Experts/Company

Poll Result

Experts view

R S Iyer

(KR Choksey)

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Renaissance Jewellery is more than average issue. The counter demand for the issue is very good. Government policies seem to be favourable for such type of companies and such kind of companies gets lot of exports benefits. One should apply with long term appreciation.

Manish Bhatt

(Prabhudas Lilladher)

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Renaissance Jewellery looks attractive with short to medium term view. People should apply for the issue.

SP Tulsian

(Investment Advisor)

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Due to strengthening rupee, I.T., Textile and Gems and Jewellery Industry is passing through a very bad phase and margins are under severe pressure. Renaissance Jewellery - over 95% of its revenue is dependent on US market. The company intends to focus more on US markets and intends to supply to mid range retailers of US.

There are concerns on the workings of Gem and Jewellery companies, where they are especially having overseas revenue, without having its own retail presence. This company, broadly falls in this category. This is the main reason that even listed peers are very poorly discounted on the bourses.

Su-Raj Diamonds having a book value of Rs 140 with an annual sales of over Rs 1,600 crore, EPS of Rs 12 plus is now ruling at Rs 70. Shrenuj & Company having annual turnover of Rs 1,100 crore with an EPS of close to Rs 6 is ruling at Rs 50. This is inspite of their long presence in the market. Gitanjali Gems, a recently listed stock is fancied by the market due to strong inorganic expansion by the company, in the US market, in retail segment.

This company is likely to remain a mediocre player with annual turnover of close to Rs 600 crore. Even, infusion of Rs 35 crore as working capital in overseas subsidiary, may not be able to give a turnover of more than Rs 200 crore on an annualized basis. Hence, the whole object of Rs 80 crore investment and requirement of the fund, is not encouraging, attractive and justified.

At the upper band, PE ratio works out close to 8. Since, better plays are available in the secondary market, with much higher level of activity, the issue definitely appears to be unattractive and expensive. Hence, investment is not recommended.