Sector 1: Manufacturing Company 1: Vaibhav Global Ltd

General Overview
Vaibhav Global Limited (VGL) is a multi-national electronic retailer, wholesaler, and fashion jewelry
manufacturer and lifestyle accessories headquartered in Jaipur, India. VGL was ranked 234th in Fortune
India's Next 500 list of India's largest mid-sized companies by revenue in 2013-14. It also ranked 3rd
amongst India's top 50 wealth creators list by Fortune India magazine. The company had Good quarterly
growth in the recent results. The company has low debt with Increasing Revenue every quarter for the
past 2 quarters. It has strong cash-generating ability from core business - Improving Cash Flow from
operation for last two years. The company has consistent financial performance, quality management, and
strong technical momentum indicating good investor enthusiasm.

Shareholding pattern of the company

Source: Annual Report Vaibhav Global

Source: Money Control

Source: Annual Report Vaibhav Global

Source: Money Control
• Promoter holding has remained constant over the years at around ~ 58%.
• FII/FPI have increased holdings from 10.55% to 11.18% in Dec 2020 qtr.
• Mutual Funds have decreased holdings from 9.55% to 8.93% in Dec 2020 qtr.
• A minor 10% stake is available with the public and others.
• The majority of promoter holding is with Brett Enterprises private limited (around 56%).
• Brett Enterprises holding is majorly with Ghan Shyam Agarwal, Sheela Agarwal, Deepti
Agrawal, the father, mother, and wife of Sunil Agarwal, managing director.

Management of the company

• Mr. Sunil Agrawal, Managing Director, established Vaibhav Enterprises in 1980 to
professionalize the Gems and Jewelry Trade. The company has grown over the years under him.
• Mr. Harsh Bahadur, Non-Executive Chairman: He has 33 years of rich experience in the Retail,
Branded FMCG, Music, Sportswear, Business services, and Jewelry industries. He is currently on
the Board of Indian Terrain Fashions Ltd. as an Independent Director and is also working as a
senior advisor in PricewaterhouseCoopers (PWC). Mr. Bahadur also advises Private Equity Funds
and has evaluated Companies in the automobile servicing, branded food, and e-commerce sectors.
In the past, he has worked with Hindustan Unilever for 11 years and has held the office of CEO
for the RP G Music International – a group Company that owned over 80% of the Indian music
catalog, focusing on marketing Indian music to the diaspora across the world for two years.
• Mr. Nirmal Kumar Bardiya, Director, has over 35 years of experience in colored gemstone
manufacturing. He has been associated with VGL for the last 18 years. He is highly specialized in
high volume gemstones and beads and is one of the leading global players in this segment.
• Mrs. Sheela Agarwal, Director, is the mother of Mr. Sunil Agrawal, Managing Director.
• Mr. Pulak Prasad, Director, is the founder of Nalanda Capital that holds large and long-term
stakes in small to mid-cap listed Companies in India on behalf of the US and European
Institutional Investors (primarily Endowments and Foundations).
SWOT of Company
Strengths
• The company has a high promoter holding of 58.40%.
• Abundant availability of cheap and skilled labor in India.
• Robust product design and development.
• Broad-based manufacturing infrastructure.
• Product range enjoying international acceptability.
• World-class quality standards.
• Global cost competitiveness.
• Availability of a vast and well-accepted product range addressing various retail segments.
• End-to-end vertical integration from mines to retail.
• Long-standing relationships with corporate customers.
• Independent and experienced Board of Directors.
• Steady Highest Return Stocks more than Five Years as per Nifty 500.
• Strong EPS growth QoQ over the years
• Return on capital employed has been improving for the last two years!
• Return on equity (ROE) i.e., company has effectively used shareholders fund since last two year!
• Return on Asset has been efficiently improved since last two year.
• Net Profit growth with increasing Profit Margin (QoQ) and Low Debt
• The company has shown a profitable growth of 78.69% for the past three years.
• The company has a healthy interest coverage ratio of 21.41.
• The company has a healthy liquidity position with a current ratio of 2.66.
• Omni-channel presence catering to the retail industry across the US and UK through the
electronic mediums of TV, web, marketplaces, social and new-age digital platforms.

Weakness
• Dependence on foreign exchange and raw material cost uncertainties
• Lack of cutting-edge technologies when compared with European Countries.
• Companies with growing costs YoY for long term projects
• MFs have not been increasing their share.
• Companies not able to generate net cash.
• The company has shown low revenue growth of -3.67% for the past 3 years.
• The company has a negative cash flow from operations.
• Low productivity compared to labor in China, Thailand, and Sri Lanka. Import of raw material
necessitates a large inventory.
• Heavy dependence on USA and UK.
Opportunities
• Enhance digital marketing efforts to enhance digital customer engagement initiatives.
• Strengthening the low price point ‘discount’ model in both the US and UK markets should serve
as value for the product.
• Potential to duplicate the end-to-end discount electronic retail enterprise model in other
developed and developing nations.
• Worldwide market of US$ 120 bn.
• Increase jewelry production capacity through the addition of manufacturing facilities in
Bangkok, Hong Kong, and China.
• Improve direct sales to end customers through stores or organized channels like departmental
stores and TV channels.
• Highly fragmented industry space offering room for consolidation.

Threat
• China, Sri Lanka, and Thailand's entry into the small diamond segment.
• Infrastructure bottlenecks, absence of latest technology. Volatility in the price of gold.
• Competition from Indian as well as international companies.
• India's reputation as a sub-quality supplier.
• Probable loss of goodwill and dependability in the event of under-performance.
• Variations in customer requirements in terms of quality.
• Lower than expected offtake from the company's retail outlets.
• Unforeseen general macro-economic factors and political turmoil.

Competitive Analysis
Company Name Price MCap P/E P/B ROE Net Net Debt to
Profit Sales Equity
Vaibhav Global 2623.4 8528.73 37.29 11.35 25.32 190 1,986 0.09
Titan Company 1500.0 133167.9 188.92 19.95 22.51 1,496 21,051 0.35
Rajesh Exports 477.70 14104.57 15.44 1.34 11.44 1,205 195,600 0.12
Asian Star 652.95 1045.16 26.38 0.90 5.45 63 3,052 0.57
PC Jeweler 25.30 999.54 - 0.25 2.07 83 5,206 0.57
Vaibhav is a healthy company with fair P/E and P/B ratio, while its competitor Titan is highly overvalued.
The company has effectively used shareholders' fund and capital to generate above-average industry
returns. The company is low on debt, allowing raising funds for long-term projects at low cost of capital.

Conclusion and way forward for the company

By mapping customer feedback with business results, the company has shifted the product mix to cater
to customers' emerging requirements. The company has started offering convenience features in terms of
Budget Pay, Easy Returns and Last Mile Delivery that has strengthened its core business in COVID-19
times.
With cutting-edge ERP platform that enhances informed decision-making, strengthened controls, and
provided a scalable, cost-efficient technology foundation for future business.
The company’s business has seen a shift from TV to web and influencer-based marketing. The company
has started working on these lines to reap the benefits of the changing times.

References
Money Control
Vaibhav Global Annual Report