Gitanjali Q1 jumps 58% on firm jewellery demand

Gitanjali Q1 jumps 58% on firm jewellery demand

Mumbai: India’s largest jewellery retailer Gitanjali Gems saw quarterly net profit jump 58%, sending it shares up as much as 4% on robust demand for gold and diamond jewellery despite rising prices.

The company’s June quarter net profit jumped to Rs123 crore from Rs78 crore in the same period a year ago. Net sales grew 40% to Rs2,595 crore.

“The jewellery category is doing extremely well and has proven to be an investment class in the times of uncertainty. Also, our continued focus on retail expansion has also been helping our earnings," Mehul Choksi, managing director, said.

The company plans to clock in a profit growth of 50% this fiscal year on a sales growth of 35%.

In India, the company plans to invest Rs200 crore to add 350-400 stores across various retail formats in the current fiscal year. It opened 300 stores in the country in FY11.

Gitanjali, which retails diamond jewellery under the brands Gili, Nakshatra, Asmi and D’Damas in India, recently acquired four Italian jewellery brands from a unit of Dubai’s debt-laden jewellery group Damas International.

Last week, the company said it plans to acquire a Chinese manufacturing unit and jewellery retail firm by the end of 2011 as it looks to expand its global footprint.

Gitanjali, which the market values at $596.8 million, has a presence in the Middle East and the United States.

The firm, which is undergoing a business restructuring, plans to finish the process in the next 2 months, after which it hopes to make an announcement about roping in a private equity partner.

Shares of the firm ended 3.18% up at Rs311.1 in a weak Mumbai market.