Kaya Ltd: Glow­ing stock

Money Times - - Press Release Stock Buzz - By Subra­ma­nian Ma­hade­van

(BSE Code: 539276) (CMP: Rs.700.9) (FV: Rs.10)

Kaya Ltd, a de­merged en­tity of Marico’s skin care busi­ness, is en­gaged in the spe­cial­ized skin care and hair care busi­ness. It of­fers cus­tom­ized ser­vices and prod­ucts through 220+ qual­i­fied der­ma­tol­o­gists and USFDA-ap­proved cos­metic der­ma­to­log­i­cal pro­ce­dures at its chain of ‘Kaya Clin­ics’ in In­dia and the Mid­dle East. Kaya Skin Clin­ics were con­cep­tu­al­ized in 2002 by Marico’s founder Harsh Mari­wala to ad­dress skin-re­lated con­cerns. Kaya has more than 100 clin­ics and skin bars in In­dia and around 21 clin­ics in the Mid­dle East. Its range of prod­ucts and ser­vices cov­ers var­i­ous areas such as Anti-Age­ing, Pig­men­ta­tion, Acne/Acne Scar Re­duc­tion, Laser Per­ma­nent Hair Re­duc­tion, etc. apart from reg­u­lar beauty en­hance­ment ser­vices.

Af­ter Ra­jiv Nair joined Kaya as the CEO in Novem­ber 2016, the com­pany went in for a re­brand­ing ex­er­cise. It made its prod­ucts more af­ford­able, launched a web app through which cus­tomers can book ap­point­ments and also ex­panded its prod­uct port­fo­lio. It in­curred a capex of ~Rs.15 crore to re­vamp its clin­ics and in­tro­duce a range of hair care treat­ments in­clud­ing spas and trans­plants. It is fo­cused on laser hair re­moval treat­ments, which con­trib­utes 30% to its over­all rev­enue. Its re­brand­ing ex­er­cise is tar­geted to change the per­cep­tion of Kaya from be­ing a pure skin care clinic to a clinic with a wider of­fer­ing in­clud­ing ser­vices and prod­ucts for body, hair as well as skin. It launched a range of nat­u­ral prod­ucts un­der the brand ‘Derma Nat­u­rals’ un­der which it sells af­ford­able sheet masks. It now plans to launch lip balms and hair care prod­ucts start­ing at Rs.125 across e-commerce plat­forms. Kaya, which is cur­rently a ~Rs.50 crore busi­ness, aims to ex­pand its reach and grow rapidly. On the fi­nan­cials front, it fi­nally broke even in Q2FY19, where-af­ter var­i­ous bro­ker­ages and fund houses have evinced in­ter­est in the counter as Kaya is the only listed skin com­pany in In­dia. When other com­pa­nies like VLCC and Nykaa join the band­wagon, this stock could eas­ily get re-rated. An ag­gres­sive man­age­ment with good cor­po­rate gov­er­nance, low eq­uity cap­i­tal, high pro­moter stake, strong brand re­call and bright in­dus­try prospects make this stock look at­trac­tive. In­vestors can buy the stock for a price tar­get of Rs.1000+ within a year.

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