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We just like the continued outperformance in Kewal Kiran Clothes Ltd.’s Killer franchise and the visibly greater aggression in the direction of retail enlargement on this format.
Regardless that significant enchancment (18% YoY versus 9% YoY in Q2 FY23) in realisation is encouraging (advantages of worth hikes and blend enchancment), underperformance in volumes (down 2% YoY versus 18% in Q2 FY23) is a matter of concern.
We perceive that the worth hikes executed by Kewal Kiran (particularly in denims, which account for ~50% of gross sales) have been aggressive (decrease than the highest competitors, e.g. Levis, Pepe, and many others.).
Consequently, working margins had been impacted (gross margin stays beneath pre-Covid ranges). Nonetheless, we imagine this example may even allow Kewal Kiran to realize market share from the competitors.
Growth of unique model retailers continues to be aggressive (~28-30% progress) primarily led by the Killer model. Working margins remained wholesome throughout the quarter.
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