- 14 Feb 2022
- ICICIdirect Research
TCNS reports strong operational performance aided by robust festive salesTCNSBRANDS - 415 Change: 2.15 (0.52 %)
News:TCNS reported a good recovery with revenues matching pre-Covid level. Revenues grew 38% YoY to Rs.328 crore (Q2FY22 : Rs.239 crore; Q3FY20: 329 crore). Gross margins improved on a YoY basis by 670 bps to 67.8% (pre-Covid : 67.8%) but increased Employee expense to sales ratio (up 201 bps YoY) and higher selling expenses to sales ratio (up 276 bps YoY to 25.8%) curtailed the EBITDA margin expansion to 300 bps YoY to 19.2% (Q3FY20: 20.6%). Absolute EBITDA grew 64% YoY to Rs.63 crore. Consequently, PAT grew 98% YoY to Rs.25.1 crore.
Views:The Q3FY22 revenues matched the highest ever sales recorded by the company in Q3FY20 in spite of Covid led disruption towards end of December in Q3FY22. The recovery has been more evenly distributed across cities and small towns and various store types. While online sustained its growth momentum, recovery of the offline channels to ~90% augurs well for the company. The company has accelerated its store expansion plans and added 18 stores in Q3FY22. It plans to add 25 more stores in Q4FY22 and exit FY22 with 600+ stores. The company has remained cash accretive in four out of the last five quarters driven by continued recovery, cost mitigation & working capital reduction and current cash reserves at ~ | 180 crore, which is higher than pre-Covid levels