Kewal Kiran targets Rs 1,000 cr by ’16

Kewal Kiran the well known apparel maker best known for

their brands Killer and Lawman jeans, has set a target of Rs 1,000 crores by March 2016. This optimism is boosted by strong sales in the apparel and expansion of accessories business. CFO Shantilal Kothari says the company expects a revenue growth of at least 25 per cent in the current fiscal. In fact, the company has surprised industry watchers with its Q4 results turning out to be beyond expectations. This includes results on all fronts, including revenues, margins as well as earnings. The profit-after-tax for the quarter ended March 31, 2011 stood at Rs 111 million, much higher than its expected Rs 75 million. The operating margin increased by 29.2 per cent. On a year-on-year basis too, the operating margin increased by 1.4 per cent. The company’s income from operations stood at Rs 550 million, a little more than the expected Rs 510 million.

Meanwhile, in FY11, the company reported sales of Rs 236.6 crores. It now plans to focus on expanding its apparel business into premium categories. Hence, the Mumbai-based clothing company has tied up with fashion designer Narendra Kumar to sell co-branded jeans in the range of Rs 4,000-5,000. It’s also betting big on accessories such as shoes, watches and personal care products. As of now, accessories account for just 2-3 per cent total sales, but it hopes to add Rs 200 crores from accessories sales in the next four years. Currently, it sells its accessories from apparel stores, but it plans to expand its distribution to other avenues like shopping malls and other outlets. And to cushion its plans, it has already opened five stores called Addiction for its accessories retail foray.

Kewal Kiran owns 192 apparel stores called the K-Lounge. And in the current fiscal, it plans to add another 50 new stores. The focus will be on small towns to expand retail footprint. The company expects to have a capital outlay of Rs 250 crores over the next four years. Out of this, Rs 150 crores will be used for expanding their manufacturing facilities, retail outlets and IT infrastructure among other things. The capex will be funded by internal accruals.