you can just highlight what your working capital days are for your debtors and inventory days and also what are the steps that you’ve taken to kind of manage the inventory?
Sumit Khowala
So the inventory days for the FY ’25 is 128 days. Data is 147 days and creditor days is 44 days. So net working capital days comes to around 231 days. And we are taking necessary steps and means we are onboarding our dealers to the channel financing program to reduce our debtors. We are also using SAP applications to means forecasting the demand and produce that much of inventory, which would require to be sufficient to cater the market. These are the major steps.
Darshan Shah
And because Q4 tends to be your best quarter, is there a seasonal trend in terms of Q3, you would stock up the inventories and by the end of Q4, the inventory number that I see on the balance sheet that spending goes down during Q1 and Q2 and then that cycle starts again. Is this also something that you do?
Sumit Khowala
So like if you see the inventory numbers as on December ’24, it’s INR527 crores. And if you see the March, it’s INR447 crores. So it’s significantly because 4th-quarter is basically more of festive seasons and there were incentive target given to the dealers as well as our salesmen. So 4th-quarter is due to seasonality as-is due to festive seasons and then it is bulky.
Darshan Shah
You tend to stock up their inventory in Q3 because you have a lot of demand coming in that you have to fulsale for Q4.
Sumit Khowala
Well, beginning of summer, so summer is the peak season for us, so not.
Darshan Shah
Got it, sir. And sir, one last thing on — I will — I’ve joined the call-in late, so my apologies if I’ve missed it. My question is on the Bangladesh situation currently because there is an announcement from both the sides. We’ve also recently-announced the blocking of certain exports and we’ve also given us limited access to land ports. Bangladesh have seen in PPT is again one of the key export areas. So I just wanted to check-in what is the revenue that comes from Bangladesh and what do you — so how are we affected in shop?
Vikash Agarwal
So we are not affected and there is no revenue for us coming from Bangladesh, but whatever is happening in Bangladesh, we see it as opportunity, both in terms of export from India to other countries. And domestically, we see demand coming up because lot of manufacturers from India do take sourced lot of goods from Bangladesh for local consumption. So that demand should also come to India, both in terms of production and consumption.
Darshan Shah
You’ve been very generous, sir. I have one final question. Because your plans on growth, especially your EBI outlet tripling it in the next two, three years, they seem very ambitious. So just wanted to check-in, how would you like to propose to go about it? Is it a COFO model, Coco model, model? And what are the geographies because you are very east heavy. Is this something that is going to continue or are we going to — the new EBOs that are coming in will be other than East of India and see if over a period of time, we see a more homogenized sales mix.
Vikash Agarwal
So honestly, we have around 33 EBOs now, but with — and with just 33 EBOs, we are yet to correct a very scalable model as of now. So we are in search of a senior EBO head, probably we have located him and he’ll be joining soon. So — and as of now, we are focusing more on FOFU model, which can be scaled-up. But we are looking for some senior team who can actually help us to reach our target of 100 stores . So there is a slight delay in that plan with just 33 stores now because you need to have a strong team to scale it up in a very viable mood.
Darshan Shah
Got it. And geography, what are the targeting or then that planning happens once your team is onboarded?
Vikash Agarwal
So largely we are focusing more on East views and all, but once — anybody joins to have 100 stores, we’ll be focusing more on east and West primarily to start.
Darshan Shah
Okay. That’s all from my end. This is been very helpful. Thank you so much.
Vikash Agarwal
Thank you so much.
Operator
Thank you. A reminder to all participants, you may press R and one to ask question as there are no further questions from the participants, I now hand the conference over to Mr Omkar for closing comments. Over to you, sir.
Omkar Utake
Thank you. Thank you for joining us on the call today. I would like to thank the management for sparing the time and answering all the queries today. We are from In-Time Investor Relations Advisors for Rupa; Company Limited. For any queries, please feel free-to contact us. Thank you, everyone, and have a great day.
Vikash Agarwal
Thank you. Thank you. Thank you so much for your time.
Operator
Thank you. On behalf of Rupa; Company Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you