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Entry Price

409.00

Target

540.00

Recommend Date

08-02-2021

Return

32.03 %
BUY

Date : 08-02-2021

Driven by festive season demand, TCNS Clothing reported strong QoQ growth with revenue recovery rate reaching 72% in Q3FY21 vs. 45% in Q2FY21. The recovery rate is broadly in line with industry revenue recovery rate (fashion retailers). Revenue for Q3FY21 fell 28% YoY to | 237.9 crore (up 65% QoQ). Non-metro cities continue to recover at a swift pace with Tier I cities reaching 70% and Tier II, III cites recovering at ~80% of pre-Covid levels. Stores in metro cites are lagging behind with 55% recovery rate. Gross margins continued to stay under pressure (down 670 bps YoY to 61%) mainly due to change in channel mix (higher online sales) and provision towards inventory dormancy (~400 bps). Sharp rationalisation of operating overheads, recovery in sales led TCNS to report EBITDA of | 38.5 crore (down 43% YoY) vs. EBITDA loss of | 16.3 crore in Q2FY21. PAT for Q3 was at | 12.7 crore (down 77% YoY) vs. net loss of | 27.6 crore in Q2FY21.