TBZ’s Q4FY16 performance impacted by G&J industry’s nationwide protest

Leading jewellery retail company Tribhovandas Bhimji Zaveri Limited (“TBZ”), clocked a total income from operations worth Rs. 305.16 crores in Q4FY16 closing March 31st 2016. Announcing its financial performance for the said quarter the company noted that the said value dropped 34.09 percent on y-o-y basis. When considering the total income from operations during FY16, there was a 14.45 percent drop on y-o-y basis in the said value to Rs. 1,654.78 crores.

Mr. Shrikant Zaveri, Chairman and Managing Director of the company stated that “Fourth quarter performance was impacted by the nationwide agitation by gems & jewellery industry in protest against imposition of 1 percent excise duty on jewellery sales. Even in these challenging times we were able to improve our gross margins by 364 basis points y-o-y to 17.4 percent and keep our operating cost under strict control. Interest cost during the quarter declined by 6 percent y-o-y to Rs. 12.8 crores. We continued with our efforts to rationalise and refresh our inventory. These measures helped us maintain a positive cash flow. During the quarter we incurred a hedging loss of Rs. 13.6 crores on account of rising gold prices.”

In the three months of Q4FY16 EBITDA declined by 102.91 percent (y-o-y basis) to Rs. -0.73 crores with an EBITDA margin of -0.24 percent. Q4FY16 PAT declined to Rs. -17.00 crores with a PAT margin of -5.57 percent. In FY16 EBITDA declined by 47.14 percent (y-o-y basis) to Rs. 39.56 crores with an EBITDA margin of 2.39 percent. FY16 PAT declined to Rs. -23.13 crores with a PAT margin of -1.40 percent.

Mr. Zaveri added that, “Looking into the next year, we are optimistic of an improved operational and financial performance. We expect to see growth in jewellery sales in FY17 on the back of redemptions under the re-launched Kalpavruksha Scheme, expectations of a good monsoon, longer wedding season and overall improvement in discretionary demand. We shall continue expanding our reach and presence across India through mix of own and franchise stores over coming years.”