Tribhovandas Bhimji Zaveri Ltd -- TBZ



TBZ is a well known gold retailer with 15 showrooms in 9 cities across India, predominantly in Western and Southern India. Company opened its latest show room in Church Gate Mumbai in july 12.

Expansion Plans:

TBZ currently has around 50000 sq ft of space which it intends to increase to around 1. 5 lac sq feet by adding 42 (a mix of 24 large format and 18 18 small format high street stores) new show rooms and cover 14 states in the process by FY 15.

The company claims to be a jeweller of choice for wedding occasions and hence can look forward to fat billing during wedding season.

From whatever talk I had with the ladies folks, they swear by the TBZ brand name and even the sale held in various cities where there are no show rooms of the company are big hits with ladies looking for shopping. Innovative designing is the hallmark of TBZ.


Outstanding shares 6.66 crores of Rs 10 each with promoters holding 74% shares with no pledging.

Company came out with IPO in the price range of 120-126 during april 2012.

Period q1 fy 13 q4 fy 12 fy 12 (12M)

Sales 282 267 1380

OP 27.38 18.22 116.8

Interest 3.91 7.85 31.48

NP 16.27 7.54 57.19

EPS 2.44 1.51 8.7

As on June 12 results, company has around 178 crores of unutilised funds from the IPO out of which 160 crores are earmarked for incremental working capital requirements and 18 crores are for establishing new show rooms.

**According to some projections by Antique report, company is projected to achieve 42% sales CAGR and 52% profit CAGR over the next two years and projected profits for FY 13 and FY 14 are estimated to be 87 and 132 crores. **

These are just for reference purposes bcos one needs to see whether projections are met or not.

Looking at the expansion plans of the company and the strength of the TBZ name behind it, the current market price looks attractive for long term investors.

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The projections look too aggressive. Let me check with the guys here in Chennai and get back.

The women I have spoken to are of the opinion that tanishqs designs are more elegant and subtle where as TBZ caters to the taste of middle aged women

I think TBZ should do well In hinterland of north and west of country where as tanishq should do well across the country - probably barring south where there are many strong local players

for those interested in q1 fy 13 investor update

the company seems to be interested in keeping the investors updated.

good detailed update.

a new show room of around 3700 sq ft is slated to open in baroda on 16 th august.

Will visit it with wife to get a better idea on where they score as compared to the local jewellers.

I think it is being lumped together with other jewellery stocks with much inferior brand recall. Stock seems to be hitting fresh lows so need to see where it settles down.

from the presentations and feedbacks of customers in the family I get the impression that they specialise in wedding jewellery and fashion jewellery.

I think this looks like a story in which if things fall in place in terms of expansion without too much balance sheet stress, there could be good upsides.

I’m wondering if you have done any comparison between Gitanjali and TBZ or among any branded Jewelers in India.

Sometime back there was a comparison on equity master where the author compared Titan, Gitanjali and Shree Ganesh and concluded that Shree Ganesh was a better investment.

My personal choice is Gitanjali even though there is some issue on margin and debt front.

IMHO, jewelers having large format showroom would be more successful. If I’m not wrong Titan has done that well and Gitanjali is following it.

In general, I’m bullish about branded jewelers. High growth opportunity.


Was comparing Thangamayil and TBZ and feel Thangamayil is better placed:

  1. Both have similar margins - both EBITDA and NP

  2. Both are in expansion phase, but TBZ could be expanding in unknownterritory (diff states have diff preferences) whereas Thangamayil is expanding in familiarturf with similar customers.

  3. TBZ is in direct competition with tougher competitors like Tanishq and other brands in big cities catering to same middle-upper middle class whereas Thangamayil may face less competition by taking on smaller players in tier-2-3 cities/towns.

  4. TBZ’s P/E is double that of Thangamayil.

Views invited



I think the brand value of TBZ is very strong. (this is a personal opinion having talked to a lot of ladies who want to go for buying jewellery esp wedding jewellery). There doesnt seem to be any jewellers atleast in gujarat who catch the women’s fancy as TBZ does.

Thangmayil as you say is having the advantage of growing in familiar turf. But it will start facing headwinds once it starts looking at unfamiliar terrain to grow.

Even in Mumbai people swear by TBZ name. key remains how the management carries out the expansion plans without stretching the balance sheet too much.

I think next 3-4 quarters would be crucial test for them (they are adding some 6-8 stores?)

they are doing this expansion after 3-4 years and the increased costs are bound to effect the financialefficiencyratios

)+ as Vinodpointedout they would be stepping out from their territory of Maharashtra and Gujarat where people hardly know TBZ brand

I am not sure how do the Zaveri brothers share the brand

if all of them are allowed to open stores in the same name

market is not differentiating betweendiamondjewellerymanufacturers and Jewellery retailers

except of Titan none commands a premium of a retailer

diamondJewellers usually have poor corporategovernancetrack

for TBZ to rerate

1). they would have to show that they can expandsuccessfullyand efficiently

2). and deliver on corporate governance

Hi Hitesh,

After recent fall in TBZ it has become interesting. Also gap between Thangamayil and TBZ has narrowed.

TBZ is small fish in big pond and TMJL is big fish in small pond. They are dominant in smaller cities. TBZ is in A’bad since 5 years but they are not in even top 5 players. On positive TBZ is strong brand but TMJL is also strong brand in their market. Though not a premium brand, but trusted brand.

I would say TMJL is Wal-Mart of gold jewellery. Value of money and low overheads high turnover.

ON plus side to TBZ, they still have money from IPO. Debt is less. We need to see how they execute. TMJL execution for new stores is proven now.

On minus I thing all stores of TBZ are rented and at least some of them are owned by promoters. So there may happen conflict of interest. TMJL owns some of the big locations. Others are rented but not owned by promoters.

Even though TBZ is premium brand and percentage of diamond may be higher, overheads of TMJL does the balance.

And the last part that I like about TMJL. Willing to share with shareholders. Dividend is good even with growing demand for funds for expansion. TBZ needs to show that they are not Suraj Diamonds. Last year dividend was like nothing.

On sales and profit TBZ and TMJL both are nearly equal. Even if gap has narrowed TBZ is more than double of TMJL.

One thing is clear though. Both will grown in coming years and both look cheap.


I more than agree with what you have said

I think bound to screw with an expansion of more than 50% in a year

From 14 stores to 20-22 stores

That too it is adding new stores first time 4 years

And finally there might be a thousand TBZs but there is only one tanishq

Hitesh Bhai it would be interesting to know how the baroda store does a week after the opening

They don’t generally charge the “making charges” for first few days therefore the new stores are crowded during the promotion period

The only fear I have is the stock is in weak hands as most of the retail people apply for IPO gains if the stock falls they will start exiting leading to new lows. Jewellery industry is seeing less volumes due to high prices of Gold . So hard times for jewellery industry.Long time future looks bright for TBZ .Due to lower margins looks like the PE will remain same around 10 -11

I have checked with many of my collegues here in Chennai.None of themare aware of the company though they buy goldjewellery in T Nagar.

I think TBZ brand is much much valuable than Tanishq brand … they have got 150 years of expertise … 10 years back when i used to tavel from Grant Road to Churney Road, I used to see their big outlet and admire that brand … never imagined in future I will also be owner of TBZ

Now like titan, Hawkins they should also start gifting copuons to shareholders :wink:

I mean it should be although I don’t know fact (I think TBZ brand is much much valuable than Tanishq brand)

TBZ is stronger brand inWesternindia … u can’t judge its value by taking viewws from south :slight_smile:

Chennai.None of themare goldjewellery

Margin are veryinsignificantrelative to


2)Gold volatility dependancy

in this business

I think this is a retail story in jewellery segment unfolding before us. Management seems to be walking the talk of increasing floor space in a phased manner. We all know that as long as there are womenfolk in this world, jewellers are never going to remain idle.

Coming to the risks as I perceive in this company:

1). Inventory risk – sudden crash in gold prices can virtually kill these kind of companies.

2). Debt: In pursuit of fast growth it needs to be seen how the management handles the debt situation.

Barring these risks the growth in sales and profits looks quite probable.

As mentioned earlier, brand strength of TBZ is very strong in mumbai, gujarat etc. They are doing the classical Lynch method of expanding: replicating the success of the business in one city to another.

Management intent is to increase the sales contribution from diamond sales to total revenues as margin is much more in case of diamonds.

If this can keep growing at 25-30% cagr for next 2-3 years there is bound to be re rating bcos of the strong market appetite for retail stories. One needs to see how much of risk reward is there at current market price.

Personally I have a holding in this company from the time of posting this synopsis. The stock price had a sharp run up from its low of around 90 to 120 recently and now has again come back down to 100 odd levels.

" I’ll tell you a riddle. You’re waiting for a train, a train that will take you far away. You know where you hope this train will take you, but you don’t know for sure. But it doesn’t matter.

How can it not matter to you where that train will take you?" (Mal, Inception)

There are quite a few Ts in Indian jewelry - Tanishq, Tara, Thangamayil, TBZ, etc., and most of them are currently riding three trains: increasing gold price with little change in average value purchased; increasing shift from unbranded to branded (with the Ts stealing market share); and the Indian consumer story (growing middle class, rising per capita income, increasing number of working women, etc.). Their situation is no different from what Mal said.

There is, unfortunately or fortunately, only one, which can be considered a brand (logo, ethics, high quality products, range of products for customers across the country, price, high quality customer service, etc.) - Tanishq. Rest others are copycats or freeriders and trying since they realized Tanishq cracked it major time. Most of them, are simple, commodity sellers.

I am not going to talk about the positives of TBZ here; this thread and many others are just too biased towards the “good things”, with little on the negatives, an important tool to separate the wheat from the chaff as Pat Dorsey said, and which seems the main theme of this forum.

)- TBZ - This Brand is Zero; why? The BrotherZ. There are three known (and maybe more) variants of TBZ, each owned by a member of Zaveri family, which have separated from each other on really bad terms. Just ask one of the sales executives in TBZ Nirmal Zaveri about the other two, and try the other combinations as well. They say quite a lot of things, and it might be difficult to find what is right or wrong, but at the end of the day, TBZ is a diluted brand, with multiple doors opened for negativity to creep in. This is the biggest turn off for me. The brothers, arms against arms vs. the brothers in arms in case of Thangamayil.

)- Customer service? I will rate them1/10on this one - this comes from personal experience at the most of the “brand” stores in Mumbai and rating them on various parameters, including customer service. Not only there is a significant difference between a Tanishq and TBZ, but there is a difference between TBZ, TBZ NZ and the TBZ at Mulund. Examples: showing/not showing the stock to a customer based on their understanding of whether or not a person can spend that amount; restlessness among the employees when customers take time to decide (to which their employees sometimes just say that “we dont have it”), etc.

)- If you want to buy designer wear, you will go to a designer and get something customized made for you…what has TBZ got to do with “great designs”? That to me is just selection/availability bias. There is no way you can look at a necklace and tell it is from TBZ. And btw, the lack of skilled designers and craftsmen is the biggest problem in terms of employees. You cannot manage 43 stores with limited set of designers and skilled people.

)- There is no differentiation between a TBZ or Gitanjali or Tara, by looking at their ads if you were to remove their names from the ads. What does it mean? Neither their products nor other soft aspects are strong enough to make them a brand. You wanna know what brand is? Check the products from Tanishq. Check products from a chinese company called Enzo. You can look at the products, logo, theme and other soft aspects and tell from which brand they are. TBZ is a far cry. If I would put across a portfolio of products or pictures of store interiors, most will not be able to tell which is what!

(2 days ago there was an article on ET, which had the following quote, "After all, as Kiran Dixit, group head for advertising & marketing at TBZ - The Original, points out: “Jewellers who are active on the marketing front have hardly done any differentiation.If you hide the logo of any jewellery ad, it’s very difficult to identify which jeweller’s advertisement you are looking at.”)

)- Then there is something called as making charges, which can make or break the deal for the most, as this is what provides them margins. Notice the comment, "Dixit of TBZ-The Original says: “Everyone in the market wants to attract more and more customers and enjoy maximum market share. This has resulted in intensive price wars in terms of giving discounts on making charges or selling at cutthroat prices.” The customer will not make the high making charges people used to pay earlier. 10-13.5% making for a quality product from a trustworthy brand that will assure quality returns as well upon resale, is maybe what most will be okay with. In case of TBZ and many others, its difficult for a customer to get reasonable value. Its a big put-off. At the end of the day, if you’re not a brand, and you are selling a commodity, then you should be treated as such, and not “a brand play”.

)- Say you could buy a rose plant that gives 10 roses everday for 450 rupees, from someone in a village. This plant is quite special - it will give 14 roses everyday next year, 20 roses everyday the next year, 26 roses everday the next, then 33 and then 40. The best thing is, after 5 years, you can sell it for 4000 and along the way you have collected the proceeds from selling someof the roses. Not bad, eh?

Let’s see.

A friend of yours bought a similar rose plant from someone in Mumbai. It also gives 10 roses everyday. He bought it for 1200 rupees. This plant will give 13, 16, 20, 24 and 28 roses in the years to come. Along the way, your friend will have to spend more than you on the plant because he is living in Mumbai, an expensive city, where gardner, fertilizers and taking care make a big hole in the pocket. Then there could be drastic weather conditions as well. Who knows? Your friend’s rose plant might just not be able to deliver as your friend expected. As a result, he will be happy even if he is able to sell the rose plant for 2800 rupees. In fact, he is willing to let go of the sales proceeds in order to be able to sell the plant at 2800. (btw, there is hardly any difference in the quality of the roses from your plant as compared to roses from your friend’s plant. Its just that your friend sells the roses with red ribbon, plastic, etc.)

Who do you think is smart? Of course, you :slight_smile:

Thats the comparison between Thangamayil and TBZ.

(there are equivalents of price, p/e, dividends, roe, multibagger returns, rent, salaries, diamond as higher margin business, mumbai based and oriented jewelry firms and town/village orientedjewelry firms, and risk in the example above, for those of you who are wondering what was it about?)

(the example becomes more interesting. Plants have feelings, dont they? So, the rose plants can decide if they want to grow or destroy themselves, by taking appropriate rational and emotional decisions. This gets better. The thinking ability and strength of the plants vary, and change with time, and depends on their ability to apply successful thinking.

That’s an equivalent of promoters)

( Oh, and for those who are thinking a 150 year old plant will have more worth than a 50 year old or 10 year old. Think harder. You only get paid via sale of roses (dividends) or sale of the plant itself (dependent on the number of roses it gives) (returns))

)- Oh btw, for those of you who think the company has an amazing website and online presence and what have you…try referring to a product code on the website to a sales executive and share your experience (in my case, none of the codes were recognized by the executives in various stores).

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