Vaibhav Global (VAIBHAVGBL) Q1 24/25 earnings summary

Executive summary

• Achieved 15% year-over-year revenue growth in Q1 FY25, reaching INR 756 crores, with gross margin improving to 66.1% due to pricing, product mix, and sourcing.

• EBITDA margin declined to 8.7% from 10% due to higher digital marketing and airtime investments for customer acquisition and channel positioning.

• Unique customer base grew 37% year-over-year to 636,000; customer retention at 40% and repeat purchases at 24 pieces per annum.

• Interim dividend of INR 1.5 per share declared, representing a 90% payout.

• Discontinued low-margin apparel manufacturing, impacting overall margin by -25 bps on TTM basis.

Financial highlights

• Revenue: INR 756 crores in Q1 FY25 vs INR 658 crores in Q1 FY24 (15% growth); B2C revenue up 16%, TV revenue up 12.2%, digital revenue up 22%.

• Gross margin improved to 66.1% in Q1 FY25.

• EBITDA at INR 66 crore (8.7% margin); PAT at INR 27 crore (3.6% margin), EPS at INR 1.7.

• Net cash positive balance: INR 158 crore.

• Free cash flow and operating cash flow flat due to higher inventory for festival season.

Outlook and guidance

• FY25 revenue growth guidance reiterated at 14%-17% with operating leverage.

• Content and broadcasting expenses expected to reduce to 18% of revenue for FY25.

• Germany expected to achieve operating profitability by H2 FY25.

• Margin expansion of 200 bps at gross margin level and over 100 bps leverage in HR and shipping costs anticipated.

• Mindful Souls BV acquisition expected to create synergies and strengthen digital businesses.