Thangamayil Jewellery (THANGAMAYL) Q4 08/09 earnings summary

Executive summary

• FY09 sales rose 10% YoY to Rs 24,685.56 lakh; PBIDTA increased 48% to Rs 1,877.87 lakh and PAT rose to Rs 887.52 lakh.

• Performance improved despite recessionary conditions and volatile gold prices, supported by three new branches, better product mix, faster stock turnover and cost controls.

Financial highlights

• Sales and other operating income reached Rs 24,685.56 lakh, up from Rs 22,460.11 lakh in FY08; sales growth reflected higher volume and price/yield.

• PBIDTA was Rs 1,877.87 lakh versus Rs 1,269.74 lakh; PBT rose 30% to Rs 1,355.14 lakh and PAT increased to Rs 887.52 lakh from Rs 686.07 lakh.

• Interest and finance charges increased to Rs 460.49 lakh from Rs 197.34 lakh; depreciation was Rs 62.22 lakh and tax provision Rs 467.62 lakh.

• Input costs for raw materials, packing materials and finished goods fell to 83.5% of sales from 93.73%, attributed to improved mix and value-added products.

• Other operating income increased by Rs 64 lakh, primarily from gold hedging profits and trading.

Outlook and guidance

• Plans called for six additional outlets and revenue growth of over 300% over the next three years; expansion was to proceed in phases.

• Dindigul, Theni and Tuticorin branches were expected to begin operating within 12 months of the report; the expansion plan targeted tier-2 cities and towns in Tamil Nadu.

• An IPO was planned for Q3 2009 after a corrective phase in equity markets; expansion was continuing with banker financing.

• The board recommended a 10% dividend on fully paid equity shares for FY09.