Tara Jewels Limited Tara Jewels factory SEEPZ, Mumbai Results Update August 2015
Safe Harbour This presentation and the accompanying slides (the Presentation ), which have been prepared by Tara Jewels Limited (the Company ), have been prepared solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory offering document containing detailed information about the Company. This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents of, or any omission from, this Presentation is expressly excluded. This presentation contains certain forward looking statements concerning the Company s future business prospects and business profitability, which are subject to a number of risks and uncertainties and the actual results could materially differ from those in such forward looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding fluctuations in earnings, our ability to manage growth, competition (both domestic and international), economic growth in India and abroad, ability to attract and retain highly skilled professionals, time and cost over runs on contracts, our ability to manage our international operations, government policies and actions regulations, interest and other fiscal costs generally prevailing in the economy. The company does not undertake to make any announcement in case any of these forward looking statements become materially incorrect in future or update any forward looking statements made from time to time by or on behalf of the company. 2
Q1 FY16 - Performance Highlights Revenue (excl. Bullion & Others) of Rs. 3,099mn Exports of Rs. 2656 mn India Retail of Rs. 443 mn Gross Profit (excl. Bullion & Oths) of Rs. 522 mn, margin of 16.8% EBITDA (excl. Bullion & Others) of Rs. 317 mn, margin of 10.2% expansion of 40 bps Net Profit of Rs. 72 mn growth of 3% Cash Profit of Rs. 133 mn Total Store Network of 30 Stores in 27 cities in 10 states India Retail 19 Operating Format Stores 11 Shop-in-Shop format outlets in Shoppers Stop Online presence on Amazon.in & Snapdeal.com through distributor Exports Total Order Book: Rs. 8,290 mn Confirmed Orders: Rs. 2,210 mn Framework Orders: Rs. 6,080 mn 3
Revenue Breakup Rs Mn International Retail 2,607 2,656 +2% 524 443-15% Q1 FY15 Q1 FY16 4
Segmental Breakup* Sales: Rs. 3,099 mn Gross Profit^: Rs. 522 mn India Retail 14% India Retail 19% International Business 86% International Business 81% * - Excluding Bullion & Others ^ - Gross Profit = Sales (Consumption + Direct Expenses) 5
International Business
Progress made towards Branding Efforts The Monique Lhuillier Collection is being sold through one of the largest online retailers Considering sale through high-end jewellery chain stores Facets by Michael Beaudry is being sold through Broadcast Television Network and high-end jewellery chain stores Heat Essence is currently being sold in speciality jewellery stores in US The Zac Posen Collection is being sold by one of the largest online retailers and high-end jewellery chain stores With brands ZAC Zac Posen in fashion, Truly Zac Posen in bridal wear The Angel Sanchez Collection is being considered by the one of the largest specialty fine jewelry companies in US Cherished Hearts is being sold by one of the biggest mid-range department store in US Heart2Heart is being sold by one of the largest departmental store in US Strategically aligns our offerings with Clients Business Model 7
International branding efforts Our Brand tie-ups available on: www.bluenile.com www.helzberg.com www.kay.com www.amazon.in www.snapdeal.com 8
Current Order Book Combined Order Book (Rs. mn) 8,290 6,080 2,210 Confirmed Orders Order book as on 30 th June 2015; 1 USD = Rs. 62 Framework Orders Combined Orders * Framework Orders - Contracts where Metal Prices are yet to be finalized 9
International Business: Q1 FY16 Performance Sales Gross Profit EBIDTA PAT Rs mn 2,607 +2% 2,656 441-4% 421 +2% +1% 254 259 62 63 Inventory Days (Sales) Creditor Days (Sales) Debtor Days (Sales) 200 177 82 71 97 149 Ended Jun. 14 Ended Jun. 15 Ended Jun. 14 Ended Jun. 15 Ended Jun. 14 Ended Jun. 15 10
International Business: Margin Analysis EBITDA Margin Operating Cost Selling & Distribution Cost Admin Cost Employee Cost 9.7% 9.8% 7.2% 1.2% 2.2% 6.1% 1.1% 1.2% 3.8% 3.8% 100% of revenue generated from International Business is from Diamond Studded Jewellery 11
India Retail
Strategic Operational Re-strategizing the Retail Business Store Profitability Product Mix Widen Presence in Tier II V Cities Small Format Stores - Limited Inventory and Operating Costs Focus on High Margin Products Diamond Jewellery, Kundan Jewellery and Make to Order Jewellery Reduce the sale of plain Gold Jewellery Achieve Faster Expansion & Better Returns Expand the Brand more rapidly Streamline the Store Operations and Manage the Unit Economics Lower Inventory Requirement Captures footfalls of Malls/Large Stores Limited Operating Costs - Benefits from store advertising & promotions, Low Staffing Cost etc Asset Light Model Shop-in-Shop...to maintain Profitable Growth 13
Retail Business expansion Shop in Shop Format.. Asset Light expansion Strategy Total of 11 Outlets in Shop-in-Shop Format Outlets at Shoppers Stop Location : DB City Mall Bhopal Ambuja City Center Raipur Elante Mall-Chandigarh BPK Star Building Indore World Trade Park - Jaipur MBD Neopolis Mall Jalandhar Alpha One Mall Amritsar Prozone Mall Aurangabad Eros Mall Delhi The Great Indian Place Noida Inorbit Mall Vashi, Mumbai Lower Inventory Requirement Captures footfalls of Malls/Large Stores Limited Operating Costs - Benefits from store advertising & promotions, Low Staffing Cost...in line with out strategy to expand retail footprint through Asset Light Model 14
E-Retail Asset Light expansion Strategy The distributor of Tara Jewels has tied up with Amazon and Snapdeal to launch the brands collection online Collection ranging from daily wear, signature collections such as Heart Embrace & Fleur to International Bestsellers Launched Unique jewellery collection Anisa, a range of rings and earrings No Establishment and Limited Operating Cost Easily adapt to the changing buying behaviour Wide spread penetration & Amazon s strong logistic capabilities...in line with out strategy to expand retail presence through Asset Light Model 15
India Retail: Q1 FY16 Performance Sales Gross Profit EBIDTA PAT Rs mn -15% -31% +8% +20% 524 443 146 100 54 58 8 10 Inventory Days (Sales) Creditor Days (Sales) * Debtor Days (Sales) 204 161 120 4 48 1 Ended Jun. 14 Ended Jun. 15 Ended Jun. 14 Ended Jun. 15 Ended Jun. 14 Ended Jun. 15 * Gold now acquired under gold on loan scheme 16
India Retail : Q1 FY16 Margin Analysis Margins (%) Operating Cost Gold Diamond Selling & Distribution Cost Admin Cost Employee Cost 39 38 17.59% 13 8 4.47% Q1 FY15 EBITDA Margin Q1 FY16 7.91% 9.42% 1.13% 10.26% 13.16% 5.23% 5.21% 3.06% Asset Light Model drives better margin 17
Consolidated Financials
Consolidated ly P&L Rs. mn Y-o-Y FY15 Sales 3,099 3,130-1% 17,063 Sales from Bullion & Others 0 72 2,90 Total Income 3,099 3,202-3% 17353 Raw Material 2,496 2,447 13,962 Purchase of Bullion & Others 0 72 289 Employee Expenses 115 127 530 Other Expenses 171 248 986 EBITDA 317 308 3% 1,586 - EBITDA excl. Bullion & Others 317 308 1,585 - EBITDA Margin excl. Bullion & Others 10.2% 9.8% 9.3% Other Income 13 10 53 Interest 171 150 716 Depreciation 61 63 281 PBT 99 105 643 Tax 26 35 206 PAT 72 70 3% 437 PAT Margin 2.3% 2.2% 2.5% Cash Profit 133 133 0% 717 19
Consolidated Balance Sheet Rs. mn March 2015 March 2014 Shareholder s Fund 5,846 5,404 Share capital 246 246 Reserves & Surplus 5,587 5,158 Money received against share warrants 12 0 Non-Current Liabilities 51 46 Long term borrowings 3 12 Other Non Current Liabilities 48 34 Current Liabilities 7,549 7,510 Short term borrowings 4,097 3,849 Trade Payables 3,017 3,191 Other current liabilities 435 470 Total Liabilities 13,446 12,960 Rs. mn March 2015 March 2014 Non-Current Assets 1,247 1,274 Fixed assets 1,129 1,160 Non-current investments 37 37 Deferred tax assets (Net) 39 7 Long-term loans & advances 42 70 Current Assets 12,199 11,686 Inventories 5,764 6,935 Trade receivables 5,337 3,808 Cash and Bank Balances 835 710 Other current assets 262 233 Total Assets 13,446 12,960 20
For further information, please contact: Company : Investor Relations Advisors : Tara Jewels Limited CIN: L52393MH2001PLC131252 Mr. Sanjay Sethi, Director-Finance sanjay.sethi@tarajewels.co.in www.tarajewels.in Strategic Growth Advisors Pvt. Ltd. CIN: U74140MH2010PTC204285 Ms. Payal Dave / Mr. Ruchi Rudra dpayal@sgapl.net / rruchi@sgappl.net www.sgapl.net 21