I attended Vaibhav Global's AGM today at their corporate office at Jaipur & I am writing AGM updates from Jaipur Airport itself
** AGM Updates:**
1.Promoter (Sunil Agrawal) is very-very down to earth person & he freely interacted with most of individual inventors on one & one basis and answered almost all the question which we may have.
2. Mr Sunil told that Toal Addressable market for their business in US alone is 20 B USD & they have able to reach just 1% (200 M USD) as of now & given a hint that what will be the bottomline once they are able to achieve even 5% of the total Market in US (~1 B USD).
3.They have invested in IT last few quarters & setting up a new facility in SEZ (around 1 kms away from the existing facility & new facility will have almost 140% capacity & most of the work will move to new & better facility. All the Capex for that is already done, so they are not expecting any more capex in near future.
4.Promoter feel with new Hybris based web platform they will be able to serve their web based customer better with data analytics capability available in new web platform, so they can do some analysis on customer behaviour who are visiting their web site & they feel that going forward more sell will move to web based catalogues based buying & that will improve margins.
5.Mr Sunil informed that unlike India, US ppls dont prefer to use Mobile APP, instead they want Mobile & tablet compatible web site, so that they can view & order thru Mobile/Tablets on the go/any place.
6. Promoter wants to keep the EBDITA at least in double figure, So thy are fine with 15-20% revenue growth, but they dont want to grow by 50% plus with low EBDTIA Margin and he mentioned that QVS has 40% gross margin and 21% EBDTIA and they have 61% gross margin but 11% EBDTIA.. So they feel that once they increase sell even by 15-20% but EBDTIA margin will improve more than that due to Operating leverage.
7. Promoter were very optimistic for their business post Q2 this year, as they have already given guidance for softer Q1 & Q2 and robust results Q2 onwards.
Promoter arranged a factory visit for 7-8 shareholders (including me) without prior appointment & Mr Unnat Gautam (Who guided us in the factory visit) was very-very open to discuss/disclose anything which we asked and after visiting their factory I am convinced that gem stone Jewellery making process is very specialised job (need very Skilled labour) & can not be replicated in any part of World including India very easily with same level of economics. They treat they Workers very well (both permanent & contract workers) & pay higher side of salary to retain them with Vaibhav Global.
All in All I an say it can be good 25-30 CAGR grower & if they are able to shift more & more customers from TV to Web then we can see even better margins..
Anybody has any other questions then let me know, if I know that already then I will try to answer those..
** One more thing that they also started Stretch pay in US market to counter competition poised by JTV in US & they said that they will increase price by 1-2% to recover any addition cost incurred by them for Stretch pay and as these payment will be done by Credit Cards for 3-4 instalments, so these are relatively safe transitions & very less (1-2%) risk of default on EMI/Stretch payment..