TBZ Clocks Decent Q3FY13 Numbers

Tribhovandas Bhimji Zaveri (TBZ) yesterday came out with its Q3FY13 numbers post market. For the December 2012 quarter, the topline and bottomline of the company grew at a decent rate. The stock of the company closed marginally lower by 0.88% to Rs 226.25 per share on the backdrop of results expectations. The following table gives us an overview of the December quarter numbers of the company:

The company continued to face higher input costs impacting its operating margin. The raw material expense increased by 79% to Rs 515 crore, while raw material to sales ratio grew by 280 basis points to 89%. Further, the adjustment in the stocks also impacted the operating profit, which de-grew by 3% to Rs 43.59 crore. The operating margin of the company declined by 199 basis points to 7.55% on a YoY basis.

It was a result of a small adjustment on other income and due to lower interest expense which helped the company to post a decent profit after tax for the quarter.

In the December quarter of 2012, the company opened two new stores, adding the total retail carpet area to 3900 sq ft. The press release also stated that the company is taking another initiative related to the forthcoming Valentine's Day and Wedding season. It is unveiling its new Bridal collection; new Showstopper jewellery coupled with tactical offers that would result into positive store sales growth in the March quarter of 2013.

Overall, we believe that the company posted a decent set of numbers. On the valuation front, it is currently available at a TTM Price to Earnings multiple of 21.52x. We suppose that one should remain invested in the counter, keeping in mind long term horizon to garner better returns.