TBZ sales declined by 7.5% and SSG declined by 3.6% on soft demand for Jewellery, high base in 1Q18 and inauspicious days in June'18. Gross margins expanded in both Gold and Diamond, however, EBITDA margins declined 110bps due to heavy spending on the newly launched wedding Jewellery range, changed strategy of communication and rationalization of...

of some sales due to GST in 1Q18. Operating parameters continued to improve with1)Goldonleaseat64.4%2)expansionindiamondgrossmarginsanddecline ininventoryand3)declineinoperatingexpenses.TBZhasstarted3Qongoodnote (PMLA withdrawn) and medium term outlook based on expanding franchisee operations and shift towards organised sector led by compulsory hallmarking, mandatoryPANcardrequirementandrestrictiononcashsalesremainsintact.We estimate17%salesand50%PATCAGRoverFY1720.TBZtradesat16.8xFY20EPS....

TBZ Play on jewellery market shift towards organized players ............................... 4 Increased compliance levels to aid organised players ...................................................................... 5 TBZ on cusp of new growth phase.............................................................................. 8 Own store expansion in 2013 backfired ...................................................................................... 8 TBZ, well placed to capture likely upturn in jewellery trade ............................................................. 9 TBZ moving towards a Franchisee based model ...................................................... 10 Sales to grow at a CAGR of 20.9% during FY17-20E ........................................................................ 13 EBITDA margins to expand by 120bps over FY17-20 ....................................................................... 13...

TBZ has reported revenue of Rs. 6125 mn which is an 18% growth on a YoY basis and a 44% growth on QoQ basis.Company has reported Gross margin shrinkage of 480 basis points and 250 basis points on Gold and Diamond Jewellery respectively.

Karvy initiates coverage of Tribhovandas Bhimji Zaveri Ltd with a Hold Rating: We expect TBZ's Same Store Sales (SS) in per square feet realization is expected to remain below FY12 levels during FY15 and FY16. ? In our opinion, revival in the Same Stores Growth (SSG) volume is likely to be lower than FY12 levels amid weakening gold prices. Volumes of sales in old stores (opened before FY13) are expected to grow at a CAGR of 4.9% in the next two years and thus will be less than FY12 levels.