Evaluate Manoj Vaibhav post listing, and then take a call
Manoj Vaibhav Gems 'N' Jewellers (MVGNJL) is a hyperlocal jewellery retail chain with 13 showrooms in Andhra Pradesh and Telangana. Proceeds from the IPO are going to be used towards capex and inventory costs of eight new showrooms.
Promoters, who hold 100% of the company, are selling a 25% stake.
Business
Established in 2003 by late Manoj Kumar Grandhi, MVGNJL has around 4% of the Andhra Pradesh and Telangana jewellery market. It has three-fourthS of its stores in tier-2 and -3 cities catering to the semi-urban and rural demand.
However, the company's flagship showroom in Visakhapatnam is its largest and generates 62% of its revenue.
Financials & Growth Prospects
The company's performance was adversely impacted during FY21, a Covid-impacted year. Its revenue rose from ₹1,434 crore in FY21 to ₹2,027 crore in FY23, while net profit increased to ₹21 crore from ₹72 crore in the same period.
Return on capital employed improved from 9.5% to 23.2% and return on equity rose from 10.5% to 17.7% during period.
Debt equity ratio stood at 1.27 at the end of the June quarter of the current fiscal year, having dropped from 2.0 in FY21. It intends expand in cities with majority unorganised markets.
Its strategy is also to strengthen the rural focus due to inelasticity of rural demand for gold.
Valuations
The IPO values the company at 13.6 times its estimated annualised earnings for FY24. While the valuation may seem attractive when compared to its larger national as well as regional rivals such as Titan, Kalyan Jewellers, Vaibhav Global and Thangamayil Jewellery, the company is a small-sized hyper local player operating in a highly competitive and price-sensitive market.
Besdies, jewellery retailing is a working-capital-intensive,
