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Gitanjali's 3Q Sales +27%, Profit +34%

Jewelry, diamond sales drive growth.
Feb 14, 2013 1:43 AM   By Dilipp S Nag
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RAPAPORT... Gitanjali Gems Ltd. reported that group sales rose 27 percent year on year to $809.5 million (INR 43.55 billion) during its third fiscal quarter that ended on December 31, 2012. Strong performances at its jewelry and diamond businesses boosted overall sales. Profit increased 34 percent to $32 million (INR 1.72 billion).

“Indian retail sales picked up significantly in the third quarter with improved (consumer) sentiment, a good Diwali and a prolonged marriage season driving growth," said Mehul Choksi, the chairman and managing director of Gitanjali Gems. "Our investment in franchisee-led growth over the past two years is now delivering strongly.”

Sales at the company’s diamond business grew 26 percent year on year to $347.5 million (INR 18.70 billion), while jewelry segment sales increased 28 percent to $479 million (INR 25.77 billion). Sales at its other segments increased 75 percent to $3.8 million (INR 205 million).

Gitanjali noted that its initiative to offer new designs by conducting jewelry exhibitions and shows in metro areas and  smaller towns helped increase  footfall and boost sales. The company’s ecommerce platform attracted a substantial number of online jewelry shoppers, it said, but didn’t provide a break out of online sales.

The fiscal third quarter in India typically reflects an increased level of activity in jewelry retailing due to the festive and wedding seasons, while Christmas and the New Year were prime drivers in the overseas market.

Gitanjali, whose diamond jewelry brands include Gili, Nakshatra, Asmi and D'Damas, stated that its strong brand portfolio was further boosted by the organic and inorganic expansions. The company acquired the Nirvana and Viola Indian jewelry brands during the quarter and added 166 points of sale in the shop-in-shops format to its retail footprint. Its network of own stores, shop-in-shops and franchise outlets span  300 cities and 4,000 points of sale.

Choksi stated that its transformation from product brands to retail brands continued and geographic reach to tier 2 and tier 3 towns would further enhance the company's profitability with lower capital employed.

The company said that it recently opened a factory in Jaipur to manufacture jadau, kundan and polki jewelry. The factory has a monthly production capacity of 15,000 pieces. Gitanjali stated that it was emphasizing craftsmanship to manufacture light-weight exclusive diamond jewelry to compensate for high gold prices.

Gitanjali’s sales in India rose 46 percent to $453.7 million (INR 24.41 billion), while international sales increased 10 percent year on year to $355.8 million (INR 19.14 billion) during the quarter. The company plans to further foray into emerging markets like the Asian sub-continent, the Far East and the Middle East. It also aims to acquire market share in mature and high-margin markets such as Japan and the U.S.

*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, retail
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