AUM Capital
Rupa & Co (Buy)
Target: ₹614
CMP: ₹465.3
Rupa & Company is a knitwear Indian brand with 125,000+ Retail Outlets, 1200+ dealers, 7000+ SKUs, 18 sub-brands in its vested kitty fetching 700,000+ finished goods pieces per day with presence across major e-commerce platforms like Amazon, Flipkart, Snapdeal, Myntra etc.
Rupa has an asset-light business model with a strong focus on constantly creating and nurturing its brands. The Company is utilizing its incumbent resources to focus more on value addition, product differentiation, branding and distribution. Also going forward it plans to expand through the franchise Exclusive Brand Outlets (EBOs) in order to remain asset light.
It has been consistently and rigorously investing in brand building exercises through advertising & promotion activities. Company has spent over Rs 1,000 crore on brand development in the last decade or so which translates to around about 7 per cent of overall revenues.
Rupa is witnessing strong demand for its thermal wear range, besides, its bolstering distribution network and investments in brand building would enable it to capture the growth opportunity and reap benefits from the increased demand for its product categories.