Speaking to CNBC-TV18 on his outlook for the jewellery business, RK Sharma, chief operating officer, PC Jewellers says there has been a shift in demand from gold to diamond jewellery.
Despite seeing a fall in investments, RK Sharma, chief operating officer, PC Jewellers says the company's margins won’t take a hit as customers continue to buy jewellery.
Speaking to CNBC-TV18 on his outlook for the jewellery business, Sharma says there has been a shift in demand from gold to diamond jewellery now.
Additionally, he expects the company to grow at around 25 percent in Q3.
Below is the edited transcript of Sharma's interview to CNBC-TV18.
Q: What kind of demand have you seen this festive season and how does that compare to last year?
A: This year is good, but investment demand is less this year. For branded players this season is also good.
Q: Could you tell us historically how much does the Diwali season contribute to your sales and this time around because the consumer sentiment is weak what is your expectation from sales on account before and after Diwali?
A: As far as the jewellery industry is concerned, the second half is always better. Diwali onward there is wedding season also, so best part of the sales comes in Diwali and after the Diwali period.
This year there are certain factors that affected the investment buying. Also, there is a shift from gold to diamond jewellery.
Q: Would you say that that would lead to good growth for you in the second half of this year compared to the first half of this year?
Q: What kind of numbers are you expecting in the second half?
A: I cannot tell you a number right now, but almost 60 percent of the total turnover comes in second half and Diwali and wedding season is the days when jewellers get business.
Q: What is your expectation of sales growth for the entire year?
A: That will be around 25 percent.
Q: Given the demand has been on the weaker side are you expecting some margin pressure for the entire year?
A: No. There is a pressure on investment buying, not on jewellery buying and there is a shift on diamond jewellery from gold jewellery, so margins are not going to depress. We would be getting the same margins.
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