Incorporated in 1992, Kitex Garments has grown under the leadership of Mr. Sabu Jacob to become a significant player in the global infantwear market. Alongside its sister company, Kitex Childrenswear Ltd (KCL), which holds a 15.9% stake in KGL, the company manufactures and exports high-quality infant garments to prominent apparel retailers in the US and other developed markets. The Kitex Group boasts a fully integrated manufacturing facility in Kizhakkambalam, Kerala, with an impressive production capacity of around 8.5 million pieces per day.
To reduce its reliance on key customers and diversify its business, the Kitex Group established a marketing and design unit in the US in FY2015. This initiative, equally held by KGL and KCL, marks a significant step towards broadening the Group’s business profile. Furthermore, the Group is in the midst of setting up two new large integrated manufacturing units in Telangana, with operations in Warangal and Sitarampur expected to fully commercialize by March 2025 and March 2026, respectively.
In a recent announcement, Kitex Garments revealed that its capacity utilization has reached its peak, with the factory’s order book fully booked until June 2025. This surge in demand, coupled with favorable global market conditions, has positioned the company to achieve unprecedented turnover and profits—marking a potential all-time high in its three-decade history. This positive outlook has also been reflected in the stock market, with shares of Kitex Garments trading 14% higher on Monday and a remarkable 60% jump in August.
The Kitex Group stands as one of India’s largest manufacturers and exporters of infantwear, with over two decades of experience. Operating in a niche segment characterized by stringent quality standards and strong customer relationships, the Group has managed to establish significant entry barriers for potential competitors. The promoter’s extensive experience in the apparel industry and long-standing relationships with leading international brands have played a crucial role in sustaining the Group’s revenues and earnings.
The Group’s presence across the knitting, processing, and garmenting segments significantly enhances its operational efficiency. With a focus on value-added services such as printing and embroidery, alongside a high level of automation and a robust operational infrastructure, the Kitex Group has consistently achieved industry-leading margins. The proposed addition of spinning facilities for Kitex Apparel Park Ltd (KAPL) and the expansion of capacities across other segments of the value chain are expected to further boost overall value addition.
Looking ahead, the Kitex Group is poised for further growth through strategic diversification. The ongoing capacity expansion is set to enhance the Group’s product, customer, and geographical diversification over the medium to long term. This expansion will not only reduce the Group’s concentration risks with specific customers and the US market but also broaden its client portfolio to include other major retailers in the US and European markets.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
Published on: Aug 19, 2024, 3:43 PM IST
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