The hosiery manufacturer reported good results during the June quarter as both its sales and net profit increased helped by lower commodity prices and better control over raw material costs
Rupa & Co, manufacturers of hosiery garments and apparels, reported a 25% jump in its first quarter net profit on robust sales and sustained cost control.
For the quarter to end-June, Rupa & Co said, its net profit rose to Rs25.02 crore from Rs10.7 crore while its total sales grew 11% to Rs190.9 crore from Rs172.6 crore, same period last year.
According to Moneylife analysis, the company has not recorded a single quarter of negative sales growth over the last five quarters. The average net sales year-on-year growth stood at 15% while the company reported 11% growth during the June 2013 quarter. The company’s operating profit grew at 25% to Rs27.06 crore, which is less than its three-quarter growth average of 48%. Nevertheless, Rupa & Co is quoting at 12.12 times operating profit, which is slightly expensive. Its return on equity is an impressive 34%.
The company plans to establish its presence vis-a-vis multi-brand outlets and large retail formats. According to the company, the men’s innerwear market is expected to grow strongly at 17.3% CAGR, between 2010 and 2015 while the women’s lingerie market is expected to grow at 14.8% CAGR.
Moneylife had earlier carried a cover story featuring Rupa & Co as one of the market-beating mid-cap stocks. The story can be accessed here: Market-Beating: Mid-Caps
At time of writing this piece, the share price of the company is trading at Rs170 on the Bombay Stock Exchange, while the BSE Sensex is down 175 points, at 19,417.
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