It is a pleasure to connect with you as we close another successful year. While yourCompany continues to grow its topline and bottomline what makes this year important isthe fundamental change in approach that we are taking for a better tomorrow.
For years your Company has been engaged in creating and building several unique nichesegments like loungewear intimate wear and more recently the airport wear. We did thisthrough our extensive distribution network following the concept of supplying products tomultiple retailers who in turn sell them to end consumers. This strategy has beenimmensely successful and has driven our growth for many years. But the challenge goingforward is that we know little about the end customers. This is a critical gap especiallyin the Indian context which is a huge and heterogenous market with trends andrequirements greatly varying from place to place.
It is therefore extremely important to understand what your customers want in eachmarket and predict what they may want two-three years down the line. Even more preferablycreate a necessity and induce them to desire and yearn for your products. I believe thisis where your Company is building competencies - the art of knowing the customer insideout and delivering new products that will solve their purpose.
In pursuit of this we are moving up the value chain to retail directly to customersand interact with them build relations and understand them better.
We have shifted our focus from merely selling through Multi-Brand Outlets (MBOs) toadding Exclusive Brand Outlets (EBOs) and Store-in-Stores (SISs). The difference is thatin MBOs customers come looking for a product and invariably buys any brand but in EBOsand SISs the customers will come specifically looking for your Company's products and getserviced by own sales representative. This will help in understanding them better. We haveeven created a robust online presence through own and partner web portals.
We are upbeat on this shift of approach and believe it will propel our growth in theyears to come.
Performance review FY 2017-18
Coming to the performance in this year our revenues grew 24.15% to ' 38427.20 Lakhs.EBITDA grew by 26% to ' 9914.89 Lakhs. However this was exceptional as we benefited fromsale of treasury stock available from merger of Momai Apparels Limited and AshapuraIntimates Fashion Limited amounting to ' 4068.49 Lakhs. Profit After Tax stood at '6219.46 Lakhs growing 194.21% over the previous year. We continue to maintain a healthyreturn on equity at 27.94%.
In terms of operations we have seen strong traction in our brands. Valentine ourflagship brand continues to see strong performance. Our strategic decision of migratingall men-oriented products from the umbrella of Valentine brand to a new brand Tricciformed in the last year was received well by customers. This was necessary to give menproducts a more masculine identity. We are seeing steady movement in the newly launchedairport category products as well. This is an entirely new segment in India and moreefforts are required to create awareness.
We launched a new brand category in FY 2018-19 under the brand Night & Day forwomen nighties. Though the segment existed earlier under the Valentine brand thissegregation will facilitate in having focussed strategies. We have involved celebritiesfor its promotion.
Our focussed strategy of converging the offline retail (EBOs and SISs) and onlineretail is enabling us to have better control over inventory management and productionplanning. With this we have seen further improvement in our working capital cyclecompared to the previous year.
Building brand connect
While we make great products it will be important to undertake aggressive promotionalinitiatives across various offline and online mediums over the next few years to build anemotional connect. We have formed a comprehensive branding strategy and intend toassociate with more celebrities.
With rising affluence growing per capita income and increasing urbanisation along witha favourable demographics the apparel market in India is all set to grow. It is expectedto reach ' 7500 Billion by 2022 growing 13% annually. Whereas the inner/intimate wearmarket is expected to nearly double to ' 470 Billion by 2020 from its level of ' 240Billion in 2015.
This is a huge opportunity. I believe the organised players will see stronger growthhenceforth as customers become more brand conscious.
At Ashapura Intimates we consider this to be the most opportune time to be inbusiness. Our massive range of products strong designing capabilities and the advantageof striking the right price point due to integrated operations provide us a competitiveedge. During the year we undertook further measures to strengthen business.
We have formed a subsidiary in Singapore to build our export business globally andanother subsidiary to have a sharper focus on the retail business.
We intend to aggressively expand further in the coming years both organically andinorganically to increase brand visibility and reach out to more places. We already havegood presence in the tier I cities and our focus now will be the tier II and III cities.
I thank each of our stakeholders for their continued support and trust in us. We aremoving in the right direction and I am confident the culmination of all these initiativeswill see your Company becoming much stronger and larger in the years to come. Join us aswe embark on an exciting journey.
|Warm regards |
|Harshad Thakkar |