VEDANT FASHIONS

LTD

2022 Annual Report Summary

 Summary and Highlights of Annual Report - 2022

Business Offerings and Capabilities

• Vedant Fashions Limited (VFL) operates primarily in the manufacturing and trading of readymade
garments, being Indian wedding and celebration wear for men, women and kids.
• Evolved a multi-brand portfolio of products, emerging as a one-stop destination for every family’s
celebration wear needs.
• Multiple other brands in our portfolio such as MOHEY, TWAMEV, MANTHAN and MEBAZ - positioned to
cater to the aspirations of customers across different demographic segments.
• VFL has not offered any end-of-season sales or discounts for its Manyavar brand. Besides enhancing its
leadership position in Manyavar, the company intends to upsell Twamev, cross-sell Mohey and target a
sizable number of mid-market weddings and other celebrations via Manthan.

Industry
• The domestic apparel market is expected to continue to grow strongly until Financial Year 2025, clocking
up to INR 8.1 lac crores - INR 8.2 lac crores, registering a CAGR of about 18% to 20% between Financial
Years 2022 and 2025.
• Men’s wear segment projected to be the fastest growing over Financial Years 2022 and 2025.
• The healthy growth of kids’ wear in the long term is because of the rising proportion of the young
population (30% of India’s population is younger than 15 years old).
• According to CRISIL Research, the ethnic apparel retail market, is estimated at approximately INR
1,80,000 crores in Financial Year 2020.
• CRISIL Research expects the ethnic apparel industry to grow at a 14% to 15% CAGR over Financial Years
2022 to 2025, reaching INR 2,35,000 crores to INR 2,40,000 crores by Financial Year 2025.
• The share of branded apparel retailers within Indian wedding and celebration wear apparel market is
currently low, at approximately 15% to 20%, indicating huge potential for branded players.

Company Business Verticals

Based on the Company’s operating structure and available information, the Company has only one reportable
segment i.e., branded fashion apparel and accessories.

• Asset-light business model - strong balance sheet - zero debt.

• Industry leading high gross margins of 67%, enables generation of strong profitability for the
Company; The Company also has industry leading ROCE with track record of generating significant
cash, driven by a healthy cash conversion ratio.

Key Performance Indicators

• The Company reported industry-leading gross margins of around 67% during FY2022.
• The EBITDA margin was approximately 50% and the EBITDA stood at around INR 521.3 cr during FY2022
with the growth of around 85%, compared to FY2021.

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 • The reported PBT during FY2022 is INR 423 cr, which has significantly increased by 132.5% compared to
FY2021. The Company reported best-in-class PAT margin of 30.3% and profit after tax stood at INR 314.9
cr during FY2022, with a significant growth of 136.9% compared to FY2021.
• Industry-leading ROCE of 75.3% (pre-tax) during FY2022.

Business Highlights
• One-stop destination with a wide-spectrum of product offerings for every celebratory occasion and
a seamless purchase experience to customers through aesthetic franchisee-owned exclusive brand
stores.
• As of March 2022, 595 stores globally, which includes 12 EBOs in USA, Canada and UAE.
• Omni-channel network comprising EBOs, MBOs, LFS and Online (own website, mobile app and
leading lateral e-commerce platforms).
• Planning to grow retail space footprint from t 1.27 million square feet to 2.2 million square feet in
the next few years.
• Large portion of production process outsourced to third party manufacturers.
• 460+ Registered vendors; 42 cities within the company’s sourcing network.
• Company has adopted business analytical tools and modules for intra-store communication (in-
house POS order management ‘Sansar’ module and ‘Wooqer’ application), a ‘warehouse
management system’ for ensuring efficient inventory management at company warehouse and
jobber and vendor portals in order to ensure effective communication with company jobbers and
vendors. These system-driven processes and strong analytical capabilities enable the team to make
data-based decision-making and forecast cultural and evolving fashion trends across India.
• First-mover advantage, scale efficiencies and no discounts on Manyavar allows Vedant Fashions to
enjoy significantly higher gross margin.
• Vedant Fashions Ltd is a play on the branded Indian wedding and celebration wear (IWCW) market,
which seems relatively less price-sensitive.
• Despite net working capital requirement of >100 days on sales, VFL is amongst very few brands/
retailers that have consistently generated FCF and has net cash of >Rs5bn as of Mar’22.

Growth Drivers
• Approximately 90 lacs-1 crore weddings each year.
• Multi-day and multi-event wedding celebrations
• increasing tendency of wearing-appropriate celebration wear for festive events,
• Shift from tailored to ready-to-wear celebration apparels.
• Liking for Indo-western wear.
• Increased penetration in tiers-2&3 cities.

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