Current price 146.55

Sector Jewellery

No of shares 66719900

52 week high 222.80

52 week low 125.20

BSE Sensex 27975.86

Nifty 8492.30

Average Volume 150907

BSE Code 534369

NSE Symbol TBZ

Tribhovandas Bhimji Zaveri Ltd.

Recommendation

– BUY/HOLD

Date – 30/03/2015

Tribhovandas Bhimji Zaveri Limited is engaged in manufacturing/trading and selling jewellery in India. The

company offers gold, diamond, precious and semi-precious stone studded, silver, and platinum jewellery;

loose diamond solitaires; loose precious and semi-precious stones; and jadau jewellery. It provides rings,

earrings, pendants, bracelets, necklaces, chains, watches, bangles, and other jewellery products for various

weddings, festivals, and personal occasions, as well as for daily wear. As of August 8, 2014, it operated 28

stores with space of 88,093 sq ft spread in 22 cities in Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh,

Kerala, Seemandhra, Telangana, West Bengal, Rajasthan, and Jharkhand. The company was founded in

1864 and is based in Mumbai, India.

The design and manufacture of their products is done either in-house or by third parties. All of their

showrooms trade under the name of 'Tribhovandas Bhimji Zaveri'. The company offers their customers a wide

variety of jewellery from across India in order to cater to regional tastes. They also offer jewellery from various

parts of the world such as Italy, Turkey and Thailand. They also customize jewellery for individual needs. They

offer their jewellery across different price points so as to maximize their potential customer base. The

company has their own manufacturing facilities for diamond-studded jewellery. In addition, they outsource the

production of jewellery as well as purchase jewellery from third parties.

They introduced independent administration of each showroom by professionals. In the year 2004, the

company commenced retailing 100% pre-hallmarked jewellery. In July 24, 2007, the company was formally

incorporated as a private limited company.

The company plans to open an additional 43 showrooms (25 large format high street showrooms and 18 small

format high street showrooms) by the end of Fiscal 2015, which would give us a total of 57 showrooms (with a

total carpet area of approximately 150,000 sq. ft.) in 43 cities across 14 states. The current market

capitalisation stands at Rs 940.75 crore.

Company Overview

Category No. of Shares Percentage

Promoters 49,459,775 74.13

Foreign Institutions 10,576,211 15.85

General Public 3,653,210 5.48

Other Companies 2,786,577 4.18

Foreign - NRI 140,494 0.21

Financial Institutions 45,472 0.07

NBFC and Mutual

Funds29,740 0.04

Others 28,421 0.04

Market Cap (Rs Cr) – 980.45

Company P/E (x) – 17.20

Industry P/E (x) – 28.64

Book Value (Rs) – 67.10

Price / BV (x) – 2.19

Dividend (%) – 22.50 %

EPS (TTM) – 8.25

Dividend Yield (%) – 1.53

Face Value (Rs) – 10

Share Holding Pattern Financial Details

Industry Overview

The Gems and jewelry sector in India plays a significant role in the Indian economy, contributing around 6-7

per cent of the country’s GDP. One of the fastest growing sectors, it is extremely export oriented and labour

intensive. The government of India has declared the sector as a focus area for export promotion based on its

potential for growth and value addition. The government has recently undertaken various measures to

promote investments and to upgrade technology and skills to promote brand India in the international market.

According to a report by Research and Markets, the Jewelry Market in India is expected to grow at a CAGR of

15.95 per cent over the period 2014-2019.The gold jewelry exports from India were US$ 554.45 million in

December 2014, while silver jewellery exports were US$ 148.49 million, according to the latest data released

by the Gems and Jewelry Export Promotion Council (GJEPC).

India is the world’s largest cutting and polishing centre for diamonds, with the cutting and polishing industry

being well supported by government policies. Moreover, India exports 95 per cent of the world’s diamonds, as

per statistics from the Gems and Jewellery Export promotion Council (GJEPC). The industry is projected to

generate up to US$ 35 billion of revenue from exports by 2015. The cumulative foreign direct investment (FDI)

inflows in diamond and gold ornaments in the period April 2000-December 2014 were US$ 476 million,

according to Department of Industrial Policy and Promotion (DIPP).

The Reserve Bank of India (RBI) has liberalized gold import norms. With this, star and premier export houses

can import the commodity, while banks and nominated agencies can offer gold for domestic use as loans to

bullion traders and jewelers. A FICCI-Technopak report estimates that gems and jewellery exports will grow to

USD 58 billion by 2015. It also estimates that the domestic market for gems and jewellery will touch USD 35

billion to USD 40 billion by 2015.

Balance Sheet

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Sources Of Funds

Total Share Capital 66.70 66.67 50.00 50.00 10.00

Equity Share Capital 66.70 66.67 50.00 50.00 10.00

Reserves 380.97 343.40 109.58 57.10 58.46

Networth 447.67 410.07 159.58 107.10 68.46

Secured Loans 500.69 410.08 191.33 196.93 195.97

Unsecured Loans 62.76 3.92 12.24 11.69 0.00

Total Debt 563.45 414.00 203.57 208.62 195.97

Total Liabilities 1,011.12 824.07 363.15 315.72 264.43

Application Of Funds

Gross Block 122.46 108.59 63.25 59.36 41.31

Less: Accum. Depreciation 28.41 20.96 14.10 10.39 0.00

Net Block 94.05 87.63 49.15 48.97 41.31

Capital Work in Progress 1.59 1.64 0.71 0.00 2.11

Investments 3.03 3.03 3.03 2.98 0.01

Inventories 1,111.88 1,027.38 501.90 425.43 286.55

Sundry Debtors 2.86 1.76 3.00 8.37 3.06

Cash and Bank Balance 72.85 31.85 5.34 9.07 2.87

Total Current Assets 1,187.59 1,060.99 510.24 442.87 292.48

Loans and Advances 29.42 27.93 19.43 18.18 13.10

Total CA, Loans & Advances 1,217.01 1,088.92 529.67 461.05 305.58

Current Liabilities 277.93 324.79 194.19 180.44 81.54

Provisions 26.64 32.35 25.22 16.85 3.02

Total CL & Provisions 304.57 357.14 219.41 197.29 84.56

Net Current Assets 912.44 731.78 310.26 263.76 221.02

Miscellaneous Expenses 0.00 0.00 0.00 0.00 0.00

Total Assets 1,011.11 824.08 363.15 315.71 264.45

Contingent Liabilities 10.77 4.32 14.50 14.50 0.00

Book Value (Rs) 67.11 61.51 31.92 21.42 68.46

Profit and Loss Account

Mar '14 Mar '13 Mar '12 Mar '11 Mar '10

Income

Sales Turnover 1,824.34 1,658.34 1,385.47 1,193.93 884.90

Net Sales 1,824.34 1,658.34 1,385.47 1,193.93 884.90

Other Income 6.62 5.88 1.61 0.54 0.36

Stock Adjustments 90.81 480.34 78.36 88.40 58.00

Total Income 1,921.77 2,144.56 1,465.44 1,282.87 943.26

Expenditure

Raw Materials 1,608.55 1,827.96 1,222.42 1,095.51 814.70

Power & Fuel Cost 5.03 3.51 2.22 2.09 0.00

Employee Cost 61.41 55.10 45.75 40.52 30.72

Miscellaneous Expenses 107.44 104.88 71.38 57.67 50.36

Total Expenses 1,782.43 1,991.45 1,341.77 1,195.79 895.78

Operating Profit 132.72 147.23 122.06 86.54 47.12

PBDIT 139.34 153.11 123.67 87.08 47.48

Interest 46.35 21.49 31.48 22.82 19.61

PBDT 92.99 131.62 92.19 64.26 27.87

Depreciation 9.99 8.04 5.26 4.00 3.07

Profit Before Tax 83.00 123.58 86.93 60.26 24.80

PBT (Post Extra-ord Items) 83.00 123.58 86.93 60.26 24.80

Tax 27.94 38.56 29.73 20.85 7.85

Reported Net Profit 55.06 85.00 57.19 39.42 16.94

Total Value Addition 173.89 163.50 119.35 100.28 81.08

Equity Dividend 15.01 15.00 5.00 0.00 0.00

Corporate Dividend Tax 2.55 2.55 0.81 0.00 0.00

Per share data (annualised)

Shares in issue (lakhs) 667.04 666.67 500.00 500.00 100.00

Earning Per Share (Rs) 8.25 12.75 11.44 7.88 16.94

Equity Dividend (%) 22.50 22.50 7.50 0.00 0.00

Book Value (Rs) 67.11 61.51 31.92 21.42 68.46

Dividend History

Index and Company Price Movement Comparison

Symbol Value Action

RSI(14) 62.868 Buy

STOCH(9,6) 51.653 Neutral

STOCHRSI(14) 93.647 Overbought

MACD(12,26) 12.830 Buy

ADX(14) 22.953 Buy

Williams %R -28.303 Buy

CCI(14) 108.4129 Buy

ATR(14) 21.7964 Less Volatility

Highs/Lows(14) 6.5464 Buy

Ultimate Oscillator 47.184 Sell

ROC 17.805 Buy

Bull/Bear Power(13) 20.4760 Buy

Technical Indicators

PBIT – 6.70 v/s 8.36

RoCE – 12.79 v/s 17.60

RoE – 12.85 v/s 29.95

Net Profit Margin – 3.00 v/s 5.10

Return on net worth – 12.29 v/s 20.72

D/E Ratio – 1.26 v/s 1.01

Interest Cover – 2.79 v/s 6.75

Current Ratio – 0.91 v/s 0.95

Reserves – 380.97 cr v/s 343.40

PAT – 55.06 cr v/s 85.00 cr

Total assets – 1011.11 cr v/s 824.08

Net sales – 1824.34 cr v/s 1658.34 cr

Book Value – 67.11 v/s 61.51

Days BSE NSE

30 161.97 162.02

50 163.71 163.73

150 158.81 158.87

200 164.69 164.79

Important Ratios (YoY) Simple Moving Average

Investment Rationalize

TBZ Ltd. is one the largest and well reputed branded Jewellery Group of the country with a market

capitalization of Rs.980 crores and sales Rs.1824 crores.

Company is being able to sustain a 15.8% CAGR of Revenue even in the adverse market conditions.

Increase in working women population and increase in demand of branded jewellery will help the company

to increase the sales.

Very aggressive expansion plans ie opening jewelleries even in tier 2 and tier 3 cities and functioning of 57

showrooms by the end of year 2015 will give wide coverage for the company. Company will be able to

capitalize on increase in disposable income, rapid growth of Indian middle class population and consideration

of gold as an investment and savings avenue in a healthy manner.

According to a recent report by FICCI on the Indian Gems and Jewellery industry, the domestic market for

the sector was pegged at Rs.2,51,000 Crores in 2013 and has the potential to touch Rs.5,00,000 –

Rs.5,30,000 Crores by 2018.

New products and design from different parts of the world such a Italy, Turkey, Thailand, Singapore, etc, will

add cutting edge for the products.

Online selling and proposed changes in gold import will add to the growth and advantage of the company to

a large extent.

Price to Sales Ratio of the company stands at 0.54%, which means the stock is available at discounted price

and under performance of the company in the recent bull run refers to huge upward movement in the stock

when the economic condition improves.