Ludhiana (India)-based Monte Carlo Fashions has posted a robust Q3 FY18 performance. The company’s sales grew by 23%,at Rs 356 crore, EBITDA at Rs 80 crore was up by 52% YoY on a low base. It reported PAT of Rs 48 crore, which grew to 41% YoY.
Significantly, the company posted an EPS of 31.55 in 9MFY18, which shows the highest of 27.5 in FY15.
Past two years proved difficult for Monte Carlo. A weak winter in FY16 led to subdued woollen wear sales. Cotton sales were a hit on account of intense competition from e-commerce, which seemed to affect all the industry players. Demonetisation in FY17 affected the third quarter, accounting for more than 50 per cent of their annual revenue.
As the company has a high exposure to the cash-driven MBO channel, demonetisation had a considerable impact, and inventory liquidation led to low growth and margins. Nonetheless, it expects a strong revival in the top and bottom line in FY18E. Harsh winter and low base were keys determiners for year 2017.
Monte Carlo notably started out as an exclusive woollen brand in 1984. However, winter wear being a seasonal business, the company expanded and diversified into the cotton wear, home furnishing and kidswear segment. Of late, they have also launched new sports and athleisure wear brand ‘Rock It’. “Monte Carlo is currently India’s biggest woollen wear brand, almost five times the size of its nearest organised competitor,” apprised company Director Dinesh Gogna.
With the effect of demonetisation and early impact of GST standing behind, the company is now poised for strong growth, with focus on new markets and new product offerings.
As of 9M FY18, Monte Carlo’s pan-India retail presence comprised 234 EBOs (company-owned as well as franchised), over 2500 MBOs and 270 NCS, including large format stores like Reliance Retail, Shopper Stop, Aditya Birla fashion, Central and Kapsons.
“We are also looking to diversify geographically. We were predominantly a brand focused in the North and East, but have recently appointed a distributor in the South and plan to grow by 20–30% in the South and West regions over the next few years, on a low base,” shared Gogna while talking about further expansion plans.
