Kewal Kiran targets 22-25 percent growth this fiscal

Kewal Kiran Clothing is aiming for 22-25 percent growth this year, with signs of economic recovery boosting the overall retail

segment. The company is aiming to achieve Rs 1,000 crores topline in three to five years with an investment of around Rs 350-400 crores.

Last year, the Kewal Kiran’s margins improved by around 100 basis points and it reported 21 percent rise in revenues. Recently, Crisil Research, in its report on Kewal Kiran Clothing increased its fair value estimate to Rs 1,004 from Rs 915 for the company, with a valuation grade of 1/5. Kewal Kiran Clothing's fourth quarter revenues and earnings were marginally above Crilsil Research's estimates. Revenues grew 15.6 percent year-on-year to Rs 892 million driven by volume and realisations. However, owing to higher raw material cost as a percentage of sales, EBITDA margin contracted 251 bps year-on-year.

Despite weak demand, Kewal Kiran's apparel volumes increased 8.4 percent year-on-year during Q4FY14. Average realisation per garment grew 4.3 percent. Kewal Kiran's balance sheet continues to be healthy with low gearing. Earnings estimates remained unchanged with fair value increased to Rs 1,004.