TCNS Clothing - Q1FY21 First Cut - ICICI Securities

(CMP: Rs. 347, MCap: Rs. 2134 crore)

As anticipated Q1FY21 was a washout quarter for TCNS Clothing marred by store closures for a major period during the quarter. The main emphasis in the quarter was sharp rationalization of operating overheads. Around 80% of the EBO's (475 stores) and 77% LFS touch points (1500) are currently operational.

Q1FY21 Earnings Summary

- Revenue for the quarter declined by 88% YoY to Rs. 32.4 crore. For offline sales, normalcy levels reached at 40% of pre-Covid sales with better traction seen in high-street stores. E-commerce channel picked up pace swiftly, with share of online coming in at 57% vs. 11% YoY (overall sales have reached 1.3x of pre-Covid levels)

- In order to minimise cash burns, the company rationalized operating overheads through Rs. reduction in rental expenses by Rs. 19 crore (secured full year savings of ~25% over last year) and employee expenses down 12% YoY to Rs. 33.0 crore. Subsequently, EBITDA losses curtailed to a certain extent to Rs. 43.0 crore. PBT losses stood at 60.4 crore and net loss came in at Rs. 45.3 crore (tax write back: Rs. 15.1 crore)

- Company has healthy cash reserves worth Rs. 125 crore and additional unutilized bank limits as of mid-Aug. Furthermore, it is looking to optimize working capital and freeing up cash through significantly reducing fresh buys and reverting to utilizing full credit periods

We will be coming out with a detailed report.

Shares of TCNS Clothing Co. Ltd was last trading in BSE at Rs.347.25 as compared to the previous close of Rs. 345.15. The total number of shares traded during the day was 832 in over 121 trades.

The stock hit an intraday high of Rs. 355.6 and intraday low of 345. The net turnover during the day was Rs. 291388.

Source : Equity Bulls

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