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Vaibhav Global Limited - Concall important points - Q2 FY22 November 2021

Vaibhav Global Limited is a Global E-tailer of Fashion Jewellery, Apparels, Lifestyle Products and Accessories onTV and Digital Platforms.

So, we were analysing the business Vaibhav Global Limited and also analyzed the quarter result of Vaibhav Global limited for Q2 FY22 in our previous post, it's time to go ahead with the concall analysis of Vaibhav Global Limited. 

What will we look at here ? 

A brief introduction to Q2 FY22 performance 

Important points noted and analyzed from concall Q2. 

Vaibhav Global Limited established in 1980, Vaibhav Global Limited (VGL) is a vertically integrated electronic retailer of fashion jewellery, home, beauty, lifestyle, and essential products, offering a deep-discount proposition to customers in the US and the UK, and with prudent plans to expand to other geographies.

Vaibhav Global Limited sales or total revenue for Q2 FY22 is down by 6.96% as compared with previous quarter i.e. Q1 FY22. But if we see year on year, total revenue for Q2 FY22 is up by 6.46% and a 30.9% increase over Q2 FY20. 

Retail revenue for us grew by 3.3% Y-o-Y. Our H1 revenue grew 14.6% over H1-FY21 and 42.3% compared to H1 FY20. 

Management is committed to his original guidance of 16% to 18% constant currency revenue growth for the current financial year. 

In Q2 our gross margins continue to remain healthy at 63.9%, expanding by 100 basis points. EBITDA for the quarter has been at 11.4% compared to 16.5% last year, excluding new venture in Germany, it has been at 13.5%. 

Margins during the quarter were adversely impacted by one off external factors of high shipping expenses linked to globally supply chain issues. 

We continue to gain market share across geographies. Gaining market share will always be a positive point in any business model. It will help the business to be a leader in the industry over the years. 

Management is putting effort to pass on the increased cost to the customers and keep focus on the gross margins. If they can pass on the increased cost to the customers, it will help them to maintain their margin in volatility periods too. I focus on the business which is either increasing or maintaining its operating profit margin. 

Management is continuously mentioning the impact of sea freight costing. We can consider it as one of key variables in the business model of vaibhav global limited. So softening in the sea freight costing will yield an improvement in EBITDA and Operating profit margins. 

Management is guiding their digital revenue growth to 50% increase, which is currently about 35% in the coming three years in respect of the target of TV versus e-com. 

$2 million CAPEX of Germany is also sitting in this H1 number. Another $5.2 million of the warehouse, robotics GEEK+ plus also sitting in this H1 CAPEX. So, both put together about 7.2 million and in that way we front ended it in H1 so that we get the benefit in H2. 

One of the differentiating factors between Vaibhav Global and the rest of its peers is average selling price that Vaibhav has basically like a value for money brand. It could be considered as a positive point when you want to succeed in a competitive environment. 

In the retail side of the business, In this quarter, Vaibhav Global Limited had invested into acquiring an existing building-an existing factory for apparel and they now have approximately 300 people working in that building. 

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