Overseas Expansion Pushes Gitanjali Q1 Profits Up 21% to $26.74 Million

(IDEX Online News) - DTC Sightholder Gitanjali Gems reported that its net profit was up 21 percent to Rs.1.49 billion ($26.7 million) for the first quarter of fiscal 2012-13 (ending June 30). Sales for the period rose 31 percent to Rs.33.85 billion ($607.5 million).

Earnings before interest and tax (EBIT) were up 61 percent at Rs.3.49 billion ($62.6 million). Jewelry sales grew by 36 percent to Rs.18.26 billion ($327.7 million), while diamond jewelry sales rose 29 percent to Rs 16.68 billion ($299.3 million).

EBIT from the jewelry business was up 44 percent at Rs 21.71 billion ($389.6 million) and diamond jewelry’s contribution to this rose by 71 percent to Rs 1.33 billion ($23.9 million).

Gitanjali Chairman and Managing Director Mehul Choksi said the company’s strategy of concentrating on penetrating smaller towns and cities and focusing on a judicious mix of diamond- and gold jewelry has started yielding the desired results.

“We will simultaneously look to capitalising on opportunities in other markets that have been exhibiting a growing preference for branded jewelry,” he said.

Revenues from stores opened in the last six months also added significantly to the growth. The group’s presence in the international markets such as the U.S. and Japan coupled with a strong dollar also helped achieve the growth during the quarter, the company said.