Kitex to invest Rs 9.10 bn to back revenue target of Rs 21.65 bn by 2025

The investment will help the company to increase its revenue to Rs 21.65 billion by 2025 from the current Rs 5.59 billion

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Gireesh Babu Chennai

Last Updated : Aug 29 2018 | 1:39 PM IST

BSE-listed Kitex, the infants garments major based in Kerala, has chalked out a roadmap for 2025 with an outlay of Rs 9.10 billion to be spent over the next 7 years.

The investment will help the company to increase its revenue to Rs 21.65 billion by 2025 from the current Rs 5.59 billion. The Strategic Roadmap for 2025 was prepared by consulting firm KPMG, Kitex management informed the investors.

The investment includes for sewing factories, packaging and accessories factory, sewing centres, software unit among others.

The board of the company has also asked KPMG to assist with the evaluation of the additional expansion plans.

The proposed investment will help the company to grow around 20-23 per cent, every year, between 2018-19 and 2023-24. The turnover is expected to be around Rs 21.65 billion by 2025 as against Rs 5.60 billion in 2017-18.

The growth strategy includes revenue enhancement, horizontal product diversification, capacity augmentation and vertical integration.

Kitex business is undergoing a dynamic transition taking the company to the next level. The management is deeply involved in further improving our global advantage. The succeeding few years are going to be very important to our company as we capitalize on the company's inherent strengths which are primarily its advanced processes, practices and the way it engages with the customers, said Sabu M Jacob, Chairman & Managing Director of Kitex.

The global market is abuzz with debates and analysis on the recent escalation of trade sanctions between USA and China. On further escalation of this development, global buyers, particularly those based in the US, may restructure their supply chains and opt for sourcing products from countries other than China. This could create a substantial opportunity for manufacturers in other countries including India.

The supplier consolidation trend, as well as the Trade war-related fallout, is already unfolding more opportunities that support growth in the near future as well as long-term, he said in a letter to the company's shareholders.

In 2017-18, the company has received order confirmations from major infant garment buyers viz., Gerber Childrenswear LLC, Carters, Buy-Buy Baby, Ross Stores, Amazon, Target, Walmart who can contribute major part of Company’s turnover in coming years, said Jacob.