9 June 2020 While 4QFY20 results came in above expectations, negligible Apr20 sales due to lockdown, 1015% of normal sales in May20, and around 40% of normal sales in Jun20 are likely to render 1QFY21 a near washout. Management expects gradual recovery, targeting normalcy only in 4QFY21. In addition to the COVID-19 impact, higher prevailing gold prices and managements reluctance to reduce staff costs, while good for long-term growth, would have an adverse impact on near-term profitability. Lower other expenses as a percentage of sales (70bp YoY to 9.3%) and lower ad spend as a percentage of sales (80bp YoY to 2.1%) were offset by higher staff costs as a percentage of sales (20bp YoY to 6%). A) B) Watches segment sales grew 5.1% YoY to INR5.6b, with the EBIT margin up 740bp YoY to 9.