|
Monte Carlo Fashions held its conference call on 18 February 2019 to discuss its results and future.
Dinesh Gogna – Director and Sandeep Jain – Executive Director addressed the call:
Highlights of the call:
The company has changed the policy of manufactured finished goods valuation from retail method to actual cost method. The company has applied the change in accounting policy retrospectively by adjusting the opening balance of equity for the earliest prior period presented and the other comparative amounts disclosed in unaudited financial results for each prior period presented to the extent possible.
December 2018 quarter sales grew 16% to Rs 375.56 crore.
PAT grew 21% to Rs 75.46 crore.
Nine months sales grew 13% to Rs 560.60 crore.
PAT grew 7% to Rs 88.54 crore.
Q3 generates highest quarterly revenues in any fiscal year.
Q3 typically involves sale of winter products.
This was the highest third quarter revenues till date.
Good performance is likely to continue in 4th quarter.
The company faces no inventory risks due to its strategic planning. Inventory will be less than last year's level by March end due to extended winter.
Robust distribution model assures minimal inventory risks.
Till date there has been no bad debt or receivables write off for the company.
The company has same policy of selling at same price across channels. Inventory risks/ online sales account for 4% of sales.
Sweater sales were 1260000 for the nine months against 1031000.
The company has grown at a CAGR of 17% in last 10 years and has missed the guidance only once in last 10 years.
This year margins will be maintained or will even be slightly better.
The company is not just going for sales on low margins.
The company does not envisage any major capex for the next 2 years and growth will come from higher capacity utilization. Capex will just be Rs 10-15 crore in each of the next 2 years.
The company is hopeful of better q4 than last year due to extended winder.
The company approved the final Buy-Back Price as Rs 550 per Equity Share of Rs 10 each and the final Buyback consideration to be Rs 55.00 crores excluding the expenses incurred or to be incurred for the Buyback.
The promoters won't participate in the buy back.
The dividend policy will be decided later.
Summer order book is better compared to last year. This summer it should easily grow in double digits compared to last year.
Textile and Kids segment delivered strong growth, contributing higher revenue for the overall business.
Its focus is on new markets and new product offerings.
The company has gained strong traction in making further inroads in western and southern markets in India.
The company does not require much capex for the next 2 years. During the 2 years growth will be achieved from higher capacity utilization.
Focus is on cotton products. Contribution of cotton in 9M FY19 remained stable at 57%.
The company is positioning as all fashion brand to reduce seasonality impact.
Woollen segment contribution has moved marginally lower in 9M FY19.
It is improving diversification across various channels of sale.
It is also improving regional diversification.
For the nine months, East accounted for 24% of sales and North India accounted for 53%. 14% came from Central India, 6% from West India and 3% from South India.
In addition to 253 EBO's, company has 2 Overseas EBOs in Nepal.
Focus on branding and promotion will further increase visibility and market share across India.
Focus on a comprehensive range of cotton and cotton-blended products which cater to all
Season will expand its all-season product range and strengthen pan-India operations.
It has started sale through Shop in Shop (SIS) Model.
It will also focus on online sales through own portal as well as Tie-ups with e-commerce portals such as Flipkart, Jabong, Myntra, Amazon and Kapsons.
The management is confident of its ability to sustain robust growth without any major capex. Therefore it feels that the return ratios set to improve going forward.
As on December 2018, the company had 253 EBOs (27 EBO-COCO, 226 EBO-FOFO), 2,500+ MBO and distributors and 321 NCS.
The company has entered into distribution agreements with some of the leading Indian digital commerce platforms for online sale of products.
|