23 December 2021, Mumbai:
Coimbatore in southwest Tamil Nadu is known as the Manchester of south India and, no wonder, that in the 1970s and 1980s, it offered a varied palette of companies in the manufacture of textiles and related businesses to the trading floor of the then vibrant Madras Stock Exchange.
Most of those illustrious names have, in some sense, passed into oblivion, though some of them are still traded on the national exchanges, with the regional one having been moth-balled.
Is it any wonder then, if a star sparkles out of the same city in more recent years? KPR Mills Ltd, with a market cap that is almost close to the Rs20,000 crore bracket, has shown a stellar performance on the bourses ever since its public float in 2007 with a small capital raise of under Rs150 crore!
The company is a full-scale textiles manufacturer with an overt thrust on the value-added garment segment that, in revenue terms, currently towers over the typical commodity business of yarn and fabric that most textile mills account for across the country.
The top-line, which includes an unrelated diversification into sugar and allied products, is an imposing Rs3,550 crore in the last accounting year ended on 31 March 2021.
The component of the export sale, which is at a flattering 35% of the top-line, signifies the foray the company has made into the highly competitive international market navigating multiple challenges of quotas and tariffs.
But the stark surprise is the operating margins it makes which propels its free cash flow in the consolidated books for the same period to an astonishing Rs815 crore before coughing up to the exchequer the taxes!
It is no mean a feat in a business, where the competition is from other tigers in Asia like Bangladesh and Vietnam, that enjoy a very supportive regulatory and business climate, which is still an unfulfilled aspiration for us.
Nothing puts the matter in perspective as the fact that a legend in branded textiles business that has been around far longer and with a formidable presence across the value chain right up to retail and proclaims itself as the ‘complete man’ has a market-cap a little less than a quarter of KPR’!
It is not an accomplishment that can be missed even by the most superficial, for what is essentially a family organisation that has taken listing more for status than to actually access funds from the market and has returned many times over the initial investment in an initial public offering (IPO). Yet it remains quite low-profile in a tier-2 city in a state generally considered less entrepreneurial!
MONEY LIFE (The news article has not been edited by DFU Publications staff)
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