Buy Tribhovandas; target of Rs 330: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal is bullish on Tribhovandas Bhimji Zaveri and has recommended buy rating on the stock with a target of Rs 330 in its January 1, 2013 research report.
 
“Tribhovandas Bhimji Zaveri, India is the largest consumer of gold in the world. According to a CARE Report, the Indian domestic gems and jewellery industry has the potential to grow from an ~ Rs2,20,000Cr (Gold Jewellery share ~80%) in FY12 to ~Rs3,00,000 Cr by FY14,which implies a CAGR of 14% with the organized sector expected to grow by ~30% during the same period. Currently market is fragmented across the value chain. There are ~ 450,000 unorganised players across the gems and jewellery sector. The Organized National Jewellers and Large Regional Jewellers account for ~ 6% and ~10% of this market respectively. Changing demographics, fast urbanization, more women in work force and reliable quality of gold will lead to sustained increase in the share of organized market. We believe, companies such as TBZ will be a natural beneficiary of this change. (Data Source: CRISIL and CARE).”
 
“TBZ is a 148 year old brand in premium and wedding jewellery. Promoters are in the business of jewellery for the last 4 generations. Jewellery is a business of customer's trust and therefore vintage with a credible track record gives jewellers immense competitive edge and moat. The company makes money primarily by making charges and mark up it levies on the gold and diamond. TBZ raised Rs200 crore from the IPO in year 2012 and plans to use funds for expanding its retail presence to 57 stores spread across 43 cities by FY2015 from 19 stores currently. High brand recall for wedding and fashion jewellery along with aggressive expansion will drive net profit growth during the years to come.”
 
“TBZ has delivered 65% CAGR in net profit during FY08-FY12. We expect profit CAGR of 40-45% over FY12- FY16E on the back of huge expansion in retail presence. Stock currently trades at PE and EV/EBIDTA of 13.5x and 9x FY14E, which looks reasonable considering the growth potential. Listed peer like Titan trades at ~27xFY14E. We believe, high double digit growth, high RoE(25%+) and good and visible brand will lead to rerating of the stock valuation over time. Recommend BUY with a target of Rs330 (19xFY14E EPS and 12xFY14E EV/EBIDTA),” says Motilal Oswal research report.

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