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Gitanjali's 1Q Sales +31%, Profit +21% to $27M

Jewelry, diamond sales drive growth.
Aug 13, 2012 1:18 AM   By Dilipp S Nag
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RAPAPORT... Gitanjali Gems Ltd. reported that sales rose 31 percent year on year to $612.1 million (INR 33.85 billion) during its first fiscal quarter that ended on June 30, 2012. Growth was driven by the strong performance from its jewelry and diamond businesses.

Profit increased 21 percent to $26.9 million (INR 1.49 billion), boosted by an increase from ''other'' income generated for the group, whose diamond jewelry brands include Gili, Nakshatra, Asmi and D'Damas. Other income rose to $24.5 million (INR 1.36 billion) from $4.21 million (INR 232.8 million) a year earlier.

Sales at the company’s diamond business grew 29 percent year on year to $301.6 million (INR 16.68 billion), while jewelry segment sales increased 36 percent to $330.2 million (INR 18.26 billion). Sales at its other segments increased to $2 million (INR 113.3 million) from $873,725 (INR 48.3 million), while inter-segment sales nearly doubled to around $22 million (INR 1.21 billion).

Group expenditures rose 33 percent year on year to $573.6 million (INR 31.72 billion) during the quarter.

Gitanjali stated that the quarter was significant for the group in terms of product and design innovations, channel marketing and retail expansion, which together contributed to overall growth. The company introduced additional categories of gold jewelry, kundan, jadau, polki and colored stones in India, while it created international jewelry hubs and distribution centers in the Middle East and Hong Kong.

Gitanjali’s sales in India almost doubled to $321.1 million (INR 17.76 billion), while sales from the rest of the world declined 4 percent year on year to $290.9 million (INR 16.09 billion) during the quarter.

“We are an integrated, dominant global jewelry player with a powerful and diverse product and brand portfolio. We are therefore well poised to capture opportunities stemming from the increasing appetite for branded jewelry in India. Our penetration into smaller towns and cities of India is in step with our strategic focus,” said Mehul Choksi, the chairman of Gitanjali Gems. “We will also continue to offer a judicious mix of diamond and gold jewelry and a supreme retail experience in the world’s leading jewelry markets.”

He added that the company will capitalize on opportunities in other markets that have been exhibiting a growing preference for branded jewelry.

Gitanjali stated that the group has completed the realignment of its Indian business structure by transferring all the Indian jewelry businesses to Gitanjali Brands Ltd. to unlock value for stakeholders. A similar exercise is underway to consolidate the group’s international jewelry division under its Hong Kong subsidiary Aston Luxury Group, it said.

*Note: All data was published in rupee. Any references to U.S. dollar amounts were made according to exchange-rate conversions by Rapaport News.
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Tags: diamond, Dilipp S Nag, Gitanjali, Gitanjali Gems, gold, India, Jewelry, Mehul Choksi, Rapaport
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