| Established brand presence and extensive industry experience of the promoters
The promoters of LTKPL were associated with J G Hosiery Private Limited for over two decades, which has enabled them to establish and maintain long-standing and healthy relationships with key suppliers across the value chain. In order to further strengthen brand visibility and enhance consumer recall, the management has appointed Bollywood actor Mr. Tiger Shroff as the brand ambassador for its innerwear products. Additionally, the company has been increasingly focusing on expanding the ‘Hint’ brand into newer states. Given its relatively premium positioning compared to Macho, this strategic brand expansion is expected to support improvement in profitability margins over the medium term.
Improving Scale of Operations & Profitability
The company’s revenue from operations registered a growth of 14.52%, increasing to Rs. 690.25 crore in FY 2025 from Rs. 602.72 crore in FY 2024. This is mainly due to increase in volume sold as per well marginal increase in average realization in FY 2025 against the previous year. The operating profitability improved, with the operating margin increasing by 177 bps to 8.31% in FY 2025 as against 6.54% in FY2024. The increase is mainly due to modest pricing improvement, higher volumes, led to better absorption of fixed costs such as factory overheads, employee costs, and administrative expenses. Although, the net profit margin witnessed deterioration, standing at 1.91% in FY 2025 as against 2.34% in FY 2024 due to increase in interest & finance charges. As per Year to End financials, the company booked net revenue of Rs. 695 crore till 31st March 2026. Acuite believes that the group’s scale of operations and profitability are likely to improve over the near to medium term, driven by an expected increase in sales volumes with stabIlization in price realizations.
Comfortable Financial Risk Profile
The financial risk profile of the company is comfortable marked by improving net worth, gearing below unity and comfortable debt protection metrices. The tangible net worth of the company improved & stood at Rs. 296.24 Cr. as on March 31, 2025, as compared to Rs. 176.46 Cr. as on March 31, 2024. The improvement is mainly due to accretion of profits into reserves and treatment of unsecured loans as quasi equity. The gearing ratio & TOL/TNW of the company improved & stood at 0.79 & 1.37 times for FY 25 against 0.96 & 1.75 times for FY 24 respectively. The debt protection metrices i.e. DSCR & ISCR stood comfortable at 1.55 & 1.81 times for FY 25. ROCE improved & stood at 11.49% in FY 25 against 10.65% in FY 24. Acuite believes that going forward, the financial risk profile of the company will remain at same level on the account of ongoing debt funded capital expenditure.
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| Intensive Working Capital Operations
The company’s working capital operations remain intensive, as reflected in elevated Gross Current Asset (GCA) days of 267 days in FY2025, compared to 233 days in FY2024. The increase was primarily driven by a sharp rise in debtor realisation days to 172 days in FY2025 from 131 days in FY2024. Debtor days are structurally high for hosiery companies due to the multi-tier distribution structure, extended credit period to distributors, wide geographical presence, long-standing dealer relationships, a large SKU base, and scheme-linked incentives; however, these factors have not materially impacted credit discipline. On the positive side, the inventory holding period improved significantly to 64 days in FY2025 from 85 days in FY2024, reflecting better inventory management. Consequently, the working capital cycle stood at 104 days in FY2025. Acuite believes that notwithstanding some operational efficiencies, the company’s working capital requirements are expected to remain intensive over the medium term, given the inherent nature of operations in the hosiery industry.
Profitability remains susceptible to volatility in raw material prices
Profitability in the hosiery industry remains vulnerable to volatility in raw material prices, particularly cotton yarn and synthetic fibres, which constitute a significant portion of total input costs. Given the highly competitive and price-sensitive nature of the hosiery segment, the ability to fully pass on sudden increases in input costs to end customers remains limited, especially in the mass and mid-premium categories. Consequently, any sharp or sustained rise in raw material prices may exert pressure on operating margins, particularly in the near to medium term.
Intensive Competition in the Hosiery Industry
The hosiery industry remains highly competitive and fragmented, characterised by the presence of a large number of players in the unorganised segment, which continues to dominate the overall market. Within the organised segment, the company faces competition from established branded players such as Dollar, Lux, and Rupa, among others. Nevertheless, this competitive risk is partly mitigated by the company’s strong brand recall, extensive distribution network, and pan-India reach, which support market positioning and customer retention.
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