Rajesh Exports
Plans to increase share of branded jewellery exports to 30% of total revenues by FY14


Rajesh Exports came out with financial performance for the quarter ended September 11 and has conducted concall to discuss financial results and the prospects of the company. Rajesh Mehata – CMD addressed the call

Highlights of the call are:
With Installed capacity of 250 TPA, Rajesh Exports is the world's largest and only integrated gold jewellery company from gold refining to manufacturing jewellery and exports. The company is largest exporter of gold jewellery from India with 40% share in gold jewellery exports.

The company has reported robust 45% jump in the Net Profit at Rs 107.08 crore over 14% increase in the income from operations at Rs 5767.12 crore in the quarter ended September 11. EBITDA margins improved to 2.7% in quarter under review against 2.3% a year ago and 2.9% a quarter ago.

The retail revenues grew by 197% to Rs 3748.5 crore in quarter under review. The company has increased share of retail business to 6.5% of total sales and has also increased share of branded jewellery exports to 7% of total revenues in quarter under review. This has helped to improve the margins.

At EBITA level, margins of Retail business improved to 7.52% against 6.34% a year ago. On the other hand, margins from exports improved to 2.24% from 2.22% a year.

The margins of branded export business would be 10-15% higher than the normal exports. Management plans to increase share of branded jewellery export to 30% of total revenues by FY14.

In the volume terms, the company has refined 8.15 tons of gold in the quarter under review. The export volumes improved 3.4% to 22.85 tonnes and that of manufacturing volumes has increased 6% to 24.52 tonnes in the quarter under review. Average realization per gram of gold in exports improved 12.7% to Rs 2507 while that of retail grew 12.4% to Rs 2645.

The no of stores has increased from 36 at end of September 11 to 48 at end of September 11. Further, the company has added 28 new stores in October and November 11 to take the count to 76 as on 15 November 11. The management expects to increase retail count to 125 in Karnataka by end of FY12.

The company has no long term debt and debt on the books would completely represent working capital requirements only.

The company plans to raise money in ECB's for retail expansion worth Rs 2500 crore in FY14. Free cash at end of September 11 stands at Rs 1100 crore.

The management guided for 14-15% growth in revenues and 40-44% of growth in the bottom line for next 12-14 quarters as the retail expansion is going to shape up well in both revenues and improved margins.