Conference Call      
          Gitanjali Gems
    Increased retail footprint to 1.7 million sq ft


Gitanjali Gems came out with financial results for the quarter ended September 11 and conducted concall to discuss financial performance and prospects of the company. Mehul Choksi – CMD, Sunil Verma – CFO, V L Ganesh – President Finance and Abhishek Gupta addressed the call

Highlights of the call are:

Gitanjali Gems has reported healthy financial performance for the quarter ended December 11 with 28% increase in the Net Profit at Rs 128.86 crore over 33% increase in the Net sales at Rs 3526.28 crore. Due to higher gold prices the company has witnessed some subdued demand in the quarter under review.

Revenues from Jewellery segment improved 35% to Rs 2029.41 crore. The company is slowly increasing its focus on jewellery segment while retaining the leadership in the diamond business. Nearly 50% of the Jewellery revenues are from overseas operations.

During the nine month period ending December 31, 2011, Gitanjali opened 42 franchised stores, 24 own retail stores, 150 shop-in-shops through departmental stores and other retailers. These additional 200 points of sale contributed to increasing the retail footprint from 1.3 mn sq. ft to 1.7 mn sq. ft. Same stores volume grew 11%.

The US business of the group comprising of 111 stores, has turned around. November and December being the peak season in United States, the US business observed a growth of 8% in the top line and 14-15% in the bottom line. While the volumes remained flat particularly in US operations, but has witnessed 10-11% increase in the value terms. Samuels's retail store reported Rs 6 crore of EBITDA in quarter under review.

Gitanjali opened its first flagship store - Stefan Hafner in China. The bouquet of Italian brands is now available in other emerging markets like Russia, Saudi Arabia, the Far East and India.

In December 2011, the group acquired "Crown Aim", a Chinese company engaged in jewellery manufacturing and distribution. Crown Aim also has a subsidiary in the UK - "Alfred Terry", which distributes jewellery across 2,000 points in the UK and in the rest of Europe.

Gitanjali completed its business restructuring with the objective of having three focused verticals. Its Indian vertical under the operating cum holding company Gitanjali Brands Limited (GBL) on a consolidated basis, holds all the top Indian brands for distribution and retailing of jewellery in India.

The group is also in the process of consolidating all its international operations under the holding company "Aston Luxury" in Hong Kong.

The company had issued 1% Foreign Currency Convertible Bonds (FCCB) worth USD 110 million, which matured on 25th November, 2011. These were successfully converted and redeemed. 63% of the total issue being converted into equity shares & the balance 37% bonds being redeemed at a premium.

Net Debt stood at Rs 2900 crore at end of December 11.

Edited by shontou - 17/Feb/2012 at 12:06pm

Originally posted by rohit1889 Whats wrong with this company? All hell seems to be breaking loose. Was the stock rise all operator driven ??

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I think the pledging by promoters is something which needs to be looked at. Basically significant  promoter holding being pledged  means the business does not generate reasonable amount of cash or the promoters are abandoning the ship.

Other interesting thing is that, when the RBI gold lease policy came out, this stock didn't fall at all. Even when titan fell hard for 2 days.