If we are supposed to describe this Annual Report in three letters it would be – Conviction,
Endeavour, and Dedication. A conviction that the domestic economy is going to
achieve new heights as it enters its "Amrit Kaal" period. Various endeavours
by the Central Government to make the country achieve a 5 trillion-dollar economy by
2026-27 and various initiatives for job creation have ensured that the relatively young
population of the country have the highest disposable income ever.
A dedication by the management so that our brand "Rupa" reaches every
corner of the country.
As a corporation with over five decades of experience in the innerwear sector, our
courage, conviction, and dedication maintains our confidence in sustaining our goals for
continual value creation and turning the tide in our favor with a positive transformation
"I'm Possible" for a variety of reasons.
The first good reason is Brand "Bharat"
According to the ‘International Monetary Fund' (IMF), India is anticipated to grow
by 5.9% in FY 2023–24 and by an average rate of 6.1% over the next five years. During
the recently concluded Budget, the ‘effective capital expenditure' by the Central
Government is estimated to be around Rs. 13.7 lakh crore (4.5% of GDP) for FY 2023-24. It
is apparent that India's large young population, along with an increasing number of
upper-middle-income individuals possessing an appetite for spending, points to a future of
consumption-driven prosperity. However, it is commonly assumed that investment will give
India the required momentum to embark on a long-term path of sustainable domestic
demand-led growth. Despite uncertainty, growth drivers have sustained a clear upward
momentum, as demonstrated by high-frequency statistics such as GST collections, daily
average gasoline consumption, vehicle sales, credit growth in various sectors and
industries, and Purchasing Managers' Indexes (PMIs).
The second strong reason is the ever-changing Indian consumer, which Rupa caters to
The Indian consumer is rapidly evolving. Today, customers can purchase innerwear from
local shops to high end stores at malls, as well as via e-commerce websites in a matter of
a few clicks. The variety of designs, fabrics, cuts, colors, and styles available for
every body type and need is astounding. This raises the question—what is driving the
rapid evolution of India's men and women innerwear market?
Social media exposure, increased fashion awareness, demand for different kinds of
innerwear, and an understanding of health and hygiene are driving unprecedented growth in
the innerwear market. Add to the mix, our country's expanding disposable income, an
increase in female spenders, desire for branded luxury innerwear, and the expansion of the
retail sector are factors for the sector's growth.
We, at Rupa, consistently raise the bar of consumer satisfaction by introducing fresh
assortments in each sub-brand. Our products are infused with the latest fabric
innovations, cutting-edge production techniques, and advanced design features to provide
top-of-the-line style and comfort. We spare no effort in ensuring that our end-users
relish the ultimate exquisite experience.
Social media exposure, increased fashion awareness, demand for different kinds of
innerwear, and an understanding of health and hygiene are driving unprecedented growth in
the innerwear market.
The third motivation is how we are embracing opportunities amidst challenges and are
sustaining growth
FY 2022-23 has been nothing short of an extraordinary year for the innerwear business.
Seldom does one come across such contrasting scenarios as the sector witnessed this year.
On one hand, the market sentiments were high, and consumers were upbeat on retail
spending, resulting in a strong demand for products. On the other hand, the sharp spike in
input prices at the beginning of the year, followed by a subsequent decline by more than
30%, had put pressure on margins pulling down this euphoria. The situation demanded that
some tough and wise judgments be made. Rupa has always chosen to shine in the lives of
consumers and stakeholders regardless of the circumstances. Our primary focus was on
execution to guarantee that our items remained available while also implementing many
inward-looking cost-cutting strategies and expanding our distribution network.
We, at Rupa, consistently raise the bar of consumer satisfaction by introducing fresh
assortments in each sub-brand.
Despite the problems of increased costs in FY 2022-23, our revenue was Rs. 1,143
crores, a 23% decrease year on year. The gross margin was 28.6%, down from 34.8% in the
previous year. EBITDA for the year was Rs. 89 crores, with an EBITDA margin of 7.8%. The
profit after tax was Rs. 54 crores, with a profit margin of 4.7%. A variety of factors
have affected sales, resulting in de-growth across key indicators. However, due to our
efficient financial management, we have been able to drastically reduce our net debt and
free up working capital. Net debt for FY 2022-23 was Rs.134 crores, down from Rs. 231
crores in the previous year. Net working capital deployed in the Company decreased to
Rs. 789 crores in FY 2022-23 from Rs. 910 crores. This year, we have greatly improved
our cash flow operations, going from a net outflow of Rs. 116 crores to a positive cash
inflow of Rs. 185 crores. CRISIL has assigned us a credit rating of CRISIL AA-/Stable for
long-term borrowings and CRISIL A1+ for short-term borrowings of the Company.
The management is glad to recommend a 300% dividend. Looking ahead, we expect margins
to increase in FY 2023-24 as market sentiment normalizes and the effects of
underperforming areas fade. We remain committed to improving our operating efficiency,
controlling costs, and capitalizing on growth prospects to increase shareholder value.
The fourth good reason is our Phygital strategy
Rupa enjoys a large presence in East India and has expanded towards the North, followed
by West India. We are expanding our reach in South India and have plans to expand and
increase our market share in the future. The company's network now includes more than
1,500 dealers, 1.50 lakh retail locations, and 28 Exclusive Branded Outlets (EBOs).
Rupa's strategy is to penetrate new markets by employing new distributors and
assembling professional teams, as well as to expand in existing regions and make inroads
into unexplored South Indian markets. We have a diverse product portfolio, which allows us
to develop product offerings to meet the diverse consumer tastes of the respective states.
We are expanding collaborations with retail chains and e-commerce businesses in order to
boost product reach and relevance to both urban and semi-urban populations, particularly
millennials. Our products are sold in over 1400 modern retail format stores, including
Reliance, Metro, D-Mart, Spencers, More, Stylebazar, Pothy's, Lulu, Jaychandra, and
others. We are available on Amazon, Flipkart, JioMart, Myntra, Tata Cliq, and other
e-commerce platforms. We can also be reached through our Rupa Online store.
As a result, we have combined our physical and digital storefronts using the Phygital
(Physical-digital) strategy. Thus, the combination of both ecommerce and brick-and-mortar
business components has assisted us in improving the customer experience and increasing
sales revenue.
Rupa has always chosen to shine in the lives of consumers and stakeholders regardless
of the circumstances.
The fifth positive factor is our focus on brand building
Over time, we have increased our market share through concentrated brand building,
celebrity endorsements, smart pricing, and product superiority, resulting in a compelling
volume-play business for our Company. ‘Macroman M-series' Premium Innerwear and
Athleisurewear are endorsed by the famous celebrity and movie icon of South India - Naveen
Kumar Gowda aka Yash; ‘Euro' brand of innerwear products is endorsed by famous
Bollywood actor Kartik Aaryan; ‘Jon' our mass selling brand is endorsed by famous
Bollywood star Ranbir Kapoor as well as famous Bhojpuri cinema actor Khesari Lal Yadav;
‘Rupa Frontline' Innerwear and ‘Rupa Torrido' are endorsed by famous celebrity
and Bollywood star Ranveer Singh; and Rupa Softline Leggings is endorsed by famous
celebrity and Bollywood actress Kiara Advani. During the year, we have spent around 7-8%
of our revenue on various marketing activities.
The sixth solid reason is our expanding international presence
At Rupa, we recognized the need to revamp our international approach a few years ago,
in order to improve efficacy and we are glad to report that these varied strategies have
begun to bear fruit. Despite geopolitical obstacles, the Company's overseas operations
grew by 25% during the fiscal year under review. As a result, the total international
business today inspires great confidence in charting a sustainable and profitable growth
trajectory in the medium to long term.
The seventh compelling reason is our commitment to sustainability
Our Company's ethos embodies a dedication to sustainability, which we believe will
strengthen our leadership in excellence, agility, and innovation, generating value for all
stakeholders along the way. Our sustainability agenda is built around core themes such as
responsible resource usage, climate change, circular economy, sustainable supply chain,
product responsibility, and
community development.
Businesses have a crucial role to play in society and are expected to drive positive
change. Brands carry a significant responsibility in this regard. It is evident that
consumers today prefer brands that prioritize a relevant purpose. Similarly, millennials
seek employment in organizations that make sustainable decisions, and investors around the
world are increasingly supporting companies that perform on all three fronts: people,
planets, and profits. We firmly believe that to enhance productivity, engagement, and job
satisfaction among the workforce of tomorrow, it is essential to adopt value-based
transformational goals as a catalyst. In line with this, our focus is on creating
sustainable operations, supported by empowered people and good governance which will help
us build and grow our business seamlessly and deliver on our commitments towards our
stakeholders.
The eighth reason is more than just a good cause; it is our appreciation for the
stakeholders
We thank all our stakeholders for their trust and support. We would also like to thank
all the esteemed Board Members who bring in their respective expertise to drive this
organisation forward. We are well-positioned in the
Over time, we have increased our market share through concentrated
brandbuilding,celebrityendorsements, smart pricing, and product superiority, resulting in
a compelling volume-play business for our Company.
industry, with a strong portfolio, extensive distribution network, and with our
stakeholders support. We will continue to harness these to scale our business and maximize
value for all, while also moving the country closer to self-sufficiency.
With best regards,
Prahlad Rai Agarwala, Chairman
Ghanshyam Prasad Agarwala, Vice-Chairman Kunj Bihari Agarwal, Managing
Director