INDIAN TERRAIN: INDIAN TERRAIN: A LEADING PLAYER IN BRANDED MEN’S CASUAL APPAREL SEGMENT A LEADING PLAYER IN BRANDED MEN’S CASUAL APPAREL SEGMENT 0
Contents 1 Industry Prospects Industry Prospects 2 Corporate Overview Corporate Overview Business Overview Business Overview 3 4 Management Team Management Team 5 Financial Metrics Financial Metrics 6 Strategic Vision Strategic Vision 1
Rising Private Consumption Supported By Demographic Changes ... a young consumer base, … ... a young consumer base, … Expanding working age population,… Expanding working age population,… Mean age of BRIC countries (years) 65.8% 42 BRIC average = 35 years BRIC average = 31 years 37 36 35 31 64.9% 29 27 26 64.5% 2009 2011 2013 Male Female India Brazil China Russia … and spreading urbanization,… … and spreading urbanization,… … resulting in rising private consumption … resulting in rising private consumption 32% Indian private consumption (INR Tn) 60 45 40 31% 31% 2009 2011 2013 2009 2011 2013 Demographic triggers such as a young consumer base, rising working age population and spreading urbanization are leading to increase in private consumption Sources: World Bank, Technopak Analysis Note: All numbers originally in USD converted to INR. Exchange rates for 2013, 2011 and 2009 are, respectively, 55, 45 and 50 2
Apparel Consumption To Grow Along With Private Consumption Growth Apparels market , which accounts for ~4% of private consumption,… Apparels market , which accounts for ~4% of private consumption,… … still remains small compared to peer countries… … still remains small compared to peer countries… Case-In-Point: Comparison Between India & China Private consumption (~INR 60 Tn) accounts for ~60% of total GDP Per-capita apparel consumption (INR) 12,958 Others Food & beverages 20.0% Leisure & education 31.2% 5,355 2,852 2013 Private 3.0% 1,350 Consumption: ~INR 60 Tn 2010 2015E 20.2% 4.6% China India ... and is, therefore, expected to grow along with private consumption ... and is, therefore, expected to grow along with private consumption Transport & Furniture, furnishing, 10.9% 4.7% communication etc. 5.4% Gross Total apparel market (INR Tn) Medical & health rent, fuel, power, etc Textile & apparels (T&A) services . 5.6 Retail industry (~INR 27 Tn) forms ~45% of private consumption 3.5 2.3 T&A market (~INR 3 Tn) is the fourth largest component of private consumption Apparels (~INR 2 Tn) accounts for ~69% of total T&A market and ~4% of total private 2013E 2018P 2023P consumption Indian apparels market, which still remains small compared to peer countries, is expected to grow along with increase in private consumption Sources: Technopak Analysis Note: All numbers originally in USD converted to INR at exchange rates of 45 (2010), 55 (2013) and 62 (2015) 3
Menswear to Benefit From Emerging Trends In The Industry Menswear, which is the largest user category within apparels,… Menswear, which is the largest user category within apparels,… …is dominated by shirts & trousers segments …is dominated by shirts & trousers segments Kidswear Others Menswear Shirts 10.2% Suits 20% 5.2% 29.2% T-shirts 6.3% 42% 2013 Market : 2013 Market : INR 2.3 Tn Innerwear 7.1% INR 1.0 Tn 7.2% Winterwear Trousers 38% 22.9% 11.9% Denims Womenswear Category is estimated to achieve CAGR of 9% over the next decade… Category is estimated to achieve CAGR of 9% over the next decade… … aided by growth in individual consumption … aided by growth in individual consumption Individual apparel consumption to grow supported by following Menswear market (INR Tn) emerging trends Rising preference to occasion-specific attire, especially A casualwear 2.2 1.5 B Growing receptivity of corporatized retail in non-urban centers 1.0 Increasing stress on convenience which is resulting in shift to C 2013E 2018P 2023P ready-to-wear products Menswear dominated apparels industry is estimated to post 9% CAGR over the next decade supported by emerging trends in the industry Sources: Technopak Analysis Note: All numbers originally in USD converted to INR at exchange rate of 55 4
Increasing preference for ready-to-wear, casual products with rise in corporatized retail A Increasing preference to casualwear Increasing preference to casualwear The term ‘casualwear’ covers a gamut of products è Men’s casualwear market has higher penetration and is more mature ‘Business casuals’ or ‘corporate casuals’, which are usually variations ─ Casual shirts/tops Casual trousers/skirts on the Dockers-khakis-polo shirt look 7% 8% ‘Smart casuals’ ─ ‘Resort casuals’ ─ Men's ‘Party wear’, etc. ─ Women's Boundaries between the different kinds of casualwear are blurring; the è typical Indian consumer now prefers to use casualwear interchangeably in 92% 93% different occasions C Increasing acceptance of ready-to-wear products Increasing acceptance of ready-to-wear products B High receptivity of apparels towards corporatized retail… High receptivity of apparels towards corporatized retail… One of the key reasons for increasing corporatized retail penetration in è Corporatized retail penetration apparels is the shift in consumer preference to ready-to-wear products 19% in 2013 The consumers, especially the men, graduating from ready-to-stitch to è ready-to-wear segment, which helped these retailers in creating significantdifferentiation from the local mom & pop textile stores 8% in 2013 12% 24% 14% in 2008 88% 76% Overall retail industry Overall retail industry Apparel retail industry Apparel retail industry The comparatively high corporatization in apparel retail has resulted in è higher formalization of the apparel retail ecosystem 2005 2020 The growing reach beyond the major urban centers and the è development of alternative retail channels will continue to drive the Ready-to-wear Ready-to-sticth growth of the apparel category Apparels and, by extension, menswear will continue to expand primarily in casual, ready-to-wear products, as corporatized retail expands beyond major urban cities in India Sources: Technopak Analysis 5
Contents 1 Industry Prospects Industry Prospects 2 Corporate Overview Corporate Overview Business Overview Business Overview 3 4 Management Team Management Team 5 Financial Metrics Financial Metrics 6 Strategic Vision Strategic Vision 6
Corporate Overview History & background History & background Shareholding pattern** Shareholding pattern** è Indian Terrain brand (“the Brand”) is a leading player in branded casual men’s apparel segment Others 26% è Initially launched in 2000 as part of Celebrity Fashions Limited, and subsequently demerged in FY11* Bennett, Col Promoters eman & Co. 39% è Listed on BSE and NSE with market capitalization of ~INR 3.1 Bn 5% è Focused on premium, smart casual wear segment targeting men in 25- 44 year age group New Vernon è Employs a judicious mix of distribution channels spread across 200+ 17% cities Reliance EOS Multi Capital è Achieved revenues of INR 2.3 Bn during FY14 with EBITDA margin of Strategy 6% 10.5%. During H1FY15, achieved revenues of Rs. 1.6 Bn with EBITDA Fund margin of 11.2% 7% FY14 revenue break-up FY14 revenue break-up Timeline Timeline Year Achievement Others 10% • Indian Terrain brand launched by Celebrity Fashions FY01 T-shirts 12% • Indian Terrain Fashions Limited (the “Company”) FY10 Shirts incorporated as a standalone company 46% • Indian Terrain brand demerged from Celebrity Fashions FY11 and lndian Terrain Fashions Limited listed on the BSE and Trousers the NSE 32% • 11th Most Trusted Apparels Brand – “Brand Equity” FY12 • Crossed INR 2 Bn of revenue milestone FY14 Indian Terrain is a leading premium casual men’s wear brand, with over INR 2 Bn in revenues growing at a 2-year CAGR of 28% *Details of demerger with Celebrity Fashions included in slide 33; **As on 30 September 2014 7
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