Vaibhav Global (VAIBHAVGBL) Q4 15/16 earnings summary

Executive summary

• FY16 revenue declined amid competitive pressure and disruption from the web-platform migration; investment in customer service, technology and capacity was positioned to support future growth.

• Served 362,000 customers, sold 8.1 million products and generated ₹1,276 crore in revenue; repeat purchase frequency was 17x.

• Customer reach rose 11% to 110 million TV households; retention was 45% in the US and 53% in the UK.

Financial highlights

• Consolidated revenue from operations and other income was ₹1,293.57 crore vs ₹1,388.45 crore in FY15; operating profit was ₹75.27 crore vs ₹146.88 crore.

• Consolidated PAT fell to ₹39.82 crore from ₹103.16 crore; management cited lower topline, higher depreciation and airtime costs.

• Standalone revenue from operations and other income was ₹367.99 crore vs ₹415.82 crore; PAT was ₹18.15 crore vs ₹29.98 crore.

• Consolidated EBITDA margin was 6% vs 10.7%; PAT before exceptional items was 3% of revenue.

• Gross margin increased 210 bps to 63%, helped by higher average selling prices and reduced low-margin rough-stone B2B activity.

Outlook and guidance

• Management expected reasonable topline and EBITDA growth over the foreseeable future, supported by completed investments and expanded capacity.

• Hybris version 5.7 was expected to go live by July 2016; customer apps for the US and UK platforms were planned for FY17.

• Priorities included expanding homegrown brands, building utilization at the Jaipur SEZ facility and improving customer engagement; moderate growth was expected without significant medium-term investment.

• Management aimed to maintain current realizations across a broader range of products and categories.