In conversation with Kunj Bihari Agarwal, MD of Rupa & Company Ltd

The Indian textile sector is one of the most crucial sectors for the nation’s economy. Providing direct employment to 4.5 crore people and another six crore in allied sectors, it is set to play a huge role in helping the Indian economy bounce back stronger post the COVID-19 crisis

"At our company, we have consistently made strategic and exciting investments, which have today established us as the pioneering parent company of about 14 brands and over 7,000 SKUs across various ranges for men, women & children. Inorganic growth is always on the agenda for Rupa & Co., and we are more than happy to venture into similar inorganic brand associations or in-licensing deals in the coming years." says Kunj Bihari Agarwal, MD of Rupa & Company Ltd.

​What is your outlook on the Indian textile sector? What impact will the second wave of Coronavirus have on the sector? 

The Indian textile sector is one of the most crucial sectors for the nation’s economy. Providing direct employment to 4.5 crore people and another six crore in allied sectors, it is set to play a huge role in helping the Indian economy bounce back stronger post the COVID-19 crisis. At present, in spite of the logistical impediments caused by the pandemic, the credit profile throughout the industry remains stable. However, some of the impacts include the temporary negative effect on the availability of labour and raw material due to local/sporadic lockdown. The demand from rural India was also impacted more during this period. However, this did not influence the finished goods supply chain significantly and the Indian textile domain remains as resilient as ever. 

Furthermore, the organised sector is set to benefit more than ever from the recent international developments. The rise of new avenues such as medical textiles presents a huge opportunity for India, as the second-largest exporter of textiles and apparel with a share of 5 per cent of global trade. Additionally, policy support from the government is also set to act as a catalyst for the same thereby, further elevating India as a preferred textile destination.   

Despite the challenges faced due to the pandemic, your company has reported its highest-ever revenues & profits in FY2021. Net debt to equity reduced from 0.30x in FY20 to 0.04x in FY21 and working capital days have also reduced by 54 days. Which factors have contributed the most in helping you record such a turnaround? 

At Rupa, we were more determined than ever to take our legacy of quality offerings and the best customer satisfaction forward, in spite of the lockdown. Our execution of a planned and focussed sales strategy paid off very well, as our teams successfully utilised time fruitfully at every level. With a concentrated approach and rationalisation in inventory/production planning, we were also helped by the government’s policy support, which further helped boost liquidity.   

Furthermore, demand for athleisure increased amidst the pandemic, which boosted our sales. We also removed all plausible logistical impediments from our supply chain to further streamline our manufacturing process. Inclusiveness in the workplace and continuous top-down support also enhanced employees’ confidence in leadership and helped mitigate bottlenecks arising due to COVID-19.  

Your company is strategically moving from the traditional wholesale distribution channel to a direct distribution channel for some products. How will this optimise operations? 

The premium and the super-premium segments require retailing. Hence, the direct distribution channel allows us to meet and understand customer requirements for these segments, in order to provide the best offerings for the same. Choosing the right distribution channel is an extremely important aspect of Rupa & Co.’s sales operations and we felt that this particular approach would help us have more direct control of the sales in these domains and also, increase direct customer contact.  

E-commerce is one of your key distribution channels. Could you throw some light on your plans of developing a robust tech-based warehouse infrastructure to support the pure-play marketplace business model? 

Our revenue from operations for the last quarter stood at Rs 454 crore (up by 153 per cent) in which, e-commerce played a promising role. The scale of e-commerce operations is increasing significantly for us as an agile company that has stayed ahead of the curve for over fifty years. Our products are available at our online store, as well as across all the leading e-commerce platforms such as Amazon, Myntra, Flipkart, Ajio, Nykaa, Tata Cliq, and Snapdeal. Hence, we are presently contemplating to invest in the latest tech to synchronise/analyse the data in real-time required to support the nuances of the e-commerce distribution channel, going forward. Our warehouse infrastructure is commensurate to the scale of operations presently but at Rupa & Co., we are constantly evolving to meet the requirements of not just the present but also, the future.  

In 2016 & 2017, your company acquired an exclusive licence from ‘FCUK’ and ‘Fruit of the Loom’, which helped your company establish ground in the premium & super-premium segment over the years. Do you have plans to enter into similar inorganic brand associations or in-licensing deals in the future? 

We are continually expanding and always looking for interesting & bright opportunities with operating as well as financial leverage. At our company, we have consistently made strategic and exciting investments, which have today established us as the pioneering parent company of about 14 brands and over 7,000 SKUs across various ranges for men, women & children. Inorganic growth is always on the agenda for Rupa & Co., and we are more than happy to venture into similar inorganic brand associations or in-licensing deals in the coming years.             

What is your strategy to foray into new markets and strengthening your share in the existing markets? 

FY21 was the most profitable year for Rupa & Co., with the highest-ever revenues for the company. In the coming year, we plan to go deeper in states like UP, MP, Chhattisgarh, and Maharashtra, as we are continually expanding across all domestic as well as international markets. Furthermore, we are also planning to increase our presence in Western & Southern India, backed by a strong on-the-field team, marketing support, and a sound distribution network in the next 1-2 years. We currently have over 1,25,000 retail outlets in the country and manufacture over 7,00,000 finished goods pieces per day. We only aim to increase this number, as we charter our way forward, to elevate our presence across all blooming markets.