Listed Indian Jewelry Companies Report Shining Results

Gem and jewelry companies listed on the Indian stock exchanges, especially those with a significant retail presence in the booming domestic market, have reported strong growth during the third quarter of the Indian fiscal 2006-2007 ended December 31, 2006.

Among the star performers was Titan Industries, whose brand, Tanishq, is one of the most well known names in the Indian jewelry market. Titan, whose core business was watches before it launched Tanishq about a decade ago, reported a 155 percent increase in net profit to Rs 275 million ($6.23 million) from Rs 108 million ($2.45 million), and a 42.1 percent rise year-on-year in net sales to Rs 5,420 million ($122.84  million) from Rs 3,810 million ($86.35  million).

Significantly, the income from the jewelry division, which has one of the largest network of stores across the country, was up 63.6 percent at Rs 3,665 million ($83.06 million) from Rs 2,240 million ($50.76 million), and its pre-tax profits rose to 11 percent from 4 percent. The share of jewelry in net sales also rose to 67.5 percent from 58.7 percent.

Two other companies with large countrywide networks, Gitanjali and Rajesh Exports, also reported strong performances.

Gitanjali, which now retails more than 30 brands in the Indian market, and which recently acquired U.S. jeweler Samuels, virtually doubled its net profit to Rs 314 million ($7.1 million) from Rs 156 million ($3.5 million) last year. Sales increased 52 percent to Rs 7,980 million ($180.85 million) from Rs 5,240 million ($118.75 million) during the same period. The company reported that its jewelry sales had risen by 175 percent and now contributed 31 percent to revenue as against 17 percent last year with the contribution to profit before tax increasing from 39 percent to 57 percent.

Rajesh Exports' foray into the retail sector, under the banner of Laabh Jewellers, boosted the company's bottom line. Rajesh Exports reported an increase of nearly 45 percent in revenues to Rs. 18,731.6 million ($424.52 million) against Rs 12,948.5 million ($293.457 million), and an increase in operating profits of more that 50 percent to Rs 404.8 million ($9.17 million) against Rs 268.9 million ($6 million) for the corresponding period last year. The company has also entered into a 50:50 joint venture with NASDAQ listed Fossil Inc, to establish a retail watch and jewelry chain in India under the brand Fossil India.

One of the first listed companies in the sectors, Su-Raj Diamonds and Jewellery, reported a 62 percent rise in sales and a 33 percent rise in net profit in the quarter. On a turnover of Rs 4,600 million ($104.25 million), up from Rs 2,840 million or $64.36 million, the net profit was Rs 134.4 million ($3 million).

Su-Raj, a major exporter, has also expanded its presence in the Indian market through its stake in Forever Precious. Although the focus of the company has largely been B2B, it recently launched an exclusive factory outlet at its plant in Bangalore, and plans to set up another one in Goa. It has also launched a special product development centre in Bangalore.

Diamond jewelry exporter Goldiam International, which entered the domestic market with its brand Ola in mid-2006, reported an increase in sales to Rs 545 million ($12.35 million) from Rs 500 million ($11.33 million) last year, though profits dipped from Rs 104 million ($2.37 million) to Rs 71.3 million ($1.6 million). However, the company said that in the next fiscal it expects growth in revenue from retail to greatly exceed the 25 percent growth it envisaged in the export business.