Listed Indian Gem & Jewelry Companies Sparkle

Publicly listed Indian gem and jewelry companies, which announced their results for the first quarter of the Indian financial year 2006-2007, have reported substantial growth in both turnover and profit.

Among the first to release their results was Bangalore based Rajesh Exports (REL), whose revenues for the quarter ended June 30 grew by 28.95 percent on a year on year basis to Rs 15,127.30  million ($325.6 million), compared to Rs 11,731.43 million ($252.5 million) in the same quarter last year. Net profit after tax for the quarter stood at Rs 186.67 million ($4 million) compared to Rs 168.60 million last year, a growth of 10.72 percent. According to a company official, this is the highest profit ever posted by the company for any quarter in the past.

Though REL, as it name suggests, has primarily catered to the overseas markets, the company has undertaken a growth strategy under which retail sales in the domestic market are expected to contribute the major share. As part of this strategy, the company recently acquired Oyzterbay, a diamond jewelry retailer with a presence across India.

In addition, REL plans to acquire over 100 stores in the traditional market and transform them to 'Shubh Jewellers’ during the coming year. The company expects to have a network of 175 stores by September 2007, compared with the 57 it presently owns.

The latest entrant to the stock market from within the sector, Gitanjali Gems reports an increase of 50 percent in sales during the quarter - from Rs 3,323.40 million ($71.5 million) during the corresponding period last year to Rs 4,981.50 million ($107.2 million). Gitanjali's profit after tax rose from Rs 89.03 million ($1.9 million) to Rs 211.04 million ($4.5 million) – a growth of 137 percent.

Jaipur based jewelry and colored gemstone exporter Vaibhav Gems showed another positive performance. The exporter reported an increased profit of Rs 44.8 million ($964,000), up from Rs 25.1 million ($ 540,000) in the same period last year on sales of Rs 490.4 million ($10.6 million) up from Rs 370.1 million ($8 million).

Classic Diamonds saw sales rising from Rs 1,146.7 million ($24.7 million) to Rs 1,606.3 million ($34.6 million) during the first quarter from Rs 3,323.40 million ($71.5 million) and profit after tax from Rs 17.8 million ($383,000) to Rs 5.95 million ($1.3 million).