Shree Ganesh Jewellery House Limited (SGJHL) reported that group sales more than doubled to $578 million (INR 28.53 billion) during its fiscal third quarter, from $247.4 million (INR 12.21 billion) a year earlier. Net profits increased 17 percent year on year to $19.3 million (INR 954.1 million) during the period that ended on December 31, 2011.
”The company has delivered enhanced revenues on a year on year basis in the third quarter of fiscal 2012, which is a combined effect of improved volume and higher gold prices,” said Nilesh Parekh, the chairman of SGJHL.
Kolkata-based SGJHL’s exports surged 156 percent to $511 million (INR 25.22 billion), while its domestic sales grew 34 percent to $69 million (INR 3.4 billion). The company makes gold jewelry, diamond jewelry, gemstone-studded jewelry and light-weight Italian jewelry and derives more than 85 percent of its sales from overseas markets. It primarily exports to the United Arab Emirates (UAE,) Singapore and Hong Kong.
The company explained that demand in the Middle East continues and it reported that its manufacturing facility in the UAE has an outstanding order worth $101.3 million (INR 5 billion) as of December 31. It proposed to set up a unit to refine 20 tonnes of gold at the facility, which is expected to commence operations in the first quarter of 2013.
SGJHL also stated that the setting up of manufacturing unit in India in association with Italian company SALP S.P.A., a specialist in machine-made light weight gold jewelry, is on track and will likely commence production in the first quarter of fiscal 2013. The joint venture will operate under the name of OROITALIA Chains Pvt. Ltd.
The company currently has manufacturing units located in Mondalpara, Manikanchan Special Economic Zone (SEZ) in West Bengal and is in the process of setting up a gold refining facility at Domjur in West Bengal. The new facility, which will have an initial capacity to manufacture 10 tonnes of light weight gold jewelry annually, is expected to be operational by the first quarter of fiscal 2013.
SGJHL noted that the strong demand witnessed in the retail space helped spur sales during the quarter. The company opened 18 ‘GAJA’ retail outlets since October 2011 taking the total number of stores to 44 across India. It plans to set up 50 retail stores in fiscal 2012 to capitalize on the growth potential in the branded jewelry space.
The company stated that the consumer response has been encouraging as a high gold price scenario has led to an increased demand for light-weight and low budget jewelry.
Group expenditures rose 140 percent to $555 million (INR 27.39 billion) during the quarter.