FY2016 was another successful year for Tara Jewels. We grew our domestic and international businesses, increased our profitability and advanced key strategic initiatives. This enabled us to improve our competitiveness and create value for our shareholders.
Led by our long-term vision to become the preferred jeweller to the world and guided by our values, we continued to implement our strategy. Our clear focus on our business strategies and the dedication of our employees around the world were critical to delivering strong performance - despite a highly volatile and challenging business environment.
OUR FINANCIAL SCORECARD
We recorded net consolidate sales of Rs 1,801.31 crore, as compared with Rs 1,735.30 crore in FY2015. Our Net Profit stood at Rs 25.44 crore, as against Rs 43.6 crore. On the other hand, EBITDA grew nominally to Rs 124.37 crore, in comparison with Rs 158.6 crore a year ago. At the end of FY2016, our combined order book position was healthy at Rs 9,479 million, which included confirmed orders of Rs 3,574 million and framework orders of Rs 5,905 million. Despite a tough market situation in US and Europe, we derived strength from our domain expertise and experience in the gems and jewellery industry, presence across the jewellery value chain and our globally established clientele.
During the year, we witnessed good traction in our export business with addition of several new brands, customers and geographies. As we well understand the needs of consumers across the globe, we serve diverse markets and brands across multiple continents. With most of our business in exports today, we have a long history of successfully servicing these markets. We are also making steady progress into the large and lucrative Indian retail market.
JEWELLERY''S DIGITAL MAKEOVER
Change agents such as the internet age, computer aided design and manufacturing, 3-D printing and the new consumption behaviour of Gen-X, Y and Z is bringing about a transformational and tectonic shift in the way jewellery is being designed and manufactured by companies and purchased by customers. The technological revolution unfolding has been powered by Computer-Aided Design (CAD) software and Computer-Aided Manufacturing (CAM) hardware, such as 3D printers, which have drastically cut down the cost of manufacturing jewellery. The cost for making these capital expenditures has drastically reduced.
In India, we are pioneering the revolution by changing the way we do business. By moving away from the obsolete way of brick-and-mortar format to Internet-based and custom jewellery, we are essentially becoming the Change Agents. With digitization in design manufacturing through our CAD/ CAM and 3D printing machines, we are able to produce customized jewellery at competitive rates.
FRONT-RUNNERS IN THE TRANSFORMATIONAL CHANGE
Globally, we are well placed and entrenched with jewellery sales, with a strong focus on internet and brands. With good traction in our overseas business with new customers, geographies and brands, we are well positioned to take advantage of the transformational change. We take pride in having signed up more manufacturing and supply agreements with independent, specialty and online retailers in the overseas markets, catering to jewellery retailers across US, UK and Europe.
We will continue our focus on branded jewellery to gain more leeway in the international jewellery market. We aim to gain 40% of our total revenues from the branded jewellery segment. In the domestic market too, we are also scaling higher by way of an established presence in the online jewellery market through the e-commerce model. After all, we now live in an age where on-line buying has become the norm. We are also simultaneously expanding our retail footprint through the asset light franchise model to speed up capital expansion and cut capital allocation.
TARA MY KARIGAR
With a leading edge in design and creativity and a vast inventory of IP designs, we aim to be the hub for jewellery customization and pioneers in digitization. We are increasingly using digitization as a platform for conveying information, shaping brand identity and building customer relationships. We are the front-runners in catalysing the industry change. Leveraging our strengths in creating Made-to-Order bespoke jewellery, we set up our low-cost format Tara My Karigar (TMK), which is a revolutionary way of branded jewellery retailing. We are pioneering this revolution through our cutting-edge manufacturing technology, resulting in low-cost manufacturing and good engineering skills. With Made-to-Order jewellery constituting 30% of our India Retail Business, we see TMK as the way of the future and are exploring this model in jewellery stores and shopping malls. TMK is in line with our business strategy of an asset light model which will help deliver accelerated returns to shareholders. This is also a good way to gain brand visibility.
ACCELERATING WITH MANUFACTURING EXCELLENCE
Experience in designing, manufacturing excellence and efficient logistics and retailing of jewellery are our key market differentiators. While also being masters of volume production, we are also artisans of high-grade, customized jewellery for special occasions. Our quality and consistency are second to none, making us highly appreciated by global branded jewellery retailers. Our standard operating procedures in manufacturing aid us in catering to orders of all sizes with equal ease and finesse. We have established ourselves as a vertically integrated unit, serving customers across the value chain - right from design ideation to customization.
Through initiatives such as Tara My Karigar, we place value creation as a top priority, optimizing our cost structures and further enhancing the appeal of our brands and finding innovative ways to reach our customers. Through the sum of these multiple actions, we aim to further bolster our bottom line and return on equity. Our perseverance towards our goals is what is making us an enduring company - an enterprise that aims at consistent wealth creation for its share owners.
We live by our mission of delighting our customers, stakeholders and employees through excellence in service and design, transparent and clear communication and assured rewards. We are excited and optimistic for a glittering future. Deriving strength from the experience of our promoters, a presence across the value chain and our established clientele, we are performing today while transforming for tomorrow. And with an early-mover advantage, we are not only prepared for the big shift, but driving it forward.
I would like to take this opportunity to sincerely thank our board members, management team, and most of our customers for their support in shaping Tara Jewels to what it is today. Finally, I would like to express my deepest thanks to you, our shareholders, for having trust and belief in our Company.
I am confident that with your support, the Company will achieve greater heights of success in times to come.
Mr. Rajeev Sheth
Chairman & Managing Director