Thangamayil Jewellery (THANGAMAYL) Q4 17/18 earnings summary

Executive summary

• FY18 sales rose 6.14% YoY to ₹137,929 lakh; EBITDA increased to ₹6,090 lakh from ₹4,958 lakh, supported by improved realisation, product mix and diamond sales.

• Profit before tax reached ₹3,394 lakh versus ₹1,930 lakh; total comprehensive income was ₹2,274 lakh versus ₹1,395 lakh.

• Strategy emphasized margin expansion and existing-store growth, with larger outlets and higher inventory rather than rapid branch expansion.

Financial highlights

• Revenue from operations ₹137,929 lakh, up 6.14% YoY; other income ₹155 lakh versus ₹113 lakh.

• Gross profit ₹12,818 lakh, up 17.66% YoY; gross margin 9.29% versus 8.38%.

• EBITDA ₹6,090 lakh versus ₹4,958 lakh; finance costs fell to ₹1,879 lakh from ₹2,084 lakh, while depreciation was ₹817 lakh versus ₹943 lakh.

• PBT ₹3,394 lakh, up 75.82% YoY; profit for the year ₹2,287 lakh versus ₹1,397 lakh; total comprehensive income ₹2,274 lakh versus ₹1,395 lakh.

• EPS ₹16.58 versus ₹10.17; inventories rose to ₹47,590 lakh from ₹31,200 lakh, and working capital was ₹11,569 lakh versus ₹9,549 lakh.

Outlook and guidance

• FY19 outlook targets at least 12% top-line growth; management expected moderate, sustainable improvement barring unforeseen circumstances.

• Branch relaunches began in late FY18, with the full exercise targeted for completion by March 2019; a two-to-three-outlet franchise pilot was under evaluation for FY19.

• Priorities include diamond promotion, better product mix, own manufacturing, cost control, capital productivity and improved same-store sales.

• Gold hedging stood at 65:35 versus 50:50 YoY, with a stated future objective of up to 75:25.