ValuePickr Forum

Vaibhav Global : Back from the dead

The US & UK business is routed through Genoa Jewelers BVI. Both – The Jewellery Channel UK & The Jewellery Channel US are subsidiaries of Genoa. Probably it gives the company a tax advantage, which is why such an arrangement is arrived at (my guess).

To go deeper into the group’s inter-company relationships & transactions, one needs to see the standalone statements of Genoa & its individual subsidiaries, which are not available on the website. Website only gives Genoa’s consolidated statements.

Indeed, complicated organization structures like this are a big risk factor in investing in such companies.

Thanks for your inputs Chandra, as you said lack of calrity on this is the only thing that is holding me back from Investing in this stock.


It’s interesting that jewelry also has health & safety issues.

Very good result by vaibhav global.

https://beta.bseindia.com/xml-data/corpfiling/AttachLive/53fafe81-0a86-43d2-9b85-579a3dbaf227.pdf

Disc - invested

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It is good to ask as many tough questions as possible but it will save some time, if questioners do some background nos crunching of previous calls at least last 4-5 qtrs on business model, B2B + B2C etc + last 4-5 years AR …

Otherwise just wastage of time…

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The company is doing well both on revenue growth and PAT terms. Balance sheet has improved also 100 Cr net cash + ROCE and ROE has increased substantially, Worth a revisit in my opinion

Q&A
• Social media like Instagram would help create more brand awareness?
We have done. It didn’t work. Then changed the strategy.

• Proportional of sales through the APP is not that high?
We are investing in the apps. However, audience watching us for long hours on TV and Laptops. AI augmenting where customer can see the product on their own self.

• Inorganic growth, more dividend, capex plan as more cash flow?
Dividend is only visibility, no plan of capex in next 2 years, inorganic growth no plans yet.

• Market growth rate in US and UK, changes in competitive landscape?
Listed competitor reports 3-5% growth rate.

• How should one project sales and profitability in medium term?
US and UK markets are good. Our market share is 2.3% vs the listed companies which was 2% last year. Market size is big. We are the lowest product producer. Best cost structure in the industry. Confident of mid-teens growth for the next 2 years.

• Competitors took decades to reach to the size. Possible for VGL to reach there?
We want to grow at consistent pace, and not looking to be billion or trillion company.

• Employee cost grow yoy and % of revenue?
2 factors. This year we are performing ESOPs which goes in employee compensations. Cost booked from Mexico to inhouse. Call center in Mexico was in admin cost.

• What ked to this volume growth? Will it continue?
We give no guidance on volume growth. We are multi category and multiproduct company and therefore revenue growth is important. ASP 25-28 price points.

• Reason TV broadcast cost reducing so how will we reach to more customer?
Almost 2 years, we have optimized cost structure. Through negotiation, exiting non-performing location. Going forward broadcast may remain stable or go slightly up.

• Guidance of 14-16% revenue growth?
Yes

• Rupee depreciation benefit on margin expansion? Forex gain?
Yes

• ESOP cost?
4.4cr this quarter. It will continue due to application of IND AS. This is just change in accounting process comparing before Apr 2016.

• What % of revenue from Budget EMI?
Around 39% (39% in US and 37% in UK) vs (35% US and 36% UK) yoy.

• ASP up in tv and web, but gross margins lower yoy?
This quarter B2B business is higher which is lower margin. Not a core business. Guidance of 60% + gross margin.

• One subsidiary that has been formed, how will it contribute?
China, we have manufacturing process. Currently we export from Hong Kong, now this will be from China directly.

• Elaborate on welcome pack?
UK this was going on. It consists of letters from local business head unit with samples of some products like perfumes.

• Tariff war? Import duty?
We look this at opportunity. Our gross margin are very high vs competitors. It will impact them more and least to us as will be more competitive.

• Lifestyle products contribution?
Around 14%. More or less same margins however customer retention is less. Promote this form same channels, Amazon, ebay, Walmart.

looks like good time to sell the stock … earnings are cyclical highly correlated to U.S economy.

Growth emerging, but working capital also increasing extensively. Gives sense that EMI option, delaying receivables propelling growth. Okayish signal

Dec numbers should be pretty good. Holiday season for USA and UK.

Very good result declared.

Company has managed to grow its B2C revenue well. B2C revenue grew at 23% for the quarter. Although profit growth was slower. Need to hear the con call today to understand more in detail about the slower profit growth. As my initial hypothesis was also about an increased operating leverage.

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I came across this company recently, just want to know , why promoters are selling in open market. They have been consistent sellers in the past 12 months.

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Vaibhav Global Ltd Brett Plastics Private Limited - Promoter Group purchased 25,000 shares on 26 February

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I am also tracking this company…

Inspite of very good results and very attractive business model company avaiable at very cheaper vaouations!
People like Malabar india, Nalanda india,Vijay kedia ,asish kacholia holds significant stake…

Company selling their jewelery in us and uk through tv channels and e-commerce platforms.

Malabar indias sumeet nagar describes vaibhav global as unicorn investment!!

I have just started my portfolio can i buy this pls advice me…

Warren Buffett on the activity you did -

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Gems and Jewelry sector has been a no go for my portfolio since Long as this sector especially in India is perceived to be riddled with corruption , money laundering terror money etc. Titan is perhaps one of the few exceptions.Please read this link below where there are serious charges on the promoter Mr Jain related to paying bribes and soliciting through ‘ excotic dancers “.

http://www.diamondworld.net/Content/Indian-jeweller-faces-bribe-charge-in-US/506 .

This is a very old case and he paid the price for the same. Ashish Chugh had recommended it when it was 20 levels and I gave it a pass after reading the past. They have collected some marquee investor names over time and market seems to be forgiving for the time being. Don’t think they would do the same mistake again. I have no holding here.

I believe Mr. Agarwal was not even involved in this directly. Since then business model has changed a lot for good. Trading at very attractive level. Dividends too will be coming.
Holding - adding more at every fall.

I had Vaibhav in my portfolio which I have sold after seeing this news albeit old one.