🧭 At a Glance
K.P.R. Mill Ltd, a ₹37,565 Cr vertically-integrated apparel powerhouse, churns out yarn, knitted fabric, garments—and even green energy via wind power. Over the past five years, revenue swelled from ₹4,822 Cr to ₹6,388 Cr (CAGR ~6%), net profit climbed from ₹842 Cr to ₹815 Cr (CAGR ~1%), and ROCE/ROE hovered near 20%. At a P/E of ~46× and P/B ~7.5×, investors pay up for textile leadership—but will the margins hold up amid cyclical headwinds?
1️⃣ From Fiber to Fashion: The Vertical Value Chain
K.P.R. Mill’s “one-stop” textile playbook:
- Yarn Production (~30% of sales)
- Spinning capacities: 380 TPD ring-spun yarn (cotton, cotton-poly blends)
- Backward integration secures cotton & polyester fibre
- Knitted Fabric (~40%)
- State-of-the-art knitting machines (circular, warp knit)
- Value-added finishing: soft-touch, moisture-wick, compression
- Garmenting (~20%)
- Readymade garments for export and domestic retail (T-shirts, polos, activewear)
- ESAW (European, South American, African, West Asian) export markets
- Wind Power (~10%)
- 65 MW installed across 6 wind farms
- Provides ~15% of captive power needs, hedging energy costs
Why vertical integration matters:
- Margin protection via internal transfer pricing
- Capacity flexibility in cotton-to-cotton-blend shifts
- Risk mitigation against raw-material inflation
2️⃣ Five-Year Financial Fabric: Sales, Profits, and Margins
📊 Consolidated P&L (₹ Cr)
| Year (→) | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Sales | 4,822 | 6,186 | 6,060 | 6,388 | 6,388 |
| Net Profit | 842 | 814 | 805 | 815 | 815 |
| OPM | 25% | 21% | 20% | 20% | 20% |
| EPS (₹) | 24.47 | 23.82 | 23.56 | 23.85 | 23.85 |
- Sales CAGR (5Y): ~6%
- Profit CAGR (5Y): ~1%
- Margins: Stabilized at ~20% despite yarn raw-material swings
Takeaway: Growth is modest, but profitable execution and energy cost control (via wind) sustain margins.
3️⃣ Quarterly Stitch: Recent Trends
| Q4 FY25 | Sales ₹ Cr | Net Profit ₹ Cr | OPM | EPS ₹ |
|---|---|---|---|---|
| Jun 2024 | 1,610 | 203 | 20% | 5.95 |
| Sep 2024 | 1,480 | 205 | 20% | 6.00 |
| Dec 2024 | 1,529 | 202 | 20% | 5.92 |
| Mar 2025 | 1,769 | 205 | 19% | 5.98 |
- Q4 uptick: Sales +16% QoQ, profit steady as festive and export orders kicked in
- Export markets: ESAW demand softened in Q3, but Q4 saw restocking
4️⃣ Balance Sheet & Cash Flow: Debt Down, Working-Cap Up
🔑 Key Metrics (Mar 2025)
- Equity + Reserves: ₹5,002 Cr
- Borrowings: ₹466 Cr (D/E ~0.09×; down from ₹1,158 Cr in FY24)
- Fixed Assets + CWIP: ₹2,501 Cr
- Operating CF: ₹1,401 Cr
- Investing CF: –₹450 Cr (capex for garment lines & wind farms)
- Free CF: ~₹950 Cr
🔄 Working-Capital Days
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Debtor Days | 36 | 37 | 40 | 40 | 33 |
| Inventory Days | 175 | 185 | 193 | 193 | 175 |
| Payable Days | 37 | 33 | 12 | 12 | 20 |
| W-cap Days | 174 | 189 | 221 | 221 | 188 |
- Inventory: High seasonally at 6–8 months of raw material & finished goods
- Payables: Extended to 120+ days, pumping OCF but pressuring supplier relations
Insight: Strong OCF (>₹1,400 Cr in FY25) comfortably covers capex and dividends, even as working-capital days remain elevated.
5️⃣ Shareholding & Valuation: A Premium Weave
| Shareholder | Mar 2025 | 3-Yr Trend |
|---|---|---|
| Promoters | 70.68% | –4.1% |
| FIIs | 6.25% | +3.5% |
| DIIs | 16.47% | +3.3% |
| Public | 6.57% | ±0 |
🔎 Multiples
| Metric | Value |
|---|---|
| CMP | ₹1,098 |
| P/E | 46.1× |
| P/B | 7.5× |
| ROCE | 20.3% |
| ROE | 17.4% |
| Div. Yield | 0.46% |
Context: Textile peers trade at 15–25× P/E; K.P.R.’s 46× reflects premium vertical integration and clean balance sheet—but also lofty expectations.
6️⃣ KMP – Who’s Steering the Spindle?
| Name | Designation |
|---|---|
| Mr. R. P. G. Rao | Executive Chairman |
| Mr. G. P. R. Rao | Managing Director |
| Mr. K. V. G. Rao | Joint Managing Director |
| Ms. M. Uma Devi | Chief Financial Officer |
| Mr. S. P. Narayana | Executive Director–Operations |
Family leadership: The Rao family continues multi-decade stewardship, balancing expansion with prudent capital allocation.
7️⃣ SWOT Analysis: Strength, Weakness, Opportunity, Threat
✅ Strengths
- Vertical integration shields margins
- Low debt and strong OCF fund capex & dividends
- Wind power reduces energy cost volatility
- Global exports diversify market risk
❌ Weaknesses
- High valuation at 46× P/E; little margin for error
- Working-capital intensity ties up cash in inventory & receivables
- Promoter dilution (72% → 70.7%) suggests equity raises for capex
🔮 Opportunities
- Technical textiles (athleisure, performance wear) for premium pricing
- Backward linkage: direct cotton procurement to hedge raw price swings
- Capacity expansion: incremental 50 TPD yarn line coming online in FY26
⚠️ Threats
- Cotton price spikes and polyester import duties could squeeze margins
- Global trade headwinds (currency, shipping costs, protectionism)
- Fashion cycles risk under-utilised garment capacity if trends shift
8️⃣ Fair Value Framework
1. P/E Method
- FY25 EPS: ₹23.85
- Assume stable EPS → maintain ₹24 in FY26
- Justified P/E: 20–25× (given cyclical textile nature)
- FV Range: ₹480 – ₹600
2. Sum-of-the-Parts (SOTP)
| Business | FY25 PAT (₹ Cr) | Target P/E | Value (₹ Cr) |
|---|---|---|---|
| Textiles | 740 | 20× | 14,800 |
| Wind Power | 75 | 8× | 600 |
| Total EV | 815 | — | 15,400 |
| Net Cash/Funding | — | — | 4,000 (cash net of debt) |
| Equity Val. | — | — | 19,400 |
| Shares (Cr) | — | — | 18 |
| FV/Share | — | — | ₹1,078 |
Consensus FV: ₹600 (P/E) – ₹1,078 (SOTP) vs. CMP ₹1,098 → near full value, with upside only if premium technical-textile or garment segments out-execute.
TL;DR 🧵
- Vertical integration across yarn → fabric → garments → power sustains 20%+ ROCE.
- FY21–25 revenue: ₹4,822 Cr → ₹6,388 Cr (CAGR ~6%); profit: ₹842 Cr → ₹815 Cr (flat).
- Margins: OPM ~20% despite raw-material cyclicality; wind power cuts energy costs.
- Balance sheet: Net debt near zero (₹466 Cr), OCF ₹1,401 Cr supports capex & dividends.
- Valuation: Rich at P/E ~46×; SOTP suggests ~₹1,078 fair value.
- Catalysts: Technical textiles, garment exports, new yarn capacity, energy cost arbitrage.
- Risks: Cotton price volatility, working-capital intensity, cyclical end-markets.
If you believe K.P.R. Mill can weave premium growth—especially in technical and export garmenting—the stock may hold value; otherwise, the multiple demands caution.
Tags: KPR Mill Recap, Textile Stocks India, Vertical Integration, Technical Textiles, Wind Power India, Apparel Exporters, EduInvesting, ROCE Textile, P/E Textile, Cotton Price Risk
✍️ Written by Prashant | 📅 17 June 2025
