Threadbare Returns
profitability
India-specific
Set in India; the figures and context are India’s.What this case is about
Your client is a leading textile company in India selling menswear and womenswear through retail outlets mainly in Tier-1 cities. Recently, the company has experienced a 4% decline in its return on capital across all stores last year. This issue is specific to your client and not seen in the industry. You are asked to analyze the reasons behind this decline in return on capital.
Objective
Analyze why the client’s return on capital has declined and identify key factors affecting it.
Skills this case tests
Structuring the problem
Working the numbers
Reading the data