Started in 1981, Khadim India Limited is Kolkata based second largest footwear retailer in India. Company operates exclusive retail stores under the 'Khadims' brand with major presence in East India. Khadim India operates through two business verticals, retail and distribution. The retail business operates through its exclusive retail stores catering to middle and upper middle income consumers in large cities. Company has over 829 'Khadims' branded exclusive retail stores. Out of this, 167 are company owned and operated stores and remaining are franchisee operated stores. Company's retail business constitutes over 70% of its net revenue. Over 85% of products sold through its retail stores are manufactured by outsourced vendors. KIL provides affordable fashion across various price points for the entire family, supported by strong design capabilities that have helped company create and grow sub-brands leading to premiumisation. The distribution business operates through a wide network of distributors catering to lower and middle income consumers. Company have a network of 357 distributors. The distribution business constituted over 20% of its net revenue. A large portion products sold through distributors are manufactured by the company at its own manufacturing facilities and through contract manufacturing facilities. Company have two owned manufacturing facilities and two outsourced manufacturing facilities. 1,79,65,198 15.81947496487375 On performance front, KIL has posted turnover/net profits of Rs. 425.72 cr. / Rs. 8.92 cr. (FY13), Rs. 483.05 cr. / Rs. 12.15 cr. (FY14), Rs. 465.70 cr. / Rs. -(18.66) cr. (FY15), Rs. 538.83 cr. / Rs. 25.24 cr. (FY16) and Rs. 625.55 cr. / Rs. 30.76 cr. (FY17). For three months ended on 30.06.17 of the current fiscal, it has reported net profit of Rs. 7.11 cr. on a turnover of Rs. 179.76 cr. Thus company has posted healthy growth over last couple of years on consistent basis except set back in FY15. KIL has posted an average EPS of Rs. 11.96 and average RoNW of 11.35% for last three fiscals. Issue is priced at a P/BV of 6.75 and if we attribute latest earnings on fully diluted equity post issue, then asking price is at a P/E of around 47.41. As per DRHP industry average P/E is around 59.47. So issue looks reasonably priced. As per financials, company's growth is good, RoNW is 11.35% for last three fiscals and issue is priced at P/E of around 47.41. Company has bright prospects ahead as India's footwear business is expected to grow at a CAGR of 15% by 2020 as population and income growth will continue. With GST implementation, organized footwear segment is expected to grow with faster speed. So we give SUBSCRIBE rating to this IPO.
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