Buy Shree Ganesh Jewellery; tgt Rs 170: Sunidhi Securities

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Buy Shree Ganesh Jewellery; tgt Rs 170: Sunidhi Securities

Sunidhi Securities is bullish on Shree Ganesh Jewellery House (SGJH) and has recommended buy rating on the stock with a target price of Rs 170 in its February 16, 2012 research report.

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Sunidhi Securities is bullish on Shree Ganesh Jewellery House (SGJH) and has recommended buy rating on the stock with a target price of Rs 170 in its February 16, 2012 research report.

"Shree Ganesh Jewellery House (SGJH) is one of the largest manufacturers and exporters of handcrafted gold Jewellery of India, exporting primarily to countries such as U.A.E., Singapore, and Hong Kong. SGJHL has manufacturing units located in Mondalpara, Manikanchan SEZ which is presently the only jewellery SEZ in West Bengal and Domjur and U.A.E. SGJHL tapped the capital market in March 2010 with an IPO of Rs 315 crore priced at Rs 260 per share for expansion. The product range include handcrafted and hallmarked gold jewellery, gold enameled jewellery and gold jewellery studded with precious stones such as diamonds, rubies, emeralds, sapphires, pearls, etc and semi-precious stones such as garnet, cubic zirconium, etc. The portfolio includes rings, earrings, pendants, bracelets, necklaces, bangles and medallions. SGJH markets its jewellery products under brand name 'Gaja', 'Sitaare', 'GM', 'Marigiold', 'G Elements', 'Gold Bridals', 'Dianique', 'You' and 'Distar'."

"Expansion of the product portfolio to include Italian fusion jewellery will enable SGJH to cater to a diverse customer base in-turn adding substantially to volumes. The technological synergies from the JV with SALP SPA are expected to yield results in the coming quarters. With increasing proportion of high margin studded jewellery to the total revenues, margins are expected to improve going forward. As SGJH strengthens its retail presence in the domestic market by adding stores under the GAJA brand, retail contribution to total revenues in expected to improve in FY2012. SGJH's venturing into new territories like Europe, China and Africa and exploring retail opportunities in the overseas markets are expected to yield returns. SGJH is also scouting for diamond and gold mines in Africa. Venturing into new territories like Europe, Australia and Africa and exploring retail opportunities in the overseas markets are expected to yield returns in the near future. SGJH's continuous efforts to expand the product portfolio, demand for its specialized handcrafted jewellery, long standing customer relations, enhanced contribution of Italian fusion jeweler, foray into gold lending business, processing of gold refinery coupled with healthy demand of its products in the domestic as well as overseas market give strong visibility to revenue and profitability going forward. At the CMP of Rs 115, the share is trading at a P/E of 2.0 on FY12E. We maintain BUY with a target price of Rs 170 in the medium term," says Sunidhi Securities research report.

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To read the full report click on the attachment