Cello World (CELLO) Q1 24/25 earnings summary

Executive summary

• Revenue grew 6.1% year-over-year in Q1 FY25, reaching ₹500.7 Cr, with gross margin expanding to 53.8% from 52.6% in Q1 FY24 despite weak urban demand and election-related headwinds.

• Growth was led by Consumerware and Molded Furniture businesses, each up 6%, while Writing Instruments remained flat due to sluggish demand.

• Increased advertising spend for a back-to-school campaign was a strategic investment in brand building, rising from ₹2.8 Cr in FY24 to ₹7.8 Cr in Q1 FY25.

• Management remains optimistic for FY25, expecting demand to improve and maintaining a 15%-17% annual growth target.

• Board approved unaudited standalone and consolidated financial results for the quarter ended June 30, 2024.

Financial highlights

• Q1 FY25 revenue was ₹500.7 Cr (₹50,065.94 lakhs), EBITDA reached ₹134.9 Cr with a margin of 27%, and PAT stood at ₹83 Cr with a margin of 16.5%.

• Gross profit was ₹269.4 Cr (+8.6% YoY); gross margin increased by 150 bps YoY.

• Basic and diluted EPS for Q1 FY25 were ₹3.89, compared to ₹3.65 in Q1 FY24.

• FY24 revenue was ₹2,000.3 Cr (+11.3% YoY); PAT attributable to owners: ₹331.1 Cr (+24.4% YoY).

• Advertisement expenses rose due to the back-to-school campaign.

Outlook and guidance

• Management expects stronger performance in H2 FY25, driven by improved demand and new product launches.

• Guidance of 15%-17% revenue growth for FY25 is based on organic growth, excluding potential inorganic opportunities.

• The soon-to-be-commissioned glassware plant is expected to add ₹75-80 Cr in revenue for the year.

• Subsequent to the quarter, ₹73,732.08 lakhs was raised via QIP at ₹852 per share, strengthening the balance sheet.