NSE: MONTECARLO
• Monte Carlo Fashions was incorporated in 2008 by Oswal Woolen Mills Ltd., the flagship company of Nahar group. The launch was a step in the evolution of the branded garment industry in India. It is known for its winterwear offering.[1]
• MCFL operates in the woolen and cotton category across four main segments: menswear, womenswear, kids wear, and home textiles (mink blankets, bedsheets, and quilts). As of Q1FY25, more than half of the company’s revenue comes from cottonwear(55%), the remaining 28% comes from woolen wear, 10% from home textiles, and 7% from kid’s wear.[2]
Exhibit: Revenue Bifurcation as of Q1FY25
• As of Q1FY25, MCFL is available through 422 Exclusive Brand Outlets, over 1249 (1438 in Q1FY24) Multi Brand Outlets and Distributors, 496 National Chain Stores, 410 Shop shops and Online retailers like Amazon, Flipkart, Myntra, etc, and its online portal. Currently, the company is targeting to open 2 or 3 stores in FY25. MCFL’s weighted average gross revenue per store is Rs.14 million as of FY24.[3]
• The company has a strong presence in both urban and semi-urban areas, along with its focus on affordable yet fashionable clothing, this has helped it capture a large customer base. Additionally, they are expanding into international markets, but India remains the core of their profitability(99.8%).[Annual report FY24, Pg136]
• Kewal Kiran Clothing Ltd(KKCL) is the primary competitor of MCFL. It has a market share of 0.11% in the Indian Apparel Industry as compared to 0.18% by MCFL.
• MFCL is recognized for its ability to quickly adapt to changing fashion trends.
• The fashion industry is a price-sensitive industry, if competitors are offering deep discounts, MFCL is forced to follow suit and give up on its pricing power in order to grow and maintain market share.
• 100% in house manufacturing for woollen garments, 50% in house manufacturing for cotton
Monte Carlo has three manufacturing facilities in Ludhiana, Punjab of which one is for woolen apparel while two others are for cotton apparel. The manufacturing facilities also include facilities for product development, design studio, and sampling infrastructure. The manufacturing for woolen apparel is fully in-house while for cotton it is 50% outsourced. They have also been doing in-house manufacturing of cotton t-shirts and thermals. [4]
In terms of home textiles, there is no expansion plan to manufacture home textiles as they are getting at 2%-4% cheaper cost.