Rupa & Co shares fell as much as 20 per cent during the early trading hours on Tuesday, May 24, the biggest one-day fall on record, following a weak earnings print for the quarter ended March and a sudden reshuffle in the company’s top management. Following the developments, shares of Rupa & Company dropped close to 20 per cent to Rs 414 on Tuesday at 10.25 am. The counter was just shy of its circuit limit at 412.5. The scrip settled at Rs 515.60 on Monday.
For the entire financial year 2021-22, the company reported a 9.4 per cent rise in net profit to Rs 191.8 crore from Rs 175.3 crore in the previous fiscal. The revenues of the company rose 12.3 per cent to Rs 1,474.1 crore during the FY222.
The company also announced its Q4 results on Monday, 23 May 2022. On a consolidated basis, Rupa & Company’s net profit declined 25.2 per cent to Rs 49.30 crore on 0.3 per cent increase in total revenue to Rs 455.50 crore in Q4 March 2022 over Q4 March 2021.
Profit before Tax (PBT) fell 22.7 per cent year-on-year to Rs 68.20 crore in Q4 March 2022. EBITDA fell 18.1 per cent YoY to Rs 74.20 crore in Q4 March 2022. EBITDA margin stood at 16.3 per cent in Q4 March 2022, lower than 20 per cent in Q4 March 2021. The board recommended a dividend of Rs 3 per equity share for the financial year ended 31 March 2022.
The reason behind the fall in EBTIDA was higher raw material prices, employee costs, and advertisement costs, said the management over the earnings call. The revenue growth remained flat despite a 10 per cent drop in volumes owing to price hikes taken by the company. The company did take price hikes but did not pass on the entire rise in raw material cost to consumers which led to a drop in EBITDA and net profit. The company over the call also clarified that the sub-contracting cost was higher compared to last year owing to higher inventory.
For the full financial year, the company also missed its revenue growth guidance of 18% and also witnessed market share losses.
Rupa is among the largest knitwear brands in India that produces innerwear, casual wear, thermal wear, and sleepwear for men, women, and kids.
Rupa & Company said that Dinesh Kumar Lodha has resigned for personal reasons, and he is and will be a part of the selection process for the new CEO to ensure a smooth transition.
Ramesh Agarwal is part of the promoter family and his resignation from the post of CFO is to free up his bandwidth from regular day-to-day activities and leverage his rich experience in the overall growth and transformation of the company. He will continue to guide the company as a whole-time director.
Agarwal will be replaced by Sumit Khowala, who has been appointed as the new CFO of the company (key managerial personnel), from June 1, 2022.
The company said that Agarwal will continue to guide the company as a whole-time director. In Agarwal’s stead, the company has promoted Sumit Khowala as the chief financial officer, who has spent over a decade at the company.
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