Thangamayil Jewellery (THANGAMAYL) Q4 15/16 earnings summary

Executive summary

• FY16 returned to profitability despite a difficult retail environment: EBITDA was ₹4,599 lakhs versus ₹441 lakhs in FY15; PAT was ₹1,053 lakhs versus a ₹2,228 lakh loss.

• Cost control, better inventory realization and working-capital management drove the turnaround despite lower sales and a March industry-wide strike.

Financial highlights

• Revenue from operations fell 10.5% YoY to ₹127,199 lakhs; gross profit rose 75.08% to ₹9,052 lakhs.

• EBITDA increased to ₹4,599 lakhs from ₹441 lakhs; PBT was ₹1,420 lakhs versus a ₹3,298 lakh loss, and PAT was ₹1,053 lakhs versus a ₹2,228 lakh loss.

• Finance costs declined to ₹2,364 lakhs from ₹2,914 lakhs; cash profit was ₹2,235 lakhs versus a cash loss of ₹2,472 lakhs.

• Inventory was ₹28,092 lakhs at March 31, 2016, versus ₹28,869 lakhs a year earlier; cash and bank balances rose to ₹940 lakhs from ₹574 lakhs.

Outlook and guidance

• Management expected moderate volume growth in FY17, subject to unforeseen circumstances, supported by cost reduction, working-capital discipline, stronger gold prices and anticipated monsoon improvement.

• Plans included 4–5 nearby outlets, refurbishment of at least six existing branches and lifting own-manufacturing capacity utilization from 70% to at least 85%.

• Ten outlets were identified for improved ambience; a target of five new branches was also outlined, alongside a strategy to deepen penetration in existing markets.