Rare Rabbit Achieves Impressive Growth in Fiscal Year 2024

Rare Rabbit, a premium fashion brand, has experienced remarkable growth in recent years. The brand’s revenue saw an increase of over 69% during the fiscal year ending March 2024, while its profit rose by 2.3 times, reaching Rs 70 crore during the same period (FY24).

According to the financial statement obtained from the Registrar of Companies (RoC), Rare Rabbit’s operational revenue increased to Rs 637 crore in FY24 from Rs 376 crore in FY23.

About Rare Rabbit

Rare Rabbit is a men’s fashion brand that operates under The House of Rare. Established in 2015, the brand provides a variety of clothing items, including shirts, polos, T-shirts, trousers, and jackets. Sales from these products form the primary source of the company’s revenue. Additionally, the company generated Rs 5 crore from interest income, bringing its total income to Rs 642 crore in FY24.

Expenditure Overview

On the expenditure side, material costs rose significantly by 53% to Rs 208.4 crore. Employee benefit expenses observed a sharp increase of 95%, reaching Rs 78 crore, while advertising expenses went up by 45% to Rs 93 crore. Rent and commission expenses also saw notable rises of 62% and 58%, respectively. Overall, Rare Rabbit’s total expenses grew by 59.9% to Rs 542 crore in FY24, up from Rs 339 crore in FY23.

Profit Analysis

Given that Rare Rabbit’s revenue growth exceeded its expenses, the company’s profit surged 2.3 times to Rs 75 crore in FY24 from Rs 32 crore in FY23. The EBITDA margin improved to 19% from 14.7%, and the return on capital employed (ROCE) climbed to 52.15% in FY24 from 42.02% in the previous fiscal year.

Unit Economics

On a unit basis, Rare Rabbit spent Rs 0.85 to generate a rupee in the last fiscal year. As of March 2024, the company held Rs 2 crore in cash and bank balances, with current assets amounting to Rs 349.5 crore.

Funding Milestones

Rare Rabbit has reportedly raised approximately $24 million in funding to date, including a recent Rs 50 crore funding round from its existing lead investor, A91 Partners.

The Future of Rare Rabbit

The success and presence of Rare Rabbit have been gradually emerging for those closely following the industry. The brand focuses on men’s fashion, while its women’s line is named Rare is, and a children’s collection in development is referred to as Rare Ones. Rare Rabbit has strategically avoided offering excessive discounts, contrasting with many competitors in the market. This premium positioning seems to have paid off, placing the brand in a robust market position nearly a decade after its inception.

Questions remain about whether The House of Rare will continue its independence. Speculation suggests that it may, at least until the FY25 figures are released, which could propel the brand beyond the 1000 crore milestone. If success continues, maintaining profitability would potentially lead to a unicorn valuation as one of the many benefits of remaining a rare entity in the fashion industry.