TVS Electronics - Very high stock-in-trade

TVS Electronics has recently come up with Q4FY16 numbers. Numbers look good on YoY basis.

Revenue (Consolidated)
FY15 = 270 cr
FY16 = 594 cr Growth = 120%

Net Profit (Consolidated)
FY15 = 2.2 cr
FY16 = 4.9 cr Growth = 123%

My Question
The purchase of stock-in-trade which is a sub-item of Expenses had risen to 389cr in FY16 from 76cr in FY15 which an increase of 411%.

Can some one explain what does this mean in reference of TVS Electronics?

The stock seems to be breaking out. Looking at numbers I find a huge surge in sales in FY17 ie from 59,349 to 2,62,503. But they didn’t seem to mention anything about the breakup in annual report.

They have started a new distribution business of mobile phones from 2016 which contributed to the bulk of the revenue in FY 17. This, in fact was mentioned in the AR of 2016 and also reiterated in 2017. Copying verbatim here from 2016 AR

“During the year, the Company forayed into ‘Distribution Services’ by tying up with one of the reputed international mobile phone manufacturers to distribute their products in India through e-commerce route. Though the revenue from this line of business is high, the margins are low due to the inherent nature of the business of distribution.The Company is building up valuable experience by distribution through leading e-commerce portals.”

Revenue contribution from AR 2017 notes:


Even an ‘e’ focussed manufacturer like MI is building physical stores. What volume growth can we expect for CY 2018? With razor thin margins, we may need volumes to grow EPS.

Looks interesting and we need to see how much scale is possible. My worry is that MI is going offline sales route.

Just ran google trends,redmi,redmi%204,redmi%203

What is going on with this stock? Any Idea ?

Not Invested or Interested. Just curious.

Following is the sentimental breakdown of Revenues, PBIT, Capital Employed & Return Rations between IT Products & Distribution services:

Credit Rating report.

Interesting development seem to be taking place in the co, where co tied up with Tata Cliq and Amazon, plus onboarded two lifestyle brands. Co is looking forward to enter into EV space (TVS 2W EV) by installation, maintenance and operation of charging station and servicing of EV.

Amit Anam