Jewellery margins at 10%, diamonds at 4%: Gitanjali Gems

Q: Could you breakdown the individual margin picture for the jewellery and diamond side of the business because the profit numbers, that we have, seem to be about 10% on the bottomline, in terms of margins?

A: The margins are different for diamonds and jewellery. For jewellery, it is about 10% for exports and 12-15% for retail. For diamonds, the net profit is about 3-4%.

Q: What has been the rollout on the luxury part of the business where you were planning an Rs 100 crore capex?

A: In the luxury segment, we will be coming out with fashion goods and luxury apparel brands in the country. We would be marketing it through our high-end diamond and jewellery boutique stores, which we are planning to come out with. We would be following the franchising model, for expanding in the country

Q: With this changed mix, what do you think you might report in sales and profits in Q1 FY08?

A; There were a lot of developments, which have happened in the last six months, in the company. The results of which would start getting reflected from the first quarter of this year onwards like the Samuel Stores acquisition. We had undertaken this buyout in December last. It is a 100-stores chain on the West Coast with a topline of Rs 100 million. The profits and returns from this value chain would be quite substantial and would start getting reflected in the current year.

The FCCB issue, which we did in December last, has been started getting deployed. The results of that would be seen in the current year, along with the expansion and branding initiatives in our domestic segment. With the retail boom in India, sales are doing extremely well. As volumes pick up and ad spends per product come down, that all will be reflected in the net profit.