Rupa says likely to enter licensing tie-up with int'l brand

In an interview with CNBC-TV18, Ramesh Agarwal, Whole-time Director of innerwear firm Rupa & Co, discussed the company's growth outlook going forward as well as an impending brand licensing tie-up that the company is likely to undertake with a global company soon.Below is the transcript of Ramesh Agarwal’s interview with CNBC-TV18's Ekta Batra and Mangalam Maloo.Mangalam: What has been the growth in terms of volume as well as value in the last nine months where we have seen a 10 percent growth in your top line?A: It is around 11 percent growth. So, the volume would be around 7 percent and value growth will be around four percent. So, around 10.8 percent growth.Ekta: So, can you maintain that for the next couple of months, what would your guidance be in terms of volume and value?A: We hope to maintain this pace or maybe slightly exceed this but this pace should be maintained.Ekta: So, when you talk about exceeding it what would it possibly go up to, what would your range be?A: Maybe by a percent point or something but if we maintain this we are also okay with it.Ekta: So, a combination of volume and value growth should be around 11-12 percent odd in the near term?A: Yes.Mangalam: We also saw a goodish bit of expansion on your margins in the last quarter. So, could you give us a sense of what proportion of your revenue actually comes in from your premium products and what are your margins there?A: The premium product contributes around 20 percent of revenue and now we have a gross margin of around 29-30 percent. So, when you look at only the premium part of it, it should be around 50 percent but since the contribution to the overall sales is less the overall sales figure comes to 29 percent.Mangalam: So, on a blended basis what is your realisation per unit that you sell?A: It is around Rs 54 at the wholesale price, not at the retail price.Ekta: How are your exports doing? We understand you export to around 12-13 odd countries. When you talk about realisations what might the difference be between your domestic and export realisations and at this point what is the growth rate?A: You cannot compare export realisation with the local. Export realisations are obviously better but since the contribution of export is very less we have started our focus on exports for the last three years and the growth has been good. So, next two years we should see a sizeable increase in the export turn over.Ekta: So, when you talk about good how much of an incremental increase do you expect and how much is it right now?A: Almost it is flat for the last two years. It is around Rs 21 crore. So, it is nothing as percent terms of turnover, two percent only. But then at least in the next two years we should be around 5-6 percent of the turnover Forex goods.Mangalam: Now your stock is up about 13 percent. Could you apprise us of any impending tie up or acquisition that might be taking place going forward any foreign brands or something that you are collaborating with?A: Yes, we are at a very mature stage of getting a brand license of a very famous international brand. In the next month maybe we will announce something.Ekta: Would that mean you would be opening standalone retail stores of that particular licensed brand?A: It would be a mix of everything. We would be distributing, we would be opening standalone stores and we would also be into large formats.Ekta: What might the contribution be according to you and maybe in the contours of what your revenue share would be?A: It is too early to say but then we are eyeing a good percent like in the next 3-4 years for the brand to grow we have to give it sufficient time but we see a good sizeable contribution.Mangalam: Any financial colour that you can give us on that brand?A: It is too early to comment on that because by next month we should make an announcement.Mangalam: Is it an American brand?A: No, it is a European brand.