Accumulate Tribhovandas Bhimji Zaveri; target of Rs 78: Prabhudas Lilladher

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26 Aug, 2025 12:21

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TBZ sales declined by 7.5% and SSG declined by 3.6% on soft demand for Jewellery, high base in 1Q18 and inauspicious days in June'18. Gross margins expanded in both Gold and Diamond, however, EBITDA margins declined 110bps due to heavy spending on the newly launched wedding Jewellery range, changed strategy of communication and rationalization of making charges in Plain Gold, Studded and premium Jewellery. TBZ has indicated 15 store openings in FY19 which includes 10 owned stores, indicating reasonable level of success with last year's 4 store openings in Malls. Although the move is positive, we remain cautious as target of adding 30 stores in next two years (base of 37 stores) need support from good demand scenario. Balance sheet remains healthy with 7% increase in debt in 1Q on account of increase in inventory before the new store opening at Noida in 2Q. TBZ aims to achieve inventory turns of 2 by FY19. We expect growth rate to accelerate from here on, given increased thrust on new store openings and festival and marriage season in 3Q19.

We estimate 44% PAT CAGR over FY18-20 and value the stock at 13xFY20 EPS of Rs6.0 arriving at a target price of Rs78. Retain Accumulate.

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