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Vaibhav Global Ltd. (VGL)
QQ44FFYY1144RReessuullttUUppddaattee––2233MMaayy22001144
4
Recommendation HOLD Outlook continues to remain positive
Despite Q4 being a seasonally weak quarter, VGL reported result in-line of our
expectation where net revenue grew by 58.3% YoY to Rs. 259.6cr largely driven
on volume growth and marginally down by 2.9% QoQ (Q3 being the strongest
quarter). EBITDA up by 740bps YoY margin at 9.4% and down by 360bps QoQ.
During FY14, VGL has repaid Rs. 52cr of debt from the cash generated from
operation and plan to make the company debt free in FY15E. The dollar
revenue grew YoY 31% in FY14 and management expect to maintain the
growth going forward. Additionally, EBITDA margin is expected to improve
marginally since rupee is appreciating company may not have forex gain
compared to Rs. 19cr in FY14. Carry forward losses have exhausted and
company will be paying tax in FY15E onwards. Management guided for 25% tax
for FY15. We continue to like asset light business model of VGL which can
generate high ROCE and free cash. VGL has stabilized itself as a retailer of
discount fashion accessories through TV channel in US and UK market with
access to over 100 million households and also trying to monetize its TV channel
through development of web sales. We have introduced FY16E numbers. We
expect VGL to report an EPS of Rs. 45 and Rs. 58 in FY15E and FY16E
respectively. At CMP of Rs. 740, VGL is trading at a PE of 16.5x FY15E and 12.8x
FY16E. We roll-over our target multiple to 16x FY16E with a TP of Rs. 925 per
share. We maintain HOLD rating.
 Higher growth in TV and Web volumes led to substantial jump in Net
revenue: Despite Q4 being a seasonally weak quarter, VGL have clocked a
strong net revenue growth of 58.3% YoY in Q4FY14 and marginally down by
2.9% QoQ (Q3 is the strongest quarter) to Rs 359.6cr mainly led by higher
volumes, and relatively stable price realization. The TV volume registered a
growth of 24.5% YoY and Web volume growth of 71.3% YoY.
 EBITDA margin improved YoY: VGL reported an EBITDA margin of 9.4% was
up by 740bps YoY and down by 360bps QoQ. The expansion in margin is
attributed to the jump in sales and decline in employee cost by 150bps Yoy
to 16.5% in Q4FY14 and Other expenses by 540bps YoY to 38.1% in Q4FY14.
In addition, Gross Profit was up by 61.2% YoY to Rs. 226.1cr and down by
10.2% QoQ. Gross margin increased by 120bps YoY to 62.9% in Q4FY14.
 PBT (excluding exeptional item of Rs 167cr in Q4FY13) up by 51% YoY:
Despite forex gain of Rs 19.2cr and excluding Rs 167cr as an exceptional item
in Q4FY13, and forex gain of Rs 1.5cr in Q4FY14, the PBT was up by 51% YoY
to Rs 29.8cr.
 VGL to be taxable from FY15E onwards: Management has guided that from
FY15E onwards, on consolidated level, VGL will be taxable in range of 25%.
 Sales to be moderated in Q1FY15E: Due to inventory compression
(inventory reduced in the channel front in dollar terms by 14% but sales
increased by 31%. Management is taking corrective action where inventory
compression will be from sourcing end and not from channel end) and
outsourced call centre in US to third party in Q4FY14, the sale is expected to
be moderated in Q1FY15E which is expected to improve in coming quarters.
CMP Rs. 740
Target Price Rs. 925
Sector Retail
Stock Details
BSE Code 532156
NSE Code VAIBHAVGBL
Bloomberg Code VGM IN
Market Cap (Rs cr) 2413
Free Float (%) 62.9%
52- wk HI/Lo (Rs) 830/122
Avg. volume BSE (Quarterly) 5364
Face Value (Rs) 10.0
Dividend (FY 14) NIL
Shares o/s (Crs) 3.2
Relative Performance 1Mth 3Mth 1Yr
Vaibhav -1.4% 12.1% 506.8%
Sensex 6.7% 17.4% 20.8%
Shareholding Pattern 31
st
Mar 14’
Foreign Promoter
Indian Promoters Holding
3.8%
37.1%
Institutional (Incl. FII) 45.4%
Corporate Bodies 4.9%
Public & others 8.8%
Ruchita Maheshwari – Research Analyst
+91-22 3926 8023
ruchita.maheshwari@nirmalbang.com
Year
Net Sales
(Rs. in cr) Growth % EBIDTA EBIDTAM (%) APAT PATM (%)
AEPS
(Rs.) P/E (x)
EV/Sales
(x) ROE
FY13 892.9 38.1% 63.9 7.2% 57.1 6.4% 17.8 41.9 2.6 26.7%
FY14 1298.3 45.4% 142.2 11.0% 132.8 10.2% 41.3 18.0 1.8 67.6%
FY15E 1619.8 24.8% 200.4 12.4% 144.7 8.9% 45.0 16.5 1.4 47.4%

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Vaibhav Global Ltd. (VGL)
QQ44FFYY1144RReessuullttUUppddaattee––2233MMaayy22001144
FY16E 1996.5 23.3% 255.0 12.8% 186.6 9.3% 58.0 12.8 1.1 39.6%
Other Financial Highlights:
 TV sales volume for Q4FY14 was 16.44 lakh against 13.21 lakh for Q4FY13 increased by 24.5% whereas, average sales
realization in TV sales was down from $25 in Q4FY13 to $23 in Q4FY14.
 Web sales volume increased by 71.3% YoY to 8.91 lakh in Q4FY14 as against 5.2 lakh in Q4FY13 whereas, average sales
realization was up from $11 in Q4FY13 to $12 in Q4FY14.
Q4FY14 Consolidated Result Analysis
Rs. in crore
Particulars Q4FY14 Q4FY13 YoY% Q3FY14 QoQ%
Net Sales 359.6 227.2 58.3% 370.4 -2.9%
Other Operating Income 4.2 4.1 3.4% 4.5 -5.8%
Total Income 363.9 231.3 57.3% 374.9 -2.9%
Increase / Decrease in Stock 28.0 19.1 15.2
Consumption of raw material 56.9 43.5 30.7% 56.0 1.5%
Purchase of traded goods 48.7 24.3 100.7% 47.4 2.8%
Total Raw-material Cost 133.5 86.9 53.6% 118.6 12.6%
Gross Profit 226.1 140.3 61.2% 251.9 -10.2%
Employees Cost 59.5 40.9 45.5% 55.3 7.6%
Other Expenditure 137.0 98.9 38.5% 152.9 -10.4%
Total Expenditure 330.0 226.7 45.6% 326.7 1.0%
EBITDA 33.9 4.6 640.9% 48.2 -29.8%
Interest 3.0 3.3 -8.9% 4.1 -26.4%
Other Income 0.0 0.0 0.0
EBDT 30.8 1.2 2398.9% 44.1 -30.1%
Depreciation 2.5 0.6 293.0% 1.8 35.8%
Exchange Gain/Loss 1.5 19.2 -3.6
Exceptional Items 0.0 163.7 0.0
PBT 29.8 -144.0 -120.7% 38.6 -22.7%
Tax -6.9 -4.6 6.8
Reported PAT 36.8 -139.3 -126.4% 31.8 15.7%
EPS (Unit Curr.) 11.4 -43.5 9.9
Equity 32.2 32.1 32.1
Face Value 10 10 10
BPS BPS
Gross Margin (%) 62.9% 61.7% 120 68.0% -510
EBITDA (%) 9.4% 2.0% 740 13.0% -360
EBDT (%) 8.6% 0.5% 810 11.9% -330
PAT (%) 10.2% -61.3% 7150 8.6% 160
Source: Company & Nirmal Bang Research

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Vaibhav Global Ltd. (VGL)
QQ44FFYY1144RReessuullttUUppddaattee––2233MMaayy22001144
Annexure:
Source: Company & Nirmal Bang Research Source: Company & Nirmal Bang Research
Source: Company & Nirmal Bang Research Source: Company & Nirmal Bang Research

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Vaibhav Global Ltd. (VGL)
QQ44FFYY1144RReessuullttUUppddaattee––2233MMaayy22001144
Consolidated Financials

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Vaibhav Global Ltd. (VGL)
QQ44FFYY1144RReessuullttUUppddaattee––2233MMaayy22001144
Profitability (Rs. In Cr) FY13 FY14E FY15E FY16E Balance Sheet (Rs. In Cr) FY13 FY14E FY15E FY16E
Revenues - Net 892.9 1298.3 1619.8 1996.5 Issued Share Capital 32.1 32.2 32.2 32.2
% change 38.1% 45.4% 24.8% 23.3% Redeemable Pref Share 44.0 0.0 0.0 0.0
EBITDA 63.9 142.2 200.4 255.0 Total Shares 76.1 32.2 32.2 32.2
% change -13.6% 122.6% 40.9% 27.2% Reserves & Surplus 83.1 200.8 345.4 532.1
Interest 14.5 14.5 11.9 9.5 Net Worth 159.1 232.9 377.6 564.3
Other Income 16.6 15.3 14.5 14.5 Total Loans 160.9 114.1 84.1 74.1
EBDT 66.1 143.0 203.0 260.0 Minority Interest 0.0 0.0 0.0 0.0
Depreciation 7.3 7.5 10.1 11.1 Net Deferred Tax Assets -0.2 0.0 0.0 0.0
Exceptional (Gain)/ Loss 163.7 0.0 0.0 0.0 Total Liabilities 319.9 347.1 461.7 638.4
Fores Gain / (Loss) 21.0 19.8 0.0 0.0 Net Fixed Assets 29.0 37.4 32.3 26.2
PBT -83.9 155.3 192.9 248.9 CWIP 0.0 0.0 0.0 0.0
Tax 1.7 2.8 48.2 62.2 Goodwill on consolidation 28.7 28.7 28.7 28.7
PAT -85.6 152.5 144.7 186.6 Investments 0.1 3.0 3.0 3.0
Adj PAT 57.1 132.8 144.7 186.6 Inventories 209.1 196.2 248.9 323.5
Preference Dividend @1% 0.4 0.2 0.0 0.0 Sundry Debtors 35.6 54.3 94.5 116.5
PAT after Preference Div 56.7 132.5 144.7 186.6 Cash & Bank 45.9 72.1 118.9 220.0
Shares o/s ( No. in Cr.)* 3.2 3.2 3.2 3.2 Loans & Advances 52.5 74.8 93.3 115.0
EPS -26.7 47.3 45.0 58.0 C A L&A 343.1 397.2 555.5 774.9
Adj EPS* 17.8 41.3 45.0 58.0 CL & P 80.9 119.2 157.8 194.4
Cash EPS -24.4 49.7 48.1 61.5 Working Capital 262.2 278.0 397.8 580.5
DPS (Rs.) 0.0 0.0 0.0 0.0 Total Assets 319.9 347.1 461.7 638.4
Quarterly (Rs. In Cr) June.13 Sep.13 Dec.13 Mar.14 Cash Flow (Rs. In Cr) FY13 FY14E FY15E FY16E
Revenue including OI 253.1 321.6 374.9 363.9 Operating
EBITDA 34.9 40.5 48.2 33.9 Profit Before Tax -83.9 155.3 192.9 248.9
Interest 3.5 3.9 4.1 3.0 Direct Taxes paid -1.6 -2.8 -48.2 -62.2
EBDT 31.4 36.7 44.1 30.8 Depreciation 7.3 7.5 10.1 11.1
Dep 1.4 1.7 1.8 2.5 Change in WC -19.5 -4.5 -72.9 -81.6
Other Inc. 0.0 0.0 0.0 0.0 Interest Expenses 12.4 14.5 11.9 9.5
Forex Gain/Loss 10.8 11.1 -3.6 1.5 Other Operating Activities / Non-cash items 162.3 0.0 0.0 0.0
Exceptional 0.0 0.0 0.0 0.0 CF from Operation 77.0 170.1 93.7 125.6
PBT 40.8 46.1 38.6 29.8 Investment
Tax 0.7 2.1 6.8 -6.9 Capex -13.5 -16.0 -5.0 -5.0
PAT 40.0 44.0 31.8 36.8 Other Investment 13.8 -2.9 0.0 0.0
Adjusted EPS (Rs.) 12.5 13.7 9.9 11.4 Total Investment 0.3 -18.8 -5.0 -5.0
Operational Ratio FY13 FY14E FY15E FY16E Free Cash Flow 77.3 151.2 88.7 120.6
EBITDA margin (%) 7.2% 11.0% 12.4% 12.8% Financing
Adj.PAT margin (%) 6.4% 10.2% 8.9% 9.3% Equity raised/(repaid) 0.0 0.0 0.0 0.0
Adj.PAT Growth (%) -8.3% 132.5% 9.0% 29.0% Proceeds from issuance of shares 1.0 0.0 0.0 0.0
Price Earnings (x) 41.9 18.0 16.5 12.8 Repayment of Redemable Preference share 0.0 -44.0 0.0 0.0
Book Value (Rs.) 35.9 72.4 117.4 175.4 Debt raised/(repaid) -16.7 -46.8 -30.0 -10.0
ROCE (%) 19.2% 45.0% 50.6% 47.0% Dividend (incl. tax) paid 0.0 0.0 0.0 0.0
RONW (%) 26.7% 67.6% 47.4% 39.6% Interest Expenses -12.4 -14.5 -11.9 -9.5
Debt Equity Ratio 1.0 0.5 0.2 0.1 Deposits 0.0 0.0 0.0 0.0
Price / Book Value (x) 20.6 10.2 6.3 4.2 Foreign Currency Translation -21.9 -19.8 0.0 0.0
EV / Sales 2.6 1.8 1.4 1.1 Cash Flow from Financing Activities -50.1 -125.1 -41.9 -19.5
EV / EBIDTA 36.4 16.2 11.3 8.5 Net Cash Flow 27.2 26.2 46.8 101.1
Beginning Cash Flow 18.7 45.9 72.1 118.9
Cash as reported in Balance Sheet 45.9 72.1 118.9 220.0
Source: Company & Nirmal Bang Research

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Vaibhav Global Ltd. (VGL)
QQ44FFYY1144RReessuullttUUppddaattee––2233MMaayy22001144
Disclaimer:
This Document has been prepared by Nirmal Bang Research (A Division of Nirmal Bang Securities PVT LTD). The information, analysis and
estimates contained herein are based on Nirmal Bang Research assessment and have been obtained from sources believed to be reliable. This
document is meant for the use of the intended recipient only. This document, at best, represents Nirmal Bang Research opinion and is meant for
general information only. Nirmal Bang Research, its directors, officers or employees shall not in anyway be responsible for the contents stated
herein. Nirmal Bang Research expressly disclaims any and all liabilities that may arise from information, errors or omissions in this connection. This
document is not to be considered as an offer to sell or a solicitation to buy any securities. Nirmal Bang Research, its affiliates and their employees
may from time to time hold positions in securities referred to herein. Nirmal Bang Research or its affiliates may from time to time solicit from or
perform investment banking or other services for any company mentioned in this document.
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Opp. Peninsula Corporate Park
Off. Ganpatrao Kadam Marg
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