Heads UP Ventures Chairman Speech
BSE:540210 | NSE:HEADSUPEQ | IND:Retail - Apparel/Accessories | ISIN code:INE759V01019 | SECT:Retail
BSE
Change:
Volume:
Open:
Prv. Close:
Bid:
()
Offer:
()
NSE
Change:
Volume:
Open:
Prv. Close:
Bid:
()
Offer:
()
Dear Shareholder''s,
The Gross Domestic Product (GDP) growth rate was lower at 6.7% and that impacted your Company’s business. At micro industry level, the competition was intense with ‘market share at any cost’ strategies employed by global entrants in the market. The combative market participants advanced the end of season sale dates and the duration of such sales also increased. This meant larger proportion of volumes were sold at discounted prices. Despite competitive intensity, the Company volumes grew by 11% in domestic market and by 15% in exports.
This represents domestic market growth rate at 1.65 times the GDP growth rate (6.7%) and 1.2 times the rate forecast (9%) for the apparel industry by experts. And this signals steadily increasing market penetration for the Company brand which is good news indeed.
Higher discounts affected the revenue growth with a marginal reduction of 0.05% in revenue over last year. Company revenues for the year stood at C259.44 crores. The Company management had to contend with supply chain problems; inadequate working capital took its toll delaying the new season supplies to the stores. Needless to say the Company missed selling opportunities during some crucial days of the season. The pressure on net realisations due to higher discounts was exacerbated by some significant increase in employee costs. The Company has suffered significant drop in EBITDA margins this year under review. Your board and the management is working to rectify structural issues within the organisation as well as with working capital finances.
THE MARKET AND THE CONSUMER
By all accounts, the long-term trends in the Indian apparel market continue to be positive. The market is expected to grow between 9-10% on CAGR basis to year 2020. Increase in personal incomes, higher aspirational levels in Tier II, III and IV towns and all round growth in consumerism will continue to drive the growth in apparel market. However, the segments within display differential growth rates. The product segments where your Company always had significant offerings namely denim wear and T-shirts for men continue to be high growth market segments expected to continue to grow at 14%. Active wear market has emerged as a high potential category due to the boom in fitness and healthcare related consumption. Your Company is well placed in this segment due to its association with Mr. Salman Khan who is universally followed for his fitness and sculpted physique. While these are broad trends, the market is given to rapidly changing styles and preferences.
Your management has evolved a market sensing system that will keep the Company product portfolio in sync with changes and capitalise on them.
LAUNCH OF ‘CORE LINE’
Your Company during the year has formulated the ‘Core Line’ design concept. ‘Core Line’ has a simple design elements that can be assembled into basic products that can be offered year round at multiple price points. This will enable moderation in discounting and result in better inventory turnarounds. Your management expects the ‘Core Line’ to account for 1/4th of Company volumes in near future. ‘Core Line’ will be launched within next 45 days.
GOING DIGITAL
By all accounts e-commerce is going to be very influential channel for retail. According to Boston Consulting Group (BCG), a consultancy, fashion is the first category that most Indians (28%) buy online; mobile phones follow at 20%. This message is not lost on your management. BCG study shows that 50% of those who buy fashion online are from Tier II and smaller cities, a geography that is of strategic importance to Company products. Nearly 2/3rd of online buyers are below the age of 35 according to BCG and that is precisely the Company’s current target segment. Your Company therefore has been expanding its online retail by tying up with online retailers like Cloud Tail and Jabong. Company is readying a new line of apparels that will be exclusively sold online. At opportune time in future the Company may launch its own platform for online sales. I assure you that there are many such exciting ideas on the drawing board.
LICENCE AGREEMENT
The licence arrangement with Being Human Foundation is the core asset of the Company. The Company management in active collaboration with the Foundation Trustees has nurtured this brand assiduously. I, on behalf of the board, acknowledge inspired contribution made by Mrs. Alvira Agnihotri, the head of the Foundation, towards building the brand and the market for ‘Being Human’ clothing line. Licence fees that the Company pays has been one of the sources for the Foundation to carry out its singularly philanthropic work in the area of education and health. The licence agreement will be renewed well before its current term that lasts up to March 2020.
THE TEAM
Dynamic young team is one of the core strengths of your Company. The team is focused and has a great eye for aesthetics and detail. Some of you who have visited Company outlets must have noticed the distinct look and feel of its decor. The earthy and intimate look and feel is the design work of young Karan Berry and his in-house team. The team is working on new scheme that is economical, adjusts to smaller spaces without losing customer intimacy and appeal.
I must also mention here that Mr. Hemant Gupta has recently joined as the Chief Financial Officer and Chief Operating Officer. Young Hemant brings with him a decade and more of experience with branded retail with companies such as Blackberry and Carrefour. He will bring intensity of youth and sharpness of experience to husband the operations that are getting larger and complex by the day. I welcome him and look forward to a robust and rewarding association.
YEAR AHEAD
There is good news on the national economy. The latest quarterly numbers show GDP growth at 7.7%, so far the highest in last 4 years. This will lead to higher personal incomes and private consumption. The Government has promised remunerative minimum support prices to farmers. These flows will course through the economy creating solid demand for apparels. Your management has lined up new products and new product lines I mentioned earlier. The management team is working vigorously to make up the gaps in working capital that affected deliveries last year.
This together with selective and well calibrated expansion of geographic footprint in Tier II and smaller cities, the Company hopes to achieve robust growth in volumes and retrieve the lost ground in revenue and margins. The management is also regrouping initiatives in export markets. The increasing current account deficit is a boon in a way since resulting depreciation of Indian rupee will help boost exports. All in all, we look forward to a good year.
I take this opportunity to thank all stakeholders including the Being Human Foundation and marquee investors who have continued to repose confidence in your Company.
PRADIP DUBHASHI
Nifty 50 Stocks
- Titan Company Share Price
- Divi's Laboratories Share Price
- LTIMindtree Share Price
- ITC Share Price
- Bharat Petroleum Corporation Share Price
- Wipro Share Price
- Hero MotoCorp Share Price
- Hindalco Industries Share Price
- Apollo Hospitals Enterprise Share Price
- State Bank of India Share Price
- Tata Steel Share Price
- Sun Pharmaceutical Industries Share Price
- Shriram Finance Share Price
- Asian Paints Share Price
- UltraTech Cement Share Price
- NTPC Share Price
- JSW Steel Share Price
- Eicher Motors Share Price
- Hindustan Unilever Share Price
- IndusInd Bank Share Price
- HDFC Bank Share Price
- SBI Life Insurance Company Share Price
- Axis Bank Share Price
- Power Grid Corporation of India Share Price
- Dr. Reddy's Laboratories Share Price
- Adani Enterprises Share Price
- Tech Mahindra Share Price
- Reliance Industries Share Price
- Oil And Natural Gas Corporation Share Price
- Tata Consumer Products Share Price
- ICICI Bank Share Price
- Cipla Share Price
- Adani Ports & Special Economic Zone Share Price
- Grasim Industries Share Price
- Infosys Share Price
- Coal India Share Price
- Bajaj Auto Share Price
- Tata Consultancy Services Share Price
- Maruti Suzuki India Share Price
- Mahindra & Mahindra Share Price
- Kotak Mahindra Bank Share Price
- Tata Motors Share Price
- Bharti Airtel Share Price
- HCL Technologies Share Price
- Bajaj Finserv Share Price
- HDFC Life Insurance Company Share Price
- Larsen & Toubro Share Price
- Bajaj Finance Share Price
- Britannia Industries Share Price
- Nestle India Share Price
Top Gainer Stocks
- Gujarat Fluorochemicals Share Price
- JM Financial Share Price
- Caplin Point Laboratories Share Price
- KEC International Share Price
- Craftsman Automation Share Price
- Cholamandalam Financial Holdings Share Price
- Laurus Labs Share Price
- Sunteck Realty Share Price
- Zomato Share Price
- Concord Biotech Share Price
Top Loser Stocks
- CCL Products India Share Price
- Prestige Estates Projects Share Price
- PCBL Share Price
- Oil India Share Price
- Raymond Share Price
- Amara Raja Energy & Mobility Share Price
- Garden Reach Shipbuilders & Engineers Share Price
- Mazagon Dock Shipbuilders Share Price
- Chambal Fertilisers & Chemicals Share Price
- Torrent Power Share Price
Most Searched Stocks
- Indian Railway Finance Corporation Share Price
- One97 Communications Share Price
- YES Bank Share Price
- ITC Share Price
- HDFC Bank Share Price
- Tata Motors Share Price
- Zomato Share Price
- Adani Enterprises Share Price
- Infosys Share Price
- Reliance Industries Share Price
- Adani Power Share Price
- Vedanta Share Price
- Indian Renewable Energy Development Agency Share Price
- NHPC Share Price
- State Bank of India Share Price
- Rail Vikas Nigam Share Price
- Life Insurance Corporation of India Share Price
- Tata Steel Share Price
- Tata Consultancy Services Share Price
- Tata Power Company Share Price
- Wipro Share Price
- Adani Green Energy Share Price
- Indian Railway Catering & Tourism Corporation Share Price
- Suzlon Energy Share Price
- Punjab National Bank Share Price
- Hindustan Aeronautics Share Price
- Jio Financial Services Share Price
- NBCC (India) Share Price
- Bharat Heavy Electricals Share Price
- Polycab India Share Price
- SJVN Share Price
- IDFC First Bank Share Price
- ICICI Bank Share Price
- Tata Technologies Share Price
- Central Depository Services (India) Share Price
- Ircon International Share Price
- Jaiprakash Power Ventures Share Price
- MRF Share Price
- Power Finance Corporation Share Price
- Delta Corp Share Price
- Steel Authority of India (SAIL) Share Price
- Indian Oil Corporation Share Price
- Affle (India) Share Price
- Bajaj Finance Share Price
- Asian Paints Share Price
- Avenue Supermarts Share Price
- Indian Energy Exchange Share Price
- REC Share Price
- HDFC Asset Management Company Share Price
- Vodafone Idea Share Price
- Housing and Urban Development Corporation Share Price
- Reliance Power Share Price
- Adani Total Gas Share Price
- Bank of Baroda Share Price
- Birlasoft Share Price
Quick Links
Heads UP Ventures Ltd. Quick Links
Cash Flow Statement
Half Yearly Results
Capital Structure
Chairman's Speech
Company History
Locations
Dividends
Splits
Competitors
Date Sources:Live BSE and NSE Quotes Service: TickerPlant | Corporate Data, F&O Data & Historical price volume data: Dion Global Solutions Ltd.
BSE Quotes and Sensex are real-time and licensed from the Bombay Stock Exchange. NSE Quotes and Nifty are also real time and licenced from National Stock Exchange. All times stamps are reflecting IST (Indian Standard Time).
By using this site, you agree to the Terms of Service and Privacy Policy.