Shrenuj Q1 Profits Decline Despite Increased Sales

(IDEX Online News) – DTC Sightholder Shrenuj & Company Limited, a Bombay Stock Exchange listed company, announced a 34 percent decline in profits to Rs.127.2 million ($2.3 million) for the first quarter of fiscal 2012-13 (ended June 30).

The decline in profits came despite a 5.5 percent increase in sales revenue to Rs.7.14 billion ($128.2 million). The company posted a profit after tax of Rs.51.5 million ($924,300), down 49.1 percent from Rs.101.2 million ($1.8 million) in the same period the previous year.

“The demand for luxury products and the associated discretionary spending has been declining over the past few months. The global economic growth forecasts are also being revised downwards now. In this shrinking market, we have been able to grow our market share,” said Shrenuj chairman and managing director Shreyas Doshi.

“We believe that profitability will be restored to previous levels in the coming quarters since the input prices have stabilized to a great extent now. And these results have to be seen in the perspective that last year, Q1 was exceptionally good due to a sudden surge in the prices of polished diamonds. In that sense, the results may not be totally comparable.”

“The weakening rupee had an impact on domestic jewelry demand. However, the softening of gold prices in U.S. dollar terms neutralized this effect,” said group executive director Vishal Doshi

“We believe that the domestic demand for diamonds in India and China will still be good, despite lowered forecasts on economic growth. Also, during the current year, we plan to strengthen our presence in all our other existing markets and concentrate on gaining bigger market shares in them till the economic uncertainty reduces a bit,” he added.