MANAC GroupProject SECA Group3 r2

FINANCIAL ANALYSIS OF
READYMADE APPAREL
INDUSTRY
Prepared and submitted by:
Ankit Doveriyal
Hitanshu Goyal
Joseph Fernando
Kr. Sourabh Sashwat
Mayur Mohan Kalgutkar
Shipra Goel
Sonal Kapoor
MANAC, IPMX 20-21
MANAC Assignment- IPMX 20-21
INDEX
Introduction.......................................................................................................................................3
Motivation.........................................................................................................................................3
Choice of Industry..........................................................................................................................3
Choice of Players............................................................................................................................4
Macroeconomic factors affecting undergarment sector in Apparel Industry....................................5
Major players.....................................................................................................................................6
Business Model..................................................................................................................................8
Cost and Profit Structure....................................................................................................................9
Porter’s Five force Analysis................................................................................................................10
Recent News......................................................................................................................................10
Sustainability Report..........................................................................................................................11
Corporate Social Responsibility..........................................................................................................13
Corporate Governance Overview......................................................................................................15
Quality of the Auditors......................................................................................................................18
Quantitative Analysis.........................................................................................................................19
Liquidity Ratios...............................................................................................................................19
Solvency Ratios..............................................................................................................................20
Turnover Ratios..............................................................................................................................21
Profitability Ratios..........................................................................................................................25
Market Valuation Ratios................................................................................................................29
Buy/Sell Decision...............................................................................................................................33
Appendix...........................................................................................................................................34
2|Apparel Industry -Undergarment Sector

INTRODUCTION
The textile industry comprises sections like research, design, development, manufacturing, and
distribution of textiles, fabrics, and clothing.
The Textile industry was born with the
 The invention of the flying shuttle in 1733,
 The spinning jenny in 1764, and
 The power-looms in 1784.
Then the fabrics and clothing began to be mass-produced.
 After 1775 improved steam engine revolutionized the textile industry.
The textile industry is also a complex industry, including spinning mills, weaving mills, knitting mills,
dyeing mills, garments, and companies that sell buttons, zippers, and knitting supplies, sewing
machines, and threads.
MOTIVATION
Choice of Industry
The Indian Textile industry is on a growth spree and presumed to keep growing due to the following
factors
 Presence of complete value chain from fiber to fashion
 Abundant Availability of Raw Material
 Availability of Manpower
 Comparatively low cost of Manpower
 Large and Growing Domestic Market
 Availability of Ready Infrastructure

 Centre and State Level Support
India's textile and apparel market has been growing at a healthy CAGR of 10.23 percent after 2016
and should touch US$ 223 billion by 2021. The contribution was seven percent of the industry
output (in value terms) in 2017-18. It contributed 2 percent to the GDP of India and employed more
than 45 million people in 2017-18.
The forecast is that the new proposed textile policy will help achieve US$ 300 billion worth in textile
export by 2024-25 and create an additional 35 million jobs. By 2022 alone, the Indian textile sector
will need extra 17 million workforces.
As per a report, the textiles and apparel sector can create jobs and spur further industrialization in
countries recovering from COVID-19. Being a labor-intensive sector Textile industry employs
millions, and hence it can make millions of employment opportunities.
This report is on financial performance analysis of three major players in the Readymade Apparel
sector. The report's primary motivation is to understand the accounting practices that firms follow
and how they account for their cost and assets.
Choice of players
The innerwear market-Readymade Apparel Industry in India has come a long way. From being
considered a functional accessory to product involved in enhancing the Fashion Quotient, Innerwear
market has grown exponentially. The market, estimated at Rs 27,931 crore, accounts for 10% of the
total apparel market and is expected to grow at a compounded annual growth rate of 10% over the
next decade to Rs 74,258 crore.
Page Industries has a market share of 55 percent in men and women's innerwear and has also
gained a 50-60 percent market share in e-commerce platforms. Robust Distribution Network, Push-
Based Demand Approach, Low Labour Attrition Rate, and Long-term Management guidelines have
enabled Page industries to achieve this feat. The company is increasingly gaining a foothold in the
expanding Athleisure market.
KPR Mills is another major player in the market with one of India's largest vertically integrated
manufacturing capacities. It produces better customized Superior Quality Readymade Knitted
Apparel and Fabrics with consistent quality at a cost-effective price.
Rupa and Co. cover the range of knitted garments from innerwear to casual wear. Rupa brands enjoy
top-of-the-mind recall across all segments and have impressive footprints across the globe. With a
daily capacity to produce over 700,000 pieces of finished goods, The Company strives to be
competitive and is present in 17 countries.

MACROECONOMIC FACTORS AFFECTING UNDERGARMENT SECTOR IN APPAREL INDUSTRY
The study has analyzed information from various reliable sources, and the impact of political,
technical, economic, social, legal, and environmental factors on the textile industry is as under.
Political factors
After the Introduction of FDI, foreign investors are setting up manufacturing facilities in India. Indian
Government has gradually eliminated many restrictions and has brought down import duties on
capital equipment, thus providing a global manufacturing platform to other companies.
Initiatives such as 'Make in India' and the promotion of "India Handloom" on social media have
increased the manufacture and consumption of high-quality handloom products.
Economic factors
Various economic factors such as per capita income, national income, resources mobilization, and
others influence the textile industry. With income rising in the rural economy as well as domestic
demand for the sector has increased. With the right innovations, the business's potential is
enormous both in the domestic and export sectors.
The textile industry is the largest industry in terms of the employment economy, expected to
generate 12 million new jobs by 2010.
Social factors
Factors like education, knowledge, norms, and beliefs shape up the industry. The textile industry
starts with cotton cultivation, and hence the social stratification has a vital role to play in the
industry.
Technological factors
One of the essential factors to shape the innovations and R&D in the industry is the Technological
factors impacting it. Sophisticated technology and technology transfers are imperative to be
competitive in the market. The technical textile industry depends on the latest technology and relies
on FDI and the reduced import cost on machinery.
Legal factors
India's legal business environment includes industrial licensing, factory administration, industrial
disputes, monopoly control, and foreign exchange regulations. Ease of Trade membership and
favorable labor laws are a few other factors required to drive the growth spur.
Environmental factors
To preserve ecological balance is one of the most crucial responsibilities of the textile industry. Steps
taken in this regard are like banning dyes such as Azo dyes and making it compulsory to recycle
industrial wastes and effluents.

MAJOR PLAYERS IN THE TEXTILE - READYMADE APPAREL INDUSTRY
India’s textiles industry contributed seven percent of the industry output (in value terms) of India in
FY19. It contributed two percent to the GDP of India and employs more than 45 million people in
FY19. The sector contributed 15 percent to the export earnings of India in FY19. The textile industry
has around 4.5 crore workers employed including 35 lakh handloom workers across the country.
1. Page Industries Ltd. Is the leading player in the premium Innerwear and Athleisure Market. The
Company is the exclusive licensee of Jockey International Inc. (USA) for manufacture
distribution and marketing of the Jockey brand in India Sri Lanka Bangladesh Nepal UAE Oman
and Qatar. Page Industries is also the exclusive licensee of Speedo International Ltd. for the
manufacture marketing and distribution of the Speedo brand in India consisting of swimwear
apparel water shorts equipment and footwear. Jokey is the company's flagship brand and a
market leader in the innerwear category. The company has established the premium segment
in the innerwear category in India through brand Jockey.

Page commands 17% of the revenue share of the readymade apparel market with 2.95cr sales
turnover in FY-2020. Its Y-o-Y revenue growth in the FY-2020 was 3%, an exception to double
digit growth from FY-2016 onwards.
2. KPR Mill Limited (formerly known as KPR Cotton Mills Pvt. Ltd.) was originally incorporated on
March 19 2003. The company is one of the largest vertically integrated apparel manufacturing
companies in India producing yarn cotton knitted fabric readymade garments. The company
also has strategic investment in Wind Power Projects & Co-gen plant for captive consumption.
In 2019, they launched ‘Faso’ 100% organic cotton Men’s innerwear brand in the retail
segment.
KPR Mill is the closest second with 16% revenue share of the readymade apparel market.
Knitted garments contributes 40%, yarn contributes 36% and fabric contributes 5% of its total
sales. Its Y-o-Y revenues contracted by 3% in FY-2020, an exception to double digit growth from
FY-2016.It also lost the top spot revenue-wise to Page industries in FY-2020
3. Rupa & Company Ltd is the No.1 knitwear brand in India covering the entire range of knitted
garments from innerwear to casual wear. The company was incorporated in the year 1985. The
Company is primarily engaged in manufacture of hosiery products in knitted undergarments
casual wears and thermal wears. It has a Strong brand portfolio across consumer classes: basic,
mid-premium, premium and super-premium.

In terms of revenue share of the readymade apparel market, Rupa & Company stands fifth with
5% share. Sales turnover is quite flat since the last 5 years and contracted significantly in FY-
2020 affected mainly due to the Covid Pandemic.
BUSINESS MODEL
Key Activities Key Partners
Trend watching Textile suppliers

Purchasing Value proposition Logistics
textiles Customer segments
Assortment Marketing
Dress Men & women of all
manufacturing Pricing age group
Key resources
Supply chain Customer service
management Production
CRM Factory
Sales Workers
Oversight
Cost structure
Revenue Stream
Variable: materials, hardware, labour, duties,
Direct to Consumer
shipping/packaging, warehouse

COST AND PROFIT STRUCTURE
The Cost structure across the Readymade Apparel Industry is typically heavy on the ‘Cost of
Production’ with 78% share followed by Selling & Administration Cost with 9% share. PAT across the
Industry stands at 7% of the revenue.
1. Cost of Production: Major cost drivers are the Raw material consumption and Employee Benefit
expenses. Raw material consumption forms the major portion with Industry average of 48-51%
of the gross sales and the Employee benefits expense forms the next significant portion with
Industry average of 16-19% of the gross sales.
2. Selling & Administration Cost: There is wide range in the major cost drivers for Selling &
Administration costs. Common cost drivers are Advertisement expenses, commission on sales,
distribution expenses. KPR Mill spends the least amongst the three in the selling &
administration costs. Page industries pays about 5-6% of their gross sales in royalties to Jockey
and Speedo. Also, spends about 4% of gross sales for advertising. Rupa & Co. spends the most,
among the three, on advertising about 7% of gross sales.
3. PAT: Profit after tax, Industry average is around 7% of the gross sales. Page Industries is able to
command PAT of 12-14% of gross sales due to strong brand value. KPR Mill is able to generate
on PAT of 8-10% of gross sales due to lower spending on Selling & Administration costs. Rupa &
Co. PAT is aligned with the Industry average.

PORTER’S FIVE FORCES ANALYSIS
RECENTLY IN NEWS
Page Industries stock has lost 50% value after a whopping 9800% rise in just over 10 years. As of
Friday, September 4, the stock had two 'sell', eight 'underperform' and four 'hold' ratings on the on
the publicly available with Reuters Eikon database, besides one ‘buy’ and two 'underperform' calls.
The company has reported flattish EPS growth in the last 2 years. The company has also reported a
₹39.55 crore loss for the Covid-hit June quarter.
Page Industries has been excluded by Norway’s Norges Bank Fund portfolio citing reports of alleged
human rights violations at the company’s manufacturing unit. Speedo International will investigate a
report of possible human rights violations by its Indian partner Page Industries.
KPR Mill extends gains into sixth day, rallies 17% in one week. Shares of KPR Mill were trading higher
for the sixth straight day, up 5 per cent at Rs 669.75 on the BSE in intra-day trade on Thursday on
expectation that the company is likely to benefit from shifting the source of garment import from
China to India. As per media reports, the US has imposed restrictions on the import of certain
products such as cotton and apparels from the Xinjiang Autonomous Region in China.
Rupa & Company drops after dismal Q4 numbers. Rupa & Company announced consolidated net loss
of Rs 4.28 crore in the March 2020 quarter after trading hours on Friday, 26 June 2020. The stock
prices dropped 6.89% to Rs 175.10 subsequently. The COVID-19 pandemic has severely disrupted
10 | A p p a r e l I n d u s t r y - U n d e r g a r m e n t S e c t o r
regular business operations due to lockdowns and other emergency measures. As a result, the
volumes for the month of March 2020 has been impacted.
SUSTAINIBILITY REPORT
Page industries Sustainability Goal
The essence of Page industry sustainability strategy is to go beyond reporting to deploy sustainability
as a lever for protecting and enhancing value generation. This being the focus, in the current
reporting period, the objective of sustainability transformation journey is “To develop and create
institutional capacity and culture for sustainability”. Creating corporate culture of sustainability at
Page, elementally involves embedding sustainability practices into everyday business, making it
second nature in a way that is engaging and inspiring. By adopting a sustainability culture, we strive
to support a healthy environment and improve the lives of others while continuing to operate
successfully over the long term.
It’s Jockey’s mission to ingrain sustainability into everything that they do. Whether that be through
reductions in water usage in factories, to donating product to greater causes and developing fabrics
that have a gentler impact on the environment.
Speedo has a dedicated team continually looking at sustainability, not only in the products and the
packaging they are supplied in, but also how the products are manufactured at its factories, the
materials that are used and the working conditions of the people that make them. Currently in 2019,
Speedo featured sustainable materials using a fabric created from ECONYL® yarn and REPET yarn.
These are innovative regenerated fibres which turn waste from fishing nets, manufacturing by-
products and plastic bottles into first grade nylon fabric. By 2020, 93% of Speedo’s water shorts will
be made from recycled fabrics as part of Speedo’s ongoing product commitment to sustainability
and the remaining 7% water shorts are produced from a fabric that uses an environmentally
friendly method of dying that results in less water, energy and chemicals. Speedo is committed to
providing high quality products to all its customers and also making products and packaging much
kinder to the environment.
Stakeholder Engagement: Stakeholder engagement is critical for an efficient and comprehensive

implementation of sustainability across different departments. Cross-functional groups with
stakeholders from various departments were formed for each of the missions in order to obtain a
holistic approach in decision-making. This cross functional team involves leadership team,
department heads and staff at the head office and units.
Environment, health and safety: We are an environment friendly organization and all our units have
complied strictly with all applicable environment related laws, both in letter and spirit. At Page
Industries Limited, safety and health of our employees are extremely important, and we remain
committed to building and maintaining a safe and healthy workplace. All our employees have
demonstrated their commitment to maintain a safe and healthy workplace.
To ensure that manufacturing operations have no negative effect on environment & human health,
Ambient & Indoor Air & Noise Monitoring were carried out through approved EP/NABL laboratories.
Strict adherence to “Hazardous & Other waste (Management & Transboundary Movement)
Amendment Rules, 2019” & “E - Waste (Management) Rules, 2016” for handing used oil, waste oil,
oil-soaked cotton waste, oil filters & E – waste and disposal through vendors authorized by Pollution
Control Board.
Wash Pledge Project: They have signed the World Business Council for Sustainable Development
(WBCSD) Pledge for Access to safe Water, Sanitation and Hygiene (WASH) at the Workplace as one
of sustainable development initiatives.
Sustainability target of Page Industry
Economic
Responsible Health and
Performance
Supply Chain Safety
Study of
To have a well- Reduce Lost Time
Financial
defined system to Accident
Materials implications due
identify the Frequency Rate
to climate
Initiation of 100% Water and critical suppliers to 0.50
Energy and GHG change.
recycling of all EffluentsRecycle through To achieve 0.4
EmissionsTo reduce appropriate 100%
plastic waste in 35% of water across training index
energy intensity to methodology and
packaging as well as our facilities15% Sensitization
2 GJ/Revenue to cover 100% of Occupational
production. reduction of fresh towards Sexual
million such domestic health risk
water intake Harassment
Replace 40% acetic identification and
suppliers under among contract
acid with green acid mitigation100%
sustainability workers and
assessment100% compliance to
employees
inclusion of WASH Pledge in 3
Gender Pay
sustainability years’ time
Parity
components in all Zero waste to
contracts landfill
KPR Mills Sustainability Report
Report consist of following:
Ensuring ecological balance, protection of flora and fauna, animal welfare, agro forestry,
conservation of natural resources and maintaining quality of soil, air and water. Promoting gender
equality, empowering women, setting up homes, and hostels for women and orphans; setting up old
age homes, day care centres and such other facilities for senior citizens and measures for reducing
inequalities faced by socially and economically backward groups. Protection of national heritage, art
and culture including restoration of building and sites of historical importance and works of art;
setting up public libraries; promotion and development of traditional art and handicrafts. Ensuring
environmental sustainability: The Company is committed to environmental sustainability program.
K.P.R is committed to be fully compliant with all applicable environmental regulations. KPR is already
in all such activities. The Company is among the largest producer of Wind Energy in India and meets
its substantial power needs through Green Energy. Besides K.P.R. produces bio-gas from human
waste, thereby reducing usage of LPG. Recycles Waste water at all plants and uses for productive
purposes. Installed at its Processing facilities, a massive Effluent Treatment Plant with zero discharge
system, recycling 25 lakhs litres of processed water per day, which is one of the best in India. Planted
numerous trees at Units and nearby villages. And KPR produces organic products thereby facilitating
eco-friendly operations.
RUPA & CO. Sustainability Report
Weaving community sustainability refers to belief in giving back to the society through responsible
and sustainable operations. Building and maintain a harmonious relationship with the community
and working towards their upliftment is deep-rooted in corporate culture of RUPA & Co. The
sustainability initiatives of RUPA & Co are as follows:
Safe drinking
Healthcare Education
water
Eradicating Restoration of a
hunger and Animal welfare site of historical
malnutrition importance
The Company is making available safe drinking water including maintenance thereof, at public places
mainly in Kolkata and surrounding area in West Bengal. The Company is engaged in providing health
care including preventive health care to the needy people of the society through various
organisations. The Company is engaged in development and restoration of oldest Ghat in India, i.e.
Manikarnika Ghat in Varanasi, Uttar Pradesh, a site of historical importance.
CSR- CORPORATE SOCIAL RESPONSIBILITY
Page Industry CSR
Year 2019-2020, the following CSR activities have been identified for phased implementation:
An Integrated Education and Child Development Program and
An Initiative for Youth Development During the year under review,
Prescribed CSR expenditure each year is about 2% of average net profit of the company for last 3
financial years. CSR contribution has been increased considerably compared to previous year(s).
12.00
10.00 10.07
8.00
8.36
6.0 0 6.53 6.35
5.8 5.27 Actual CSR
4.0 0 4.6 Prescribed CSR
3.55 3.22
2.00 2.02
0.00 0.890.8
Rupa & Co. CSR
Rupa & Company operates with a strong belief that giving back to the society and contributing
towards its sustainable development is every organizations responsibility. In that endeavour, the
company has contributed towards ISKCON Food Relief Foundation operated project “Annamitra” for
facilitating the mid-day meal for 600 under privileged children. The company under Mr. Agarwal’s
able leadership has been helping the cause of 50 handicapped children. Besides, he and his brothers
have recently floated ‘Rupa Foundation’ to further augment the social initiatives. ‘Presently, thrust
will be on promotion of education among the economically backward classes. In Order to serve the
Society, the Group has also forayed into education by setting up the Sobhasaria Engineering College
in Sikar, Rajasthan. The College offers degrees in Engineering & Management and is affiliated to the
Rajasthan Technical University & AICTE.
3
2.5 2.74
2.55
2 2.27 2.1 2.24
1.92 2.07
1.5 1.65
1.25 Actual CSR
1 Prescribe…
0.5
0
KPR Mill CSR:
Promotion of education: The Company proposes to promote education including, special education
and employment enhancing vocational skills, especially among, women, elderly, and the differently
abled and livelihood enhancement projects inter-alia contribution to NGOs who are engaged in
providing aforesaid categories of Education. Medical aid The Company proposes to provide medical
aid to weaker section of society by providing medicines, medical assistance etc., to poor patients.
The Company also intends to organize or extend assistance to organize Blood/ Eye/ Medical Camps
etc. Ensuring environmental sustainability; The Company is committed to environmental
sustainability program. K.P.R is committed to be fully compliant with all applicable environmental
regulations. KPR is already in all such activities. The Company is among the largest producer of Wind
Energy in India and meets its substantial power needs through Green Energy. Besides K.P.R produces
bio-gas from human waste, thereby reducing usage of LPG. Recycles Waste water at all plants and
uses for productive purposes. Installed at its Processing facilities, a massive Effluent Treatment Plant
with zero discharge system, recycling 25 lakhs litres of processed water per day, which is one of the
best in India. Planted numerous trees at Units and nearby villages. 5. Clothing the world the Organic
way, KPR produces organic products thereby facilitating eco-friendly operations.
8
6.88
5.9 6.78
6 4.82 5.61
4.8
4 3.4 3.92 Actual CSR
2.32 3.38 Prescrib…
2 2.31
CORPORATE GOVERNANCE OVERVIEW
Overview of Board of Directors and Independent Directors
The number of Board of Directors across Page Industries Ltd., KPR Mill Ltd. and Rupa & Co. is almost
same. Out of the total number of Board of Directors, the percentage share of independent directors
doesn’t vary significantly across the companies with Rupa & Co. leading at 46% followed by Page
Industries Ltd. at 40% and KPR Mill Ltd. at 38%. Also a slight increase in the percentage share of
independent directors can be seen over the years across all the companies depicting an
improvement in the credibility of corporate governance standards.
Number of Board of Directors
Years Page KPR Mill Rupa

2017 14 13 12
2018 16 13 12
2019 16 13 13
2020 15 13 13
Percentage of Independent Directors
Years Page KPR Mill Rupa

2017 35% 31% 42%
2018 38% 31% 42%
2019 38% 38% 46%
2020 40% 38% 46%
Background of Independent Directors

The industry experience and qualifications of independent directors are substantially high (30+
years) for all the companies with rich expertise in the fields of strategic management, corporate
management, legal advisory and operations management. Below is the segregation of number the
independent directors for all the companies based on their field of expertise.
As it can be seen above, Page Industries Ltd. and KPR Mill Ltd. maintains a good balance of
independent directors coming from diverse fields/industries but Rupa & Co. on the other hand
(although has the highest percentage of independent directors) maintains a poor balance of
independent directors with expertise only from the banking and corporate finance field with no one
from the textile industry. This poses a doubt on the credibility of the decisions taken by the board
related to the industry operations.
Attendance
Over the past three years the participation of the board members in annual general meetings for
Page industries has dropped to almost 75% from 90 % with increase in the number of board
members. There is only 50-60% participation of the board members for Rupa & Co. In contrast, KPR
mills Ltd has almost full house participation during their annual general meetings.
Designation and Remuneration (Amount Lakhs)
For Page industries, there is no scheme for grant of stock options either to the Directors or to any of
the Employees. Non-Executive Directors are paid sitting fees of 20,000 per meeting for attending
Board and Audit Committee meetings and `10,000 per meeting for attending other Committee
meetings. The Remunerations are split in ratios, which changes every year depending on the firm’s
performance. The CEO & Managing director are separate individuals. The highest remuneration is
provided to the CEO (Vedji Ticku) 537 Lakhs 2020.The executive director of operations &
manufacturing (V S Ganesh) is earning a remuneration between 170-240 Lakhs over last three
years. The Managing director (Sunder Genomal) is third in the list with earnings between 120-200
Lakhs over the past 5 years.The earning of Deputy Managing Director (Shamir Genomal) is around
100-150 Lakhs for the last 5 years.The remuneration for Independent Directors has been a total of
18.6 lakhs in 2015 to 50 lakhs in 2020.The non-executive board members have received a total
around 15-20 lakhs.
For KPR Mills ltd, there is no designation of a CEO, there are two managing and executive directors
along with the chairman. Same remuneration is provided to the Chairman (Kp Ramasamy) and the
managing directors (KPD Sigamani, P Nataraj) of 572,1172,873,897,672 lakhs in 2020,
2019,2018,2017,2016 respectively. A fixed remuneration is provided to both the executive directors

(CR Anandhakrishnan, EK Saktivel) of 24 & 18 lakhs over the 5 year duration. The chairman and both
the managing directors have 21% equity share with 1, 48, 71,362 share each. The Executive director
CR Anadhakrishnan also has 1,390 shares.
For Rupa & Co., there is no designation of a Managing director, the remuneration is split based on
the ratios. People under the same designation have the same remuneration. The remuneration of
the CEO (Mr. Dinesh Kumar Lodha) of 255,213 lakhs in 2020 & 2019 respectively .Over the past two
years it has exceeded from that of the chairman (Mr. Prahlad Rai Agarwala) 208, 196 lakhs. The
remuneration for the Vice chairman (Mr. Ghanshyam Prasad) is third in the list and has increased
from 78 lakhs in 2016 to 102 lakhs in 2020. Over the past 2 years the earnings of the Whole Time
Directors has been same as that of the Vice chairman, the remuneration for Whole Time Director
was 102 lakhs in 2020.The next in line are the presidents, some of the presidents like Ravi Agarwal &
Vikash Agarwal sons of the chairman have been earning more than the whole time directors as both
enjoy an equity share of 2.19% & 2.21% respectively.
Page Industries (Amount in Lakhs)

Designation Name 2020 2019 2018 2017 2016
Managing Director Sunder Genomal 191 180 165 161 120
Executive Director & CEO Vedji Ticku 537 493 405 360 27
Deputy Managing Director Shamir Genomal 159 132 109 94 132
Executive Director– Manufacturing & V S Ganesh 241 205 173 0 0
Operations
Independent Directors & Non-executive 68 72 60 52 32
Directors
KPR Mills (Amount in Lakhs)

Chairman K P Ramasamy 572 1172 873 897 672
Managing Director K P D Sigamani 572 1172 873 897 672
Managing Director P Nataraj 572 1172 873 897 672
Executive Director C R Anandhakrishnan 24 24 24 24 24
Executive Director E K Saktivel 18 18 18 18 18
Rupa and Co. (Amount in Lakhs)

Chairman Prahlad Rai Agarwala 208 196 190 187 84
CEO Dinesh Kumar Lodha 255 213 84 81 78
Vice Chairman Ghanshyam Prasad 102 90 84 81 78
Whole Time directors 102 90 79.5 63 48
Presidents 72 72 79.5
QUALITY OF THE AUDITORS
Page Industries
Auditing firm - S.R. Batliboi & Associates LLP
S.R. Batliboi & Associates LLP is a Limited Liability Partnership firm incorporated on 01 April 2013.
Batliboi, an affiliate of global auditing firm E&Y audits various multinational companies, banks and
NBFCs around the globe. Few of its reputed clients are United Breweries Limited, HDFC bank,
Bandhan Bank, and AU small finance bank.
Though it’s a well-established and reputed auditing firm, in mid-2019, it was charged by the Reserve
Bank of India after it found several lapses in the audit report of Yes Bank and was thus banned for a
year.
KPR Mills
Auditing Firm - M/S B S R & Co. LLP, Chartered Accountants
M/s. B S R & Co is an auditing firm affiliated by KPMG. Company offers professional services across
auditing, accounting and tax planning services. They are the auditors of IMFL’s, textiles.
There have been a scrutiny in 2018 on the auditing firm, but they came out clean.
Rupa and Co.
Auditing Firm - Singhi and Co.
Singhi and Co. is a Mumbai based Chartered Accountancy firm. It is amongst the largest assurance
service providers in India. It’s been in the profession for over 70 years and has offices across major
cities in India.
The firm is an affiliate of Moore Stephens and provides the auditing and financial services to
companies across almost all sectors ranging from relatively small to large sized entities.
QUANTITATIVE ANALYSIS - FINANCIAL RATIOS

Liquidity Ratios
Current Ratio
Formula: Current Ratio = Current Assets / Current Liabilities
Measures the sufficiency of a firm’s funds provided by current assets, to meet demand from
current liabilities.
Observations:
-All three companies almost have the same current ratio’s and are better than the industrial average
- For Page Industries,the inventory contribution for the current assets is ~74% , which is over the
industrial avarage(44%).Adittionaly, the Accounts receivable is only around 13% well below the
industry average(33%).Therefore, Page Industries has been producing more than that it can sell and
stacking up in the inventory to increase the asset value & match the current ratio of its competitors.
-For Rupa & Co, their credit policy is assisting them to increase the accounts receivable more by 10%
than the industrial average(32%)therby, inflating the ratio.
2.5
1.5 Industry average

KPR Mill Ltd
1 Page Industried Ltd
Rupa & Co
0.5
0
2016 2017 2018 2019 2020
Quick Ratio
Formula: Quick ratio = Cash + marketable securities + accounts receivable/current liabilities
Measures the firm’s ability to meet current obligations even if its inventory cannot be
sold immediately.
Observations:
-The ratio drop seen in Page industries is well evident from the fact of high inventories in their
current assets.
-This is well supported by the other ratios like of inventory turnaround time which is lower than the
industry average and Inventory holding period which is higher than the industrial average.
-Higher liquidity, like in the case of KPR mills, is a measure of poor profitability as their cash reserves
are unutilized. Moreover, the profits generate by KPR is less than Page industries.
1.4
1.2
1 Industry average
KPR Mill Ltd
0.8 Page Industried Ltd Rupa & Co
0.6
0.2
0.4
0
2016 2017 2018 2019 2020
Solvency ratio
Debt to Equity Ratio
Formula: D/E ratio = Total Liabilities/Total assets
It is the relation of borrowed funds to the ownership funds
Observations:
-Of the three companies KPR has the highest D/E ratio (attributed by long term debts ~510 crores)
while Page industries have the lowest (attributed by lower debts and higher profit margin.)
-The D/E ratio for all 3 companies is well below the industrial average. It is the indication that the
companies have lesser long term debts compared to shareholders equity.
-Lower D/E ratio also indicates high profits as the shareholders capital increase against the long term
debt.
-Low D/E indicate that the company is operating with shareholders equity than with debt equity.
1.6
1.4
1.2
1
Industry average
0.8 KPR Mill Ltd
0.6 Page Industried Ltd

0.4 Rupa & Co
0.2
0
2016 2017 2018 2019 2020
Debt Service Coverage Ratio
Formula: DSCR ratio = Operating profits/Total debts
This is a ratio to ensure cash flow sufficient to cover loan payments is available on an ongoing basis.
Observations:
-The DSCR ratio for all three companies is the positive and well above the industrial average. This
indicates that the company’s operation can offset the loan payments and require no debt to carry on
the further operation.
-The high value of Rupa & Co. is due to the low debt.
160
140
120
100
80
Industry average
60
KPR Mill Ltd
40
Page Industried Ltd Rupa & Co
20
0
2016 2017 2018 2019 2020
Turnover Ratios
Asset turnover ratio:
Formula: Asset Turnover Ratio=Net Sales//Total Assets
Observations:
Asset turnover ratio is the ratio of the company’s sales to the value of its assets. It signifies the
efficiency with which the company is utilizing its assets to generate the revenue.
- The asset turnover ratio of Page Industries is highest among the three companies which clearly
indicates that Page Industries Ltd is utilizing its assets more efficiently to generate sales.
- The asset turnover ratios of KPR Mill Ltd. and Rupa & Co. are less than the industrial average which
clearly indicates that these two companies are not utilizing the assets properly and should consider
talking necessary steps to improve the asset utilization.
- Rupa & Co. need to focus on improving its asset utilization as ratio has been declining over the
years which clearly indicates that its sales are declining with respect to increase in assets.
Debtor’s turnover ratio and average collection period:
Formula: Debtor Turnover Ratio= Net Credit Sales / Average Accounts Receivables
Observations:
Debtors Turnover Ratio indicates the company’s effectiveness in collecting its trade receivables or
sales credits. It can also be interpreted as the company’s efficiency to convert credit sales into cash
and manage the credits issued to the customers.
-Page industries ltd. has the highest debtors turnover ratio of 29.81 which indicates that the
company is able to recover its sales credits from its clients successfully even during tough market
conditions.
-Page Industries Ltd has receivable turnover of 12 days which is way below any of its competitors
and industrial average.
-It can also be concluded that the Page Industry Ltd deals with a reliable client base and is able to
manage its funds well.
-It can also be observed that debtor’s turnover ratios of Rupa & Co. are below industrial average
which means that Rupa & Co. has to strategize its debt collection methods. Its receivable turnover is
approx. 4 months which is a problem.
-Although the debtors turnover ratio of KPR Mill Ltd. has declined over the years but it is still above
the industrial average of 4.35.
Inventory turnover ratio and inventory holding period
Formula: 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟 𝑟𝑎𝑡𝑖𝑜 = 𝐶𝑂𝐺𝑆

𝐶𝑂𝐺𝑆
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 = 𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 +𝐸𝑛𝑑𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
2
Observations:
It is often expressed as number of days that indicates the Inventory holding period. It is an estimate
of the average length of time items spent in inventory
Inventory turnover ratio is the indication of how fast inventory items move through a business.
Inventory Holding periods (days) = Average Inventory / (COGS / 365 days)
 KPR mills is more efficient in handling its inventory with holding period much lesser than the
industry average. This is mostly because it is vertically integrated business and that makes its
goods fast moving and also allows for lesser inventory stock. However, KPR inventory holding
period has increased significantly in the last two years but still below the industry average.
 Page industry inventory holding period is slowly improving since 2016 and was below the
industry average in 2019 and 2020. This is because, with increase in revenues, its COGS is
growing and that too with a faster rate than its average inventory.
 Rupa & Co has much higher inventory holding period than the industry average and least
efficient of the three in handling inventory. It maintains very lower inventory levels (about 50%
of other two) compared to the COGS (about 1/3 rd of the other two)
 Overall, this ties up with the fact that Rupa needs to spend comparatively more (7% of gross
sales) on advertising to keep its inventory moving, whereas Page Industries spend moderately
(4% of gross sales) on advertising and KPR spends almost none on advertising as it is vertically
integrated.
 The inventory holding period for the industry as a whole is on a rise since 2017 and highest in
2020 due to higher inventory hold-up during the pandemic lockdown. Rupa seems to be the
worst hit of the three with highest hold-up inventory of the three.
Creditor’s turnover ratio and average payment period:
Formula: 𝐶𝑟𝑒𝑑𝑖𝑡𝑜𝑟𝑠 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟 = 𝑃𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠 𝐶𝑂𝐺𝑆+𝐸𝑛𝑑 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦−𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦

𝐵𝑒𝑔𝑖𝑛𝑛𝑖𝑛𝑔 𝐴𝑃+𝐸𝑛𝑑𝑖𝑛𝑔 𝐴𝑃
2
=
Observations: 𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑐𝑐𝑜𝑢𝑛𝑡 𝑃𝑎𝑦𝑎𝑏𝑙𝑒
The creditors’ turnover is a short-term liquidity measure used to quantify the rate at which a
company pays off its suppliers.
It is often times expressed as number of days it takes the company to pay its accounts payable.
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝐴𝑐𝑐𝑜𝑢𝑛𝑡 𝑃𝑎𝑦𝑎𝑏𝑙𝑒
𝐴𝑣𝑒𝑟𝑎𝑔𝑒 𝑝𝑎𝑦𝑚𝑒𝑛𝑡 𝑝𝑒𝑟𝑖𝑜𝑑 (𝑑𝑎𝑦𝑠) = 𝑝𝑢𝑟𝑐ℎ𝑎𝑠𝑒𝑠
⁄
365 𝑑𝑎𝑦𝑠
 Average payment period for KPR Mill and Page Industries is much lower than the industry
averages indicate that they pay off their suppliers / vendors much faster. Page Industries is
close following the same. This is because both maintain similar levels of Accounts payable and
the purchases during the year.
 Rupa on the other hand, takes more time over the Industry average to pay off its
suppliers/vendors (FY17 is an exception). Rupa maintain slightly higher Accounts payable about
10-12% that the other two but has significantly less purchases about 40% of the other two.
 Average payment period rose sharply in FY18 for all, most probably due to the macroeconomic
effect of GST implementation.
Profitability Ratios
Gross Profit Margin
Gross Profit Margin is the ratio of gross profit and total sales. It signifies how much a profit a
company is making after manufacturing and selling its final products plus clearing the inventories.
Entities | FY’s 2020 2019 2018 2017 2016
Page 56.20% 55.50% 59.24% 57.38% 59.47%
KPR Mills 39.31% 41.32% 35.99% 38.73% 40.18%
Rupa Co 55.43% 55.68% 53.92% 55.31% 55.85%
Industry Average 46.55% 36.47% 37.77% 40.47% 42.41%
Observations:
-Gross Profit Margins for Page industries have been consistent over the years but there has been a
considerable drop is the last couple of years due to Liquidity worries, demand slowdown, and
competition
-GP for KPR mills has been fluctuating. For the last 2 years the fall and drop has been attributed to -
a) 2018-19 FY the operating results were driven by volume growth in most of the Segments,
supported by the expanded activities the Garment saw good traction
b) 2019-20 FY due to stagnated exports of yarn to china and the tariff advantage enjoyed by
other competing companies, India’s share has fallen. It’s the Garment segment which has
helped sustain the growth.
-Rupa has been seeing robust GPM YOY, even with fluctuations in revenue
-These companies (Inner wear segment) have a Gross profit Margin equal to or above the industry
ideal value, as they are recognised brands and thus charge a premium for their products with equal
to or slightly more cost of goods than the majority of the companies in the textile industry.
Net Profit Margin

Formula: NPM = Net profit ⁄ Net Sales
It is the ratio between net profit and net sales. Basically, it counts the profit after meeting all the
expenses like tax, interest and depreciation.
Entities | FY’s 2020 2019 2018 2017 2016
Page 11.62% 12.65% 13.79% 11.84% 12.30%
KPR Mills 9.27% 9.35% 8.70% 10.43% 7.79%
Rupa Co 7.72% 8.01% 8.59% 7.19% 7.15%
Industry Avg -7.71 -1.10% 1.80% 1.27% -0.91%
Observations:
-Total sales for Page industry has been increasing yoy with an exception in 2019-20, where the sales
declined. NPM has seen minor consistent decline due to substantial Employee cost increment YOY.
-The fluctuations in net profits are driven by the change in volume due to expansion of production
capacity, exports, and new product lines.
-The net profit margins has been dipping for Rupa because of its consistent increase in operating
expenses, irrespective of the growth or fall in sales
-The overall industry growth has been badly affected by the fall in exports. The comfort and inner
wear segment has however been performing well.
ROA- Return on Assets

Formula: Return on Asset= Net income/ total assets
Return on asset (ROA) shows the percentage of profit a company earns in relation to its overall
resources.
Entities | FY’s 2020 2019 2018 2017 2016
Page 34.13% 44.36% 37.24% 34.81% 36.63%
KPR Mills 24.45% 19.77% 24.81% 33.37% 23.38%
Rupa Co 10.29% 12.42% 15.20% 14.64% 13.54%
Industry Avg -4.66% -1.13% 2.01% 1.41% -0.95%
Observations:
-ROA for Page has been consistent, with a bump in FY 2018-19. This has been because of record
sales and high Net profits registered by the firm in the last 5 years and a steep reduction in current
investments in FY 2019.
-For KPR Mills, a substantial fall in ROA from FY 2017 to 2019 has been primarily because of the
constant increase in current account balance by close to 500%
-For Rupa & co., the ROA has been dipping over the past couple years as the assets have been
increasing in a bigger ratio than net profits
-Cash conversion efficiency, days of operating cycle, and days of working capital for the textile
industry is low in totality. Branded products on the other hand do better in this which can be
depicted by the industry Vs the firm figures.
Return on equity (ROE)

Formula: Return on Equity= Net Income/ Average Shareholders’ Equity
The amount of net income returned as a percentage of shareholders equity. Return on equity (also
known as "return on net worth" [RONW]) measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have invested.
ROE is expressed as a percentage and calculated as:
2016 2017 2018 2019 2020

Page Industries Ltd 0.5052 0.4454 0.4586 0.4857 0.4304
KPR Mill Ltd 0.1679 0.2272 0.1833 0.203 0.1954
Rupa & Co 0.2292 0.1908 0.1984 0.1719 0.1732
Industry average 0.176 0.1987 0.158 0.1476 0.1632
0.6
0.5 0.51 0.49 Page Industies

0.46 0.43 Ltd
0.4 0.45 KPR Mill Ltd
0.3
0.23 0.23 0.18 0.20 Rupa & Co
0.2 0.18 0.19 0.20 0.17 0.20
0.17
0.17 0.20 0.16 0.15 0.16 Industry average
0.1
0
2016 2017 2018 2019 2020
Observations:
-A high ROE indicates that the company is turning the cash put into business into greater gains and
growth both for the company and the investors.
-All 3 companies have ROE above industry average.
-Return on equity is useful for comparing the quality of different businesses. Companies that can
achieve high returns on equity without too much debt are generally of good quality.
-If two companies have around the same level of debt to equity, and one has a higher ROE, I’d
generally prefer the one with higher ROE.
-Debt to Equity ratio of Page is lowest whereas ROE is highest so Page is a preferred investment.
-Rupa has a debt to equity ratio of 0.26, which is far from excessive and ROE above industry
standard, indicating the business has decent prospects.
-Similarly for KPR Mill Ltd debt to equity is low and ROE is above industry average so decent
investment.
Earnings per share (EPS)

Formula: EPS= (Net Income-Preferred Dividends)/ Weighted Avg. Shares Outstanding
EPS is the portion of a company's profit allocated to each outstanding share of common stock.
Earnings per share serve as an indicator of a company's profitability.
EPS is calculated as:
2016 2017 2018 2019 2020

Page Industries Ltd 191.08 224.07 311.08 353.18 307.71
KPR Mill Ltd 38.97 32.26 30.44 39.84 42.81
Rupa & Co 9.23 9.69 11.88 11.73 10.05
400
350 353.18
300
311.08 307.71Page Industies
250
Ltd
224.07 KPR Mill Ltd
200 191.08
150
100
Rupa & Co
50
0 38.97 32.26 30.44 39.84 42.81
9.239.6911.88 11.73 10.05
2016 2017 2018 2019 2020
Observations:
-Shares of Page Industries slumped over 5% on the BSE after the net profit declined 14.59% to Rs 87
Cr. in the quarter ended December 2019 as against Rs101.89 Cr. during the previous quarter ended
December 2018.
-The sales of the company were up 7.5% to Rs793.80 Cr. in the quarter ended December 2019 as
against Rs738.32 Cr. during the previous quarter ended December 2018.
-This was because in 2019, Page industry adopted Ind-AS 115 accounting standard for revenue
recognition and the decision to discontinue segmental disclosures which has positive impact on
earnings but leaves investors worried.
-Rupa and KPR Mill have constant EPS and dividend pay-out is constant thus seems like company has
a constant growth.
MARKET VALUATION RATIOS
P/E RATIO
Industry average= 8.5

Formula: P/E RATIO= Market price per share/ Earnings per share
P/E RATIO
72.92 70.49
80 65.33
63.64
55.01
60
29.73 33.7 31.36

40 29.31
21.33 20.39 20.82
14.4 171.9.61
20
0
2016 2017 2018 2019 2020
Page Industries KPR MILLS Rupa & Co
Observations:
P/E Ratio for page industries is highest when compared to the PE ratio of KPR MILLS and Rupa and
Co which are in the range of 20-30. The higher P/E ratio of page industries indicates investor
confidence in the company and is, therefore, ready to pay a higher stock price compared to its
earnings and also concerning other industries. Reasons for the high investor confidence are:
Brand image: Jockey is a premium brand having pan India presence. Although the penetration rate of
jockey in men wear is 19-20% but in women wear it is still 5-6%, which shows the company has an
opportunity to grow and also premium innerwear market is growing in India. During the year 2019-
20, the Page industries through its authorized franchisees opened 150 Exclusive brand outlets. This is
an indicator of the growth potential of the Jockey brand. Also, the speedo brand has promising
growth potential. The company is continuously expanding and investing in new business units
thereby increasing investors’ confidence.
Future growth: Page Industries has the license to sell Jockey Originals US in India and they have this
license till 2040. So, the company has a strong and clear earnings visibility for the next 21 years. In
the last 2-3 years the sales growth as coming to 20% level. That is why its PE ratio has decreased.
Earlier this growth range was around 30% and that is why it has so rich valuations earlier.
Financial: It has the highest ROE when compared to KPR Mills and Rupa. High ROE means the
company is managing its shareholder equity well in generating sales. But again, the market price of
page industry has declined to owe to Ind-As 115 revenue recognition adoption. The company was
unable to clarify how its adoption leads to revenue growth which decreased investors’ confidence
and stock prices tumbled. But still stock is expensive.
Competitors: KPR mills PE Ratio is below the industry average of 8.5. It has declined by 45% on Mar
20 owing to a decrease in investors’ confidence. The EPS of KPR mill increased by 7% in March 2020
as compared to Mar 19 owing to an increase in net income. The decrease in PE shows the market is
worried about growth and is pessimist for now. Also, the company’s borrowings have increased
tremendously and sales have declined by 1.79% on March 20 compared to Mar 19. But KPR mills is
expanding its units and also increasing its processing capacity. Rupa PE is greater than the industry
average. However, the EPS of Rupa has declined by 14% on Mar 20 compared to Mar 19. Thus, EPS
growth has been undesirable for the company. Also, the net income and sales have declined on Mar
20 as compared to Mar 19. Thus, investors’ confidence is negative. But again, as the PE of Rupa is
greater than the industry average it seems investors are ignoring the recent poor growth rate and
hoping the situation to become better.
CSR and sustainability: It boost investors’ confidence.
P/BV RATIO
Formula: P/B RATIO= Market price per share/ Book value
Book value per common share= Asset- Liability/ No of shares outstanding
P/BV RATIO
40 35.83
35 29.86
30 25.6 24.53 23.03
25 "Page Industry"
20
"KPR Mills
15
10 5.97 54.8375 5.81 "Rupa & Co"
3.5 4.76
3.19 2.75 1.5458
5
0
2016 2017 2018 2019 2020
Book Value
759.64
800 735.05
694.81
700 596.9
600 475.05
500 Book Value Page Industries
400 260.36 Book Value KPR Mills
300 208.27 218.67
151.29 180.88
Book Value Rupa & Co
200 64.16 72.28 78.73
45.95 55.6
100
0
2016 2017 2018 2019 2020
Observations:
It helps investors to find undervalued companies as calculating this ratio unearth high growth
companies selling at low growth prices. It means that the stock price is in line with book value of the
company.
For page industries, P/B ratio is much higher than KPI mills and Rupa as the market price of stocks of
Page industries is much higher. Also, it shows that page industry stocks are overvalued relative to its
book value. The reason for overvalued is also because for page industries financial growth such as
ROE is much higher when compared to KPI mills and Rupa. The strong financials have page industries
that has increased investors' confidence.
The book value of Page Industry declined in FY 2019 owing to change in accounting principles and is
highest among KPR Mills and Rupa and Co.
EV/EBITDA
Formula: Enterprise value (EV) = (Market capitalisation+ Market value of Debt) – Cash and equivalent
EV/EBITDA
50 44.91
42.49
35.34 37.33
40 33.95
30 "Page Industry"
18.48 18.1 16.56 "KPR Mills"
20 15.77
11.26 11.24
9.49 8.72 "Rupa & Co
8.03
10 5.2
0
2016 2017 2018 2019 2020
EBITDA
654.31
700
600 563.2 544.44 557.75
500 472.77445.02 510.99
400 439.03
300 338906..0272 Page Industry
200 KPR Mills
100 175.31
147.4 144.51 169.45
0 132.52 Rupa & Co
2016 2017 2018 2019 2020
Observations:
As we have seen P/E ratio doesn’t take cash and debt into account. Debt and cash have a strong
impact on a company’s EV. An EV indicates how expensive or cheap a stock is based on the past and
expected cash flows. It helps an investor to take an appropriate decision considering the market
capitalization along with debt and cash positioning of the company. EV/EBITDA captures the payback
period of investment in the company i.e. the number of years needed to earn back the sum paid for
the company in the form of operating profits. Also, the role of market perception is much lesser in
EV/EBITDA
With concerted efforts to shift product mix towards high value add a segment, KPR was would be
able to command higher EBITDA. We see that the percentage increase in EBITDA was 22% in the
year 2019 but it declined by 6% in the year 2020. KPR has shown better % increase in EBITDA when
compared to the Page industry and Rupa & Co. However, EBITDA of the Page industry is the highest
which means the company has lower operating expenses and higher earnings, which shows that
after paying an operating cost, still a decent amount of revenue is left over by the Page industry.
The ratio of EV/EBITDA is highest for page industry which means the company is overly priced and its
stock price is high. KPR Mills and RUPA & Co have lower EV/EBITDA which attracts investors as the
stock price is less. the Higher payback period is unattractive for investors and thus higher EV/EBITDA.
BUY/SELL SHARES
Although Page industry have strong financials but its PE Ratio is still greater than industry average. It
is not advisable to buy stocks at such a premium price. The PE Ratio of KPI is below industry average
but with strong income generation capability its share can be bought. Also, investors’ confidence can
be increased with increased earnings. The Rupa shares are attractive to buy because of its low price
but due to bullish growth in the market investors’ confidence is negative.
APPENDIX
KPR MILL BALANCE SHEET
Company : K P R Mill Ltd

Industry : Textiles - Readymade Apparel
Company >> Finance >> Balance Sheet (Rs in Crs.)
Year Mar 16 Mar 17 Mar 18 Mar 19 Mar 20
SOURCES OF FUNDS :
Share Capital + 37.68 36.95 36.95 36.28 34.41
Reserves Total + 943.37 1,081.11 1,299.77 1,474.92 1,470.47
Equity Share Warrants 0 0 0 0 0
Equity Application Money 0 0 0 0 0
Total Shareholders Funds 981.05 1,118.06 1,336.72 1,511.20 1,504.88
Secured Loans + 589.87 490.82 346.23 653.67 471.78
Unsecured Loans + 0 0 0 0 0
Total Debt 589.87 490.82 346.23 653.67 471.78
Other Liabilities+ 0 0 0 0 0.07
Total Liabilities 1,570.92 1,608.88 1,682.95 2,164.87 1,976.73
APPLICATION OF FUNDS :
Gross Block + 1,864.21 1,151.37 1,202.67 1,224.74 1,395.19
Less : Accumulated Depreciation + 970.05 235.38 338.13 430.71 528.63
Less:Impairment of Assets 0 0 0 0 0
Net Block + 894.16 915.99 864.54 794.03 866.56
Lease Adjustment 0 0 0 0 0
Capital Work in Progress+ 0.34 2.08 0.1 4.41 5.79
Producing Properties 0 0 0 0 0
Investments + 78.06 88.29 90.53 79.87 89.97
Current Assets, Loans & Advances
Inventories + 266.32 306.68 391.34 729.34 494.37
Sundry Debtors + 259.65 213.38 324.19 468.3 351.27
Cash and Bank+ 18.58 28.08 27.41 66.77 147.04
Loans and Advances + 121.9 165.14 159.4 185.7 189.35
Total Current Assets 666.45 713.28 902.34 1,450.11 1,182.03
Less : Current Liabilities and Provisions
Current Liabilities + 100.12 131.74 189.86 165.26 160.04
Provisions + 0.72 4.09 0.06 10.47 3.16
Total Current Liabilities 100.84 135.83 189.92 175.73 163.2
Net Current Assets 565.61 577.45 712.42 1,274.38 1,018.83
Miscellaneous Expenses not written off + 0 0 0 0 0
Deferred Tax Assets 1.37 0 0 0 0
Deferred Tax Liability 60.04 55.54 57.5 56.61 47.27
Net Deferred Tax -58.67 -55.54 -57.5 -56.61 -47.27
Other Assets+ 91.42 80.61 72.86 68.79 42.85
Total Assets 1,570.92 1,608.88 1,682.95 2,164.87 1,976.73
Contingent Liabilities+ 130.58 99.78 143.06 129.11 47.86
PAGE INDUSTRIES BALANCE SHEET
Company : Page Industries Ltd

SOURCES OF FUNDS :
Share Capital + 11.15 11.15 11.15 11.15 11.15
Reserves Total + 518.72 654.63 836.15 763.84 808.73
Total Shareholders Funds 529.87 665.78 847.3 774.99 819.88
Secured Loans + 94.9 87.68 68.55 84.78 38.05
Unsecured Loans + 0 0 0 0 138.33
Total Debt 94.9 87.68 68.55 84.78 176.38
Other Liabilities+ 7.71 11.57 13.09 9.33 9.21
Total Liabilities 632.48 765.03 928.94 869.1 1,005.47
Gross Block + 240.8 276.43 304.85 398.24 536.43
Net Block + 216.68 236.09 237.94 300.63 405.53
Capital Work in Progress+ 0.36 24.13 58.52 7.23 28.73
Investments + 0 52.11 218.03 0 0
Inventories + 540.81 622.86 567.87 750.11 718.57
Sundry Debtors + 102.44 112.71 147.98 123.84 73.78
Cash and Bank+ 8.65 20.58 66.88 44.05 116.92
Total Current Assets 683.65 781.06 837 1,004.81 1,014.54
Provisions + 33.85 34.42 45.65 19.85 33.01
Net Current Assets 377.97 403.15 364.53 535.85 507.28
Deferred Tax Assets 9.95 11.48 12.08 12.59 18.41
Net Deferred Tax -7.91 -11.15 -10.98 -12.53 -0.2
Other Assets+ 45.37 60.7 60.89 37.92 64.14
Total Assets 632.47 765.03 928.94 869.1 1,005.48
RUPA & COMPANY BALANCE SHEET
Company : Rupa & Company Ltd

SOURCES OF FUNDS :
Share Capital + 7.96 7.96 7.96 7.96 7.96
Reserves Total + 357.95 434.81 502.97 567.59 618.97
Total Shareholders Funds 365.91 442.77 510.93 575.55 626.93
Secured Loans + 148.26 33.88 110.66 175.67 138.83
Unsecured Loans + 0 50 0 0 0
Total Debt 148.26 83.88 110.66 175.67 138.83
Other Liabilities+ 0 0.37 1.01 0.83 8.89
Total Liabilities 514.17 527.02 622.6 752.05 774.65
Gross Block + 229.51 171.54 183.5 211.4 231.19
Net Block + 152.93 156.51 154.07 169.08 173.3
Capital Work in Progress+ 8.78 0 8.48 3 6.37
Investments + 4.13 8.22 14.13 14.02 63.71
Inventories + 299.91 288.48 312.52 351.18 441.85
Sundry Debtors + 172.14 207.02 328.62 370.22 230.17
Cash and Bank+ 6.48 10.38 6.4 6.06 1.37
Total Current Assets 492.69 531.82 707.27 758.39 725.87
Provisions + 4.91 10.22 18.74 10.41 3.24
Net Current Assets 344.12 360.86 449.1 524.83 517.68
Deferred Tax Assets 0.07 0.73 0.91 1.13 1.02
Net Deferred Tax -14.57 -13.47 -13.23 -13.73 -9.25
Other Assets+ 18.78 14.9 10.05 54.85 22.85
Total Assets 514.17 527.02 622.6 752.05 774.65
KPR MILL INCOME STATEMENT
Company : K P R Mill Ltd

Company >> Finance >> Profit & Loss (Rs in Crs.)
Year Mar 16 (12) Mar 17 (12) Mar 18 (12) Mar 19 (12) Mar 20 (12)
INCOME :
Sales Turnover + 1,961.27 2,219.14 2,512.23 2,978.53 2,898.07
Excise Duty 0 0 0 0 0
Net Sales 1,961.27 2,219.14 2,512.23 2,978.53 2,898.07
Other Income + 34.21 27.12 15.98 37.37 36.46
Stock Adjustments + 6.01 36.14 45.13 50.28 183.7
Total Income 2,001.49 2,282.40 2,573.34 3,066.18 3,118.23
EXPENDITURE :
Raw Materials + 1,197.23 1,398.48 1,647.09 1,799.14 1,892.40
Power & Fuel Cost+ 127.21 91.35 104.12 130.67 124.69
Employee Cost + 149.42 194.13 233.05 373.41 383.25
Other Manufacturing Expenses + 89.58 70.94 83.14 110.34 88.48
COST OF PRODUCTION 1687.28 1872.33 2172.37 2509.39 2587.73
COST OF PRODUCTION % of Revenues 86% 84% 86% 84% 89%
Selling and Administration Expenses + 39.02 44.42 48.39 88.37 91.29
SELLING & ADMINISTRATION % of Revenu 2% 2% 2% 3% 3%
Miscellaneous Expenses + 8.81 10.31 12.53 19.81 27.13
Less: Pre-operative Expenses Capitalised+ 0 0 0 0 0
Total Expenditure 1,611.27 1,809.63 2,128.32 2,521.74 2,607.24
Operating Profit 390.22 472.77 445.02 544.44 510.99
Interest + 44.42 45.03 30.49 35.86 35.41
Finance Cost % of Revenues 2% 2% 1% 1% 1%
Gross Profit 345.8 427.74 414.53 508.58 475.58
Depreciation+ 123.84 117.43 104.97 95.83 98.91
Profit Before Tax 221.96 310.31 309.56 412.75 376.67
Tax+ 67.19 75.02 82.63 124.53 91.4
Tax % of Revenues 3% 3% 3% 4% 3%
Fringe Benefit tax+ 0 0 0 0 0
Deferred Tax+ -1.37 -3.13 1.96 -0.89 -9.34
Reported Net Profit 156.14 238.42 224.97 289.11 294.61
PAT 8% 11% 9% 10% 10%
Extraordinary Items + 0.32 0.41 1.07 2.46 5.57
Adjusted Net Profit 155.82 238.01 223.9 286.65 289.04
Adjst. below Net Profit + 0 -96.91 -1.07 -108.52 -262.51
P & L Balance brought forward 500.47 564 677.15 884.55 1,059.03
Statutory Appropriations 0 0 0 0 0
Appropriations + 92.61 28.36 16.5 6.11 38.42
P & L Balance carried down 564 677.15 884.55 1,059.03 1,052.71
Dividend 33.91 5.54 5.54 0 25.8
Preference Dividend 0.6 0 0 0 0
Equity Dividend % 100 15 15 15 90
Dividend Per Share(Rs) 10 0.75 0.75 0.75 4.5
Earnings Per Share-Unit Curr 38.97 32.26 30.44 39.84 42.81
Earnings Per Share(Adj)-Unit Curr 19.49 32.26 30.44 39.84 42.81
Book Value-Unit Curr 260.36 151.29 180.88 208.27 218.67
Book Value(Adj)-Unit Curr 130.18 151.29 180.88 208.27 218.67
PAGE INDUSTRIES INCOME STATEMENT
Company : Page Industries Ltd

INCOME :
Sales Turnover + 1,796.24 2,130.46 2,552.03 2,852.20 2,945.42
Excise Duty 0.64 1.93 0.66 0 0
Net Sales 1,795.60 2,128.53 2,551.37 2,852.20 2,945.42
Other Income + 9.82 24.34 21.55 36.43 24.64
Stock Adjustments + 77.64 96.42 -63.88 160.03 -17.56
Total Income 1,883.06 2,249.29 2,509.04 3,048.66 2,952.50
EXPENDITURE :
Raw Materials + 763.27 958.71 1,022.71 1,356.73 1,293.26
Power & Fuel Cost+ 10.63 11.77 13.46 15.74 15.55
Employee Cost + 312.69 375.62 406.53 466.81 531.7
Total Expenditure 1,496.99 1,810.26 1,945.85 2,394.35 2,394.75
Interest + 18.86 19.49 17.7 17.22 34.39
Gross Profit 367.21 419.54 545.5 637.09 523.36
Depreciation+ 24.12 24.72 27.99 31.06 61.36
Profit Before Tax 343.09 394.82 517.51 606.03 462
Tax+ 112 124.5 169.1 204.23 117.4
Deferred Tax+ -0.43 4.04 1.43 7.86 1.39
PAT 13% 12% 14% 14% 12%
Extraordinary Items + -0.15 -0.04 1.05 8.42 0.01
Adjst. below Net Profit + -1.23 -6.95 -8.7 -53.02 -26.72
P & L Balance brought forward 281.98 403.53 539.44 720.96 648.65
Appropriations + 108.74 123.43 156.76 413.23 271.62
P & L Balance carried down 403.53 539.44 720.96 648.65 693.53
Dividend 68.04 80.31 146.12 377 225.31
Preference Dividend 0 0 0 0 0
Equity Dividend % 850 970 1,310.00 3,440.00 1,610.00
Dividend Per Share(Rs) 85 97 131 344 161
RUPA & COMPANY INCOME STATEMENT
Company : Rupa & Company Ltd

INCOME :
Sales Turnover + 1,013.03 1,084.30 1,089.76 1,108.24 941.4
Excise Duty 0 0 0 0 0
Net Sales 1,013.03 1,084.30 1,089.76 1,108.24 941.4
Other Income + 16.07 3.4 3.42 5.39 7.91
Stock Adjustments + -55.29 -14.58 8.21 52.97 83.33
Total Income 973.81 1,073.12 1,101.39 1,166.60 1,032.64
EXPENDITURE :
Raw Materials + 429.9 479.57 507.5 517.09 460.26
Power & Fuel Cost+ 11 12.37 14.24 14.66 13.71
Employee Cost + 29.54 35.04 39.02 45.11 55.2
Total Expenditure 826.41 928.61 931.92 991.29 900.12
Interest + 18.76 10.55 7.59 16.73 14.81
Gross Profit 128.64 133.96 161.86 158.58 117.71
Depreciation+ 15.17 15.05 14.41 13.17 15.68
Profit Before Tax 113.47 118.91 147.45 145.41 102.03
Tax+ 35.91 42.66 53 51.55 26.47
Deferred Tax+ -0.39 -0.9 -0.16 0.48 -4.5
PAT 8% 7% 9% 8% 9%
Extraordinary Items + 8.31 0.01 -0.02 -0.03 0.35
Adjst. below Net Profit + 0 0 -4.58 -4.89 -4.83
P & L Balance brought forward 194.59 246.54 323.69 391.85 456.48
Appropriations + 26.32 0 21.87 23.86 23.86
P & L Balance carried down 246.22 323.69 391.85 456.48 507.85
Dividend 21.87 21.87 23.86 0 0
Preference Dividend 0 0 0 0 0
Equity Dividend % 275 275 300 300 300
Dividend Per Share(Rs) 2.75 2.75 3 3 3

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FINANCIAL ANALYSIS OF

2|Apparel Industry -Undergarment Sector

 Presence of complete value chain from fiber to fashion

 Abundant Availability of Raw Material

 Comparatively low cost of Manpower

 Large and Growing Domestic Market

 Availability of Ready Infrastructure

3|Apparel Industry -Undergarment Sector

 Centre and State Level Support

4|Apparel Industry -Undergarment Sector

MACROECONOMIC FACTORS AFFECTING UNDERGARMENT SECTOR IN APPAREL INDUSTRY

5|Apparel Industry -Undergarment Sector

MAJOR PLAYERS IN THE TEXTILE - READYMADE APPAREL INDUSTRY

6|Apparel Industry -Undergarment Sector

7|Apparel Industry -Undergarment Sector

Key Activities Key Partners

Trend watching Textile suppliers

8|Apparel Industry -Undergarment Sector

COST AND PROFIT STRUCTURE

9|Apparel Industry -Undergarment Sector

PORTER’S FIVE FORCES ANALYSIS

Page industries Sustainability Goal

Stakeholder Engagement: Stakeholder engagement is critical for an efficient and comprehensive

Sustainability target of Page Industry

KPR Mills Sustainability Report

Report consist of following:

RUPA & CO. Sustainability Report

CSR- CORPORATE SOCIAL RESPONSIBILITY

Page Industry CSR

An Integrated Education and Child Development Program and

An Initiative for Youth Development During the year under review,

Rupa & Co. CSR

KPR Mill CSR:

CORPORATE GOVERNANCE OVERVIEW

Overview of Board of Directors and Independent Directors

Number of Board of Directors

Years Page KPR Mill Rupa

Percentage of Independent Directors

Years Page KPR Mill Rupa

Background of Independent Directors

Designation and Remuneration (Amount Lakhs)

2019,2018,2017,2016 respectively. A fixed remuneration is provided to both the executive directors

Page Industries (Amount in Lakhs)

KPR Mills (Amount in Lakhs)

Rupa and Co. (Amount in Lakhs)

QUALITY OF THE AUDITORS

Auditing firm - S.R. Batliboi & Associates LLP

Auditing Firm - M/S B S R & Co. LLP, Chartered Accountants

Rupa and Co.

Auditing Firm - Singhi and Co.

QUANTITATIVE ANALYSIS - FINANCIAL RATIOS

Formula: Current Ratio = Current Assets / Current Liabilities

1.5 Industry average

Formula: Quick ratio = Cash + marketable securities + accounts receivable/current liabilities

Debt to Equity Ratio

Formula: D/E ratio = Total Liabilities/Total assets

It is the relation of borrowed funds to the ownership funds

0.8 KPR Mill Ltd

0.6 Page Industried Ltd

Debt Service Coverage Ratio

Formula: DSCR ratio = Operating profits/Total debts

Formula: Asset Turnover Ratio=Net Sales//Total Assets

Debtor’s turnover ratio and average collection period: