We are pleased to write to you on the performance of Rupa & Company Limited duringthe year 2018-19. Apart from being one of the country's largest branded knitwear companywith iconic brands such as Jon Frontline Euro Bumchums Softline Macroman ThermocotTorrido and M-Series. The Group also has exclusive license with international brands ofrepute "Fruit of the Loom" and "FCUK" to manufacture distributeadvertise and sell their innerwear and related products in India. We believe that thelocal consumer going global in their preferences towards a branded fashionable and iconicinnerwear and fashionwear will therefore benefit the Company's portfolio immensely in theyears ahead.
In the year under review the Company has delivered a mixed performance. While revenueshave grown at 1.70% during the year net profits have declined compared to the previousyear. We are at an important stage in our journey. Over the last few year your Companyhas undertaken key initiatives to drive long-term growth - strengthening its core brandsexploring new categories streamlining its operations for better organisationaleffectiveness and agility and embedding digitisation in key areas of the value chain.
Dedicated to nation-building
India lives in seven hundred thousand villages. Though Mahatma Gandhi said this severaldecades ago this is still very much true. We will divide the market opportunities intorural and urban. In rural markets at present the consumption level is low. However withseveral positive initiatives by the government the disposable income of rural consumersis on the rise and there is great opportunity for the future. Also consumers areincreasingly shifting from proxy products to branded ones. Our product quality priceaccessibility and reach provide us a good ground to capture this opportunity.
In the urban markets the consumers are increasingly demanding new and differentiatedproducts. Our strong R&D capabilities and ability to understand the unmet needs ofconsumers position us attractively for this market. We are doing a lot of innovation forthis segment to deliver products that can improve consumer experience and make theirfashion better. We are proud of the fact that Rupa has been awarded with "PromisingBrands-2018" by The Economic Times.
Being environmentally sustainable
We believe that the environment belongs to every living creature on the earth. Nobodyhas the right to pollute the air water and soil. Focussed on this we built a culturewhere people are motivated to take care of nature. We ensure that our products aresustainable by using environmentally benign raw materials in production. We have takenmeasures to ensure that no pollution emanates from our factories.
Gaining consumer trust
We gain consumer trust by providing them with quality products which meet their needs.For stringent quality control we ensure that the products are manufactured at ourstate-of-the-art facilities. Consumer need and gap identification is one area where wereally score brownie points. This is made possible by our robust marketing team and localfeet-onstreet team who have close relations with the entire value chain down to theconsumer level. Insights from them are leveraged to develop these efficient and cost-effective products.
By all accounts e-commerce is going to be very influential channel for retail.According to Boston Consulting Group (BCG) fashion is the first category that mostIndians (28%) buy online; mobile phones follow at 20%. BCG study shows that 50% of thosewho buy fashion online are from Tier II and smaller cities a geography that is ofstrategic importance to our Company products. The drive towards embracing the digital erawill help establish greater relevance for our brands with our consumers and cement ourpresence even further.
Going forward we see tremendous opportunities ahead to serve the evolving needs andaspirations of the new generation Indian consumer. By all accounts the long-term trendsin the Indian innerwear and fashionwear market continue to be positive. Increase inpersonal incomes higher aspirational levels in Tier II III and IV towns and all roundgrowth in consumerism will continue to drive the growth. We hope to achieve robust growthin coming years. The management is also regrouping initiatives in export markets. All inall we look forward to a good year.
We will keep making better products to ensure formidable growth keeping in mind theinterest of all our stakeholders who have consistently reposed their trust in us. Wewould like to thank our employees and all other stakeholders for all their efforts andsuccesses.
With warm regards
Prahlad Rai Agarwala Chairman
Ghanshyam Prasad Agarwala Vice-Chairman
Kunj Bihari Agarwal Managing Director