Kewal Kiran Clothing Q3 Review - Strong Execution With Better Margins: ICICI Securities
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ICICI Securities Report
Kewal Kiran Clothing Ltd.’s Q3 FY22 revenues increased 45% YoY to Rs 1.7 billion (our estimate: Rs 1.5 billion), implying two-year revenue compound annual growth rate of 17%.
Gross margin expanded 288 basis points YoY to 39.6% led by improved realisation (up 9% YoY) and Ebitda margin increased 466 bps YoY to 16.1% aided by better operating leverage.
Ebitda and profit after tax almost doubled YoY to Rs 275 million and Rs 213 million respectively – both ahead of our estimates.
Net cash increased by Rs 640 million QoQ to Rs 2.8 billion with Kewal Kiran declaring an interim dividend of Rs 4/share.
Factoring in the faster-than-expected demand recovery, we increase our FY23E-FY24E revenue, Ebitda and profit after tax estimates by 2-8%.
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