In This Article:
Release Date: February 17, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Renaissance Global Ltd (BOM:532923) reported an 18% year-over-year increase in total income from continuing operations, reaching 710 crore.
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The customer brand segment saw a significant 34.2% year-over-year growth.
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Adjusted EBITA grew by 32.8% year-over-year, driven by robust cost management and an optimized product mix.
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The company initiated a cost optimization program expected to deliver annual savings of 40 to 50 crores.
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Net debt to equity improved significantly to 0.14% as of December 30, 2024, from 0.27% in September 2024.
Negative Points
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The company incurred a one-time restructuring expense of 15 crores in the quarter.
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Despite improvements, the India retail business is still losing a significant amount of money.
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Gross debt remains high at around 500 crores, with interest payments at approximately 8.5%.
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The lab-grown diamond business, while growing, faces competition from natural diamonds.
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The company's own D2C segment has shown slower growth compared to customer brands.
Q & A Highlights
Q: What is driving the robust growth in the customer brand segment, and why is the D2C business growing slower? A: The customer brand segment is experiencing a resurgence after transitioning to lab-grown products, showing a 34% growth after two years of decline. The focus for the D2C business has been on improving profitability and controlling marketing expenses. The company expects to accelerate growth in the customer brand segment next year, especially with recent strategic acquisitions. (Respondent: Unidentified_2)
Q: Can you provide details on the expected growth for your own brands next year? A: The company anticipates more than 300 crores in revenue for its own brands next year, with a 50% growth expectation. This includes both organic growth of 15-20% and contributions from strategic acquisitions. (Respondent: Unidentified_2)
Q: Why does the company have significant cash and cash equivalents, and how will it be utilized? A: The cash from the preferential allotment came in late December, and the plan is to use it to pay down gross debt, which will be reflected in the current quarter. The investments have remained steady, and the focus is on reducing debt. (Respondent: Unidentified_2)
Q: What are the expected cost savings from the restructuring, and when will they be realized? A: The restructuring is expected to deliver annual cost savings of 40 to 50 crores, which will start reflecting in the financials from Q4 onwards. (Respondent: Unidentified_2)