In today’s fast-paced investment environment, discovering a multi-bagger company that can produce spectacular returns in a short period is every investor’s goal. Kewal Kiran Clothing investors’ aspirations came true when the company’s shares returned a spectacular amount of money.

Three years ago, the shares were priced at ₹170 each. Today, they trade for ₹677, a 270% increase over their previous price. If an investor put ₹1 lakh in the shares at the time and remained invested till today, their wealth would have increased to an astounding ₹3.7 lakh.

In Q3 FY2024, revenue from operations increased by 0.6% to ₹200.2 Crores, up from ₹199.1 Crores in Q3 FY2023. PAT for Q3 FY2024 increased by 23.4% to ₹33.3 Crores from ₹27 Crores in Q3 FY2023. PAT margin for Q3 FY2024 increased to 15.9% from 13.1% in Q3 FY2023.

Although Kewal Kiran Clothing has given good quarter results, the stock consolidated during the last month declining 11 percent from ₹756 to ₹680. So, does this provide a good investing opportunity? Well, let’s dig a bit about the company to answer this question.

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Industry Overview of Kewal Kiran Clothing

The future of the Indian textile and clothing industry appears bright, bolstered by strong domestic consumption, boosted by favorable demographics, rising disposable incomes, and low organized retail penetration.

In comparison to other major economies, India’s population is among the youngest in the world. A younger consumer class absorbs fashion trends faster, has a greater proclivity to spend discretionary expenditures, and is more technologically connected and exposed than their elders. 

Because of these reasons, India’s young population bodes well for apparel consumption categories, propelling the country into the higher demand bracket. With rising consumerism and disposable income, the retail sector has expanded rapidly over the last decade, and this trend is projected to continue.

With all of these favorable aspects, the Indian textile and apparel sector is predicted to develop at a 10% CAGR from 2019-20, reaching US$ 190 billion in 2025-26. India accounts for 4% of the worldwide textile and clothing trade.

Corporate and Product Overview of Kewal Kiran Clothing

Kewal Kiran Clothing (KKCL) is a renowned manufacturer of branded clothing. It is one of the few firms in India with a fully integrated value chain that includes design, manufacture, branding, and retail.

It offers men’s apparel in casual and semi-formal styles. It bought women’s clothing brand Desi Belle in FY21 to grow into womenswear and is currently looking into the kidswear market. It features a diverse portfolio of brands, including Killer, Lawman Pg3, Integriti, and Easies, over a range of pricing points.

BrandBrand PositioningPrice RangeRevenue break up
KillerThe flagship brand catering to the premium luxury segment₹2,500–4,00063%
Lawman Pg3A premium mass market brand₹999–1,99916%
IntegritiA fashion/party wear brand focused on the mid market segment₹1,800–2,50012%
EasiesA premium mid-market brand₹1,049–1,4994%
Desi BelleA women’s wear focused brandUp to ₹1,7995%

When looking at Product sales performance, jeans remained the most revenue-generating category contributing 51.19% to the total income from sales of apparel and lifestyle accessories in FY2023 as compared to 56.28% in the previous year.

Shirts remained the second most revenue-generating product contributing 21.15 percent of the total sales followed by Trousers and T-shirts contributing 8.71 and 4.79 percent respectively in FY2023.

Financials of Kewal Kiran Clothing

Revenue (in ₹crore)779.45607.61302.73529.67
Net Profit (in ₹crore)119.2881.6519.4273.04

In the fiscal year 2023, KKCL saw a substantial increase in revenue, surging by 75% to reach ₹779.45 crore as opposed to ₹607.61 crore in FY2022. Analyzing a span of four years, encompassing FY2020 to FY2023, Kewal Kiran Clothing displayed a Compound Annual Growth Rate (CAGR) of 13.74% in revenue.

Simultaneously, there was a noteworthy upturn in net profit, experiencing a 46% increase from ₹81.65 crore in FY2022 to ₹119.28 crore in FY2023. Over the cumulative four-year period from FY2020 to FY2023, the net profit showcased 18% CAGR.

In FY23, KKCL maintained favourable financial metrics with a Return on Equity (ROE) of 23.26% and Return on Capital Employed (ROCE) of 27.86%.

Future Plans of Kewal Kiran Clothing

Increasing Store Additions

Given its strong balance sheet and apparel manufacturing capabilities (8 million units as of FY23), management believes the time has come to accelerate growth. It added 70 EBOs over FY12-21 at a moderate revenue CAGR of 7%.

KKCL plans to expand its EBOs and has added 131 in FY21-23, which is approximately double the number added in FY12-21. In FY23, it opened 97 new stores, its most ever. As a result, it achieved a revenue/PAT CAGR of 14%/18% over the last three years, compared to 7%/4% in the prior period. The management aims to have over 700 EBOs by FY26 and plans to add 80-100 EBOs per year from now on. 

Expansion through Asset Light Model

KKCL’s expansion strategy relies on franchise-owned franchise-operated (FOFO) outlets. Out of 453 EBOs, 425 (or approximately 94% of the total) are FOFO stores. Franchise owners invest and spend capital on operating EBOs, resulting in KKCL’s asset-light model. The management intends to continue with this concept and create more FOFO-based stores in the future.

The management anticipates the retail channel (EBOs) to be the primary growth driver for Kewal Kiran Clothing, hence it is rapidly expanding its retail store count. Over the past five years, its EBO count has increased by more than 1.5 times. The majority of its stores are FOFO.

Revenue contribution from EBOs increased to 48% in FY23 from 34% in FY18. The management expects to open 80-100 stores per year, with over 700 outlets by FY26, increasing contribution from the retail channel.

Sales through Multiple Channels

KKCL works through many channels, including retail (EBOs and national chain shops), non-retail (MBOs), and others (factory outlets, e-commerce, and exports). It is steadily increasing its revenue contribution from retail and e-commerce, which management expects to increase faster than other channels.

Historically, more than half of KKCL’s sales have come via MBOs (non-retail channels). However, the corporation is lowering its reliance on MBOs, with the figure dropping to 3,000 in FY23 from 4,000 in FY20. 

In contrast, its EBO count climbed to 453 in FY23 (a three-year CAGR of 12%) from 322 in FY20. E-commerce now accounts for approximately 8% of total revenue. It has solely partnered with Flipkart to sell its Killer products.

As a result of aggressive EBO expansion, revenue contribution from the retail channel is continuously rising while that from the non-retail channel (MBOs) is dropping. Expansion through EBOs helps KKCL strengthen its brand image. The corporation is also improving its brand image through advertising.


With a strong brand portfolio, integrated operations, aggressive store expansion plans, and a shift towards an asset-light franchise model, Kewal Kiran Clothing seems well-positioned for future growth. Kewal Kiran Clothing’s focus on enhancing its retail presence and e-commerce reach aligns with evolving consumer preferences. 

As investors, one must assess if KKCL can sustain its growth momentum, profitability, and return ratios. Can Kewal Kiran Clothing continue to delight its customers and effectively compete in the dynamic apparel market? Share your thoughts in the comments below.

Written by Nalin Suriya

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