Tribhovandas loses some sparkle

Tribhovandas Bhimji Zaveri has lost some of its sparkle today morning. Opening lower at Rs.151, the stock went down at one point  to Rs.145.50, down almost 7% but since that level, it has been recovering. Currently it is at Rs.153.45, down less than 2%.

The stock is reacting to its Q4 and FY14 numbers which came in lower, announced after market hours. For Q4FY14, on a flat set of total income, which strangely came in at exactly the same amount as in Q4Fy13, at Rs.447 crore. EBITDA was down 28% (YoY) at Rs.32 crore while EBITDA margin came in much lower, down from 10% to 7.2%. Net profit for the quarter was at Rs.12 crore, down 53%. PAT margin almost halved from 3.83% to 1.75%.

The company ended FY14 also on a lower note, with total income rising 10% at Rs.1824 crore but EBITDA for the fiscal fell 11% at Rs.133 crore and net profit was down 35% at Rs.55 crore. The company has blamed this poor performance on macro economic factors and inflation, which slowed down overall demand. The extraordinary tight regulatory framework for the sector, with higher import duties to break fall of rupee also affected the earnings. Due to the subdued demand, the company did not go for store expansions as earlier planned. The company declared a total dividend of 22.50% for FY14 which includes a special dividend of 7.5% (75 paise on Rs.10 face value) to commemorate its 150^th year. As at 31^st March 2014, cash at hand was at Rs.74 crore, doubling up from Rs.32 crore in FY13.

Despite the poor performance, the stock is recovering today on the hopes that the Modi Govt will withdraw the import duties imposed on gold.