Dolat Capital is bullish on Tribhovandas Bhimji Zaveri (TBZ) and has recommended buy rating on the stock with a target of Rs 300 in its February 11, 2013 research report.
“Tribhovandas Bhimji Zaveri (TBZ), net sales at Rs 5.77bn v/s our estimate of Rs 5.2bn. Gross margin declined by 234bps QoQ to 17%. EBITDA at Rs 436mn (est of Rs 450mn) as EBITDA margins stood at 7.6% (est of 8.6%). PAT was inline with our estimate at Rs 247mn (est of Rs 240mn). For 9MFY13, revenue grew by 8.4% to Rs 12.1bn, the growth was muted mainly on account of poor performance in 1HFY13. EBITDA remained flat at Rs 1bn as margins declined by 70bps YoY to 8.5%. Higher other expenditure due to ad spend and new stores impacted operating performance. PBT grew by 11% YoY to Rs 835mn mainly on account of lower interest cost. PAT at Rs 600mn was up 18.6% YoY.”
“On back of aggressive expansion plan, we estimate revenue CAGR of 37% and PAT CAGR of 43% during FY12-15E. We have revised out estimate to factor in the impact of increase in interest rate. We have downgraded our earnings estimate by 8-9% for FY14E and FY15E. Our revised EPS estimate for FY14E and FY15E stand at Rs 17.2 and Rs 25.2. While the long term story of shift towards large brand jewelers remains impact there is an overhang on the stock on account of recent initiatives from government to curtail gold import. Any regulations to impact the gold demand is a key risk. At a CMP of Rs 204, the stock trades at 12x FY14E and 8x FY15E. We maintain BUY and reduce our price target to Rs 300 (12x FY15E EPS),” says Dolat Capital research report.
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