Kewal Kiran Clothing Ltd

A YEAR OF STRATEGIC TRANSFORMATION AND GROWTH

Our comprehensive brand portfolio and new initiatives have shown promising success within the Indian fashion industry, supported by the inherent strength of our balance sheet.

Past year has been a testament to our resilience and strategic acumen. Despite facing muted consumer demand and challenging market conditions, we have demonstrated robust financial achievements and positive sales growth. Our strategic initiatives have not only fortified our strong position in the branded apparel and lifestyle segment but have also showcased our commitment to sustained excellence. We are proud of our ability to navigate these complexities and emerge stronger, reaffirming our leadership in the industry.

In FY24, India's economic landscape surged, achieving an extraordinary 8.2% growth, outpacing all other major economies globally. The Reserve Bank remains confident, projecting a steady 7.2% GDP growth for FY25. The Government of India has unveiled pivotal initiatives to further energize the economy and enhance self-reliance. As a result, India's GDP growth trajectory is set to strengthen, reflecting enhanced macroeconomic stability. By 2027, India is anticipated to overtake Japan and Germany, securing its position as the significant boost, world's third-largest economy. This economic dynamism has significant implications for the Indian fashion industry. The increased disposable income and burgeoning consumer confidence are driving demand for branded apparel and lifestyle products.

The fashion sector is poised to benefit from the government's initiatives, which nurtures innovation, self-reliance, and sustainability. In the Union Budget 2024-25, the allocation for the textiles sector with a year- hasseena on-year rise of 974 crore, bringing the total to 4,417.09 crore.

As consumers become more brand-conscious, the Indian fashion industry stands on the cusp of unprecedented growth and transformation, ready to set new benchmarks.

The youth of today are increasingly embracing fast fashion, drawn by its trendy, affordable, and ever-changing collections that allow them to express their individuality. Social media platforms and influencers play a pivotal role in shaping their fashion choices, making it easier than ever to stay up to date with the latest styles. This rapid cycle of new trends resonates with the younger generation's desire for instant gratification and their inclination towards frequent wardrobe updates. As a result, fast fashion has become the way forward, catering to the dynamic preferences of the youth and driving a shift in the fashion industry towards more responsive and accessible fashion solutions. We are adeptly navigating the fast fashion landscape through our comprehensive in-house capabilities that span designing, manufacturing, branding, and retailing. By integrating these functions, we ensure a seamless and agile response to emerging trends and consumer preferences.

In FY24, KKCL has delivered a stellar financial performance, marked by double-digit sales growth and a robust margin profile. Revenue surged by 10.4% to 860.5 crore, driven by increased volumes across many product categories, including denims, shirts, t-shirts and accessories. EBITDA followed suit with a remarkable 16.6% increase, reaching 177.2 crore, and the EBITDA margin improved to 20.6%. PAT soared by an impressive 29.5%, hitting 154.5 crore, with the PAT margin climbing to 17.2%.

KKCL has successfully transformed from a denim-centric brand into a prominent lifestyle brand by widening our product portfolio across topwear, bottomwear and accessories capitalsing on our brand strengths. The introduction of ‘Junior Killer', a dedicated kidswear brand coupled with the acquisition of 50% stake in Kraus Casuals Private Limited—operating under the Kraus Jeans brand further solidifies our position in the women casual wear segment, exemplifies our commitment to creating a comprehensive fashion portfolio gender and age. These milestones not only reflect our evolution into a complete casual wear brand serving across age and gender but also leverage our existing distribution network to capture a larger market share and enhance our reach across diverse consumer segments.

At the core of our business philosophy is our commitment to Environmental, Social, and Governance (ESG) principles, which aligns seamlessly with our belief in the three key ‘S' of the business Sustainability, Stability, and Scalability. We are dedicated to sustainable practices that minimise our environmental impact, from responsibly sourcing materials to optimising our manufacturing processes for energy efficiency.

Stability is maintained through sound governance practices, ensuring that our operations are transparent, ethical, and accountable to all stakeholders.

Scalability, the third pillar, is reflected in our strategic growth initiatives that are designed to adapt and expand while maintaining our core values. Together, these principles guide our efforts to create long-term value for our shareholders and contribute positively to society and the environment.

In FY24, we made significant strides in expanding our distribution network, showcasing our strength in the industry. We added 104 new EBOs, and increased our overall EBO count to 488 as of March 31, 2024. With 59 more stores currently under development, our commitment to growth is evident. This strategic expansion not only enhances our market presence but also solidifies players in the business, ensuring that our brands reach and resonate with an even broader audience.

Read More on Page 16 Our integration of Kraus Casuals and our focus on the kidswear segment, including the strength of our established menswear focused brands, are expected to drive robust growth.

Looking ahead, we are optimistic about our growth trajectory and remain committed to our mantra of consistent, profitable expansion. Our integration of Kraus Casuals and our focus on the kidswear segment, including the strength of our established menswear focused brands, are expected to drive strong growth. On the distribution front, we will continue to add exclusive brand-focused EBOs, with plans to open 50 to 70 new stores in FY25 to enhance brand visibility and goodwill. We are also set to invest over 35 crore to boost our manufacturing capacity, aiming to increase production to 10 million units annually by expanding our facilities in Vapi and Daman. Our in-house manufacturing setup will be optimized for real-time responsiveness and market proximity. Our product strategy will emphasise expanding categories and leveraging our design and merchandising expertise to deliver innovative and differentiated offerings. our position as one of the top To conclude, I want to extend my heartfelt gratitude to all our stakeholders for their continued trust and support in our Company. As we continue this journey together, I am eager to build on our successes and look forward to your ongoing partnership and encouragement.