Gitanjali's 4Q Sales +47%, Profit +8% to $19M

Gitanjali Gems Ltd. reported that group net sales rose 47 percent year on year to $642.5 million (INR 35.32 billion) during its fourth fiscal-quarter that ended on March 31, 2012, Rapaport reports. Growth was driven by strong performances at its jewelry and diamond businesses.  Net profit increased 8 percent during the quarter to $18.7 million (INR 1.03 billion) for Gitanjali, whose diamond jewelry brands include Gili, Nakshatra, Asmi and D'Damas.
Sales at the company’s diamond business grew 34 percent year on year to $284.2 million (INR 15.62 billion), while jewelry segment sales increased 58 percent to $384.3 million (INR 21.1 billion). Inter-segment sales rose 61 percent to $27.8 million, while sales at its other segments increased to $1.8 million (INR 97.2 million) from $393,069 (INR 21.6 million) a year earlier.
Group expenditures rose 44 percent to $606.9 million (INR 33.36 billion) during the quarter.
For the fiscal year, the company’s net profit rose 37 percent year on year to $88.6 million (INR 4.87 billion), while net sales increased 33 percent to $2.27 billion (INR 124.98 billion). Gitanjali ended the year with more than 4,000 points of sale.
“With a balanced portfolio between India and overseas as well as between diamond jewelry and gold jewelry the annual performance has accelerated," said Mehul Choksi, the chairman of Gitanjali Gems. "Re-alignment of the group’s business into verticals focusing on the Indian business and the international business will unlock huge value for its stakeholders.”
The company said that in fiscal 2012 growth primarily came from the expansion drive that included opening new stores via franchise, own store and the shop-in-shop routes. Gitanjali added 404 additional points of sale during the year, increasing its retail footprint from 1.3 million square feet to 1.7 million square feet.
Gitanjali said that its U.S. business, comprising of the Samuels retail chain, witnessed robust growth during the recent Christmas and Valentine’s Day seasons.
The company stated that retailing in India has undergone a transformation given the change in consumer preferences and lifestyles and this has filtered through to the jewelry business creating opportunities for modern retail formats and chains. To take advantage of these opportunities, the company has focused strategically on expanding through the franchisee channel to access markets in smaller Indian towns and cities rapidly.
Gitanjali noted that branded jewelry market continues to gain ground in India and the company has extended its offerings to include gold collections to further capitalize on opportunities in South India.
The company reported that its board re-appointed Choksi as managing director for another five years beginning August 1, 2012. The board also recommended a dividend of INR 3 per equity share for the fiscal year.