Branded innerwear segment is growing aggressively! Here’s why

by Dheeraj Tagra

28-November-2018  |  6 mins read

innerwear segment

Indian companies offering branded innerwear are performing quite well, be it sales or profitability. Three major players of this segment Lux Industries, Dollar Industries, and Rupa & Company showed quite positive results during Q2 of the current fiscal.

One of the main reasons for this growth is the organized sector, as Ashok Todi, Chairman, Lux Industries, Kolkata shares, “The market share of the country’s unorganised sector is expected to decline; the share of the organised sector is likely to increase.”

Lux Industries noted a massive surge of 31.26 per cent in sales as on Q2 ended on September 2018 and its surge in profit has been 60. 55 per cent. In FY 2017-18, the company had exports worth Rs. 103 crore which was 12 per cent more than the previous fiscal.

For Lux Industries, sales for H1 of FY 2018-19 was Rs. 533.82 crore compared to Rs. 451.19 crore of the first six months in the last fiscal, growing by 18.31 per cent. Its profit for the same period was Rs.40.12 crore while the same for last fiscal was Rs. 29.01 crore, which means a growth of 38.29 per cent.  The company has brands like Lux Cozi, Lux Venous etc.

Experts feel that raw material (cotton) prices remained somewhat subdued during this quarter which is another reason for this positive growth.

Dollar Industries Ltd., Kolkata, another big player of organised domestic retail and inner wear, also noticed good growth during Q2 of 2018-19 as its revenue was up by 24.12 per cent and net profit increased by 31.27 per cent. In H1 of FY 2018-19, the company noticed 7 per cent increase in sales and 21.68 per cent surge in net profit, while in last fiscal (2017-18), the company had exports of Rs. 67.19 crore. Dollar Bigboss, Force, Dollar Ultra are some of the main brands of the company.

“Growth in Indian inner wear especially mens undergarment have started recently and at least in the next decade it will grow at a very good rate. These companies are marketing aggressively, adding a new product category in the same segment which is creating good value for them. In last few years these companies have also started targeting mid segment while earlier they were focused majorly to masses, it also helped them to enhance their market reach as well as profitability. The new generation of these companies is also involved completely and carry forward the legacy,” states Yusuf Dohadwala, CEO, Intimate Apparel Association of India (IAAI), Mumbai. He further added that Indian youth is quite aspirational and experimenting which is also proving fruitful for these companies.

Five decades old Rupa & Company, Kolkata, another major player of this segment, witnessed 0.6 per cent decrease in its sales as the company’ total income from operation for Q2, FY 2018-19 was Rs. 249.30 crore compared to Rs 249.46 crore. But despite that, its profit increased 30 per cent. For Q2, FY 2018-19 the profit was Rs. 28.08 crore compared to Rs. 21.60 crore of the same period last year. It has brands like Frontline, Euro and Macroman etc.

Apart from these three companies, Page Industries, Bangalore who is the exclusive licensee of US-based Jockey brand for its manufacturing, distribution, and marketing in India, Sri Lanka, Bangladesh, Nepal, and the UAE, also shown growth. The company has registered 10 per cent growth in its year on year net profit at Rs 92.6 crore in the Q2, FY 2018-19. For the same quarter last year, it had reported profit of Rs 84.05 crore. Page Industries’ revenue rose by 10 per cent at Rs 690.7 crore against Rs 625.7 crore. But it is worth mentioning here that it is the weakest growth of the company in over a decade. EBITDA (earnings before interest, tax, depreciation, and amortisation) & profit also grew by 10 percent YoY, which were significantly below estimates. It is to be noted here, the company reported a lower-than-expected net profit and revenues as analysts on an average had expected a profit of Rs 1,14 crore and revenue of Rs 7,45 crore.

In India, Jockey recently started focusing on mid-segment also, while earlier it was known as a premium brand.  For this reason, the brand is neither considered ‘premium’, nor ‘mid-level’ and is thus struggling to sustain.

India is doing good on the export front also as far as product category of undergarments is concerned. As per the data of OTEXA, official website of US customs department, from January- September 2018, India noticed a growth of 4.10 per cent (in terms of quantity) into export to the US and 10.90 per cent as far as value is concerned. On the other side India’s undergarment export to the EU was down by -3.67 per cent and -6.48 per cent quantity and value wise respectively, from January to July 2018. Lux Industries and Dollar Industries had exports of Rs. 103 crore and Rs. 67.19 crore respectively in last fiscal (2017-18)

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