Aim to maintain expansion of 1lk sq ft a year: PC Jeweller

Sanjeev Bhatia, CFO, PC Jeweller is very upbeat on the continuation of expansion target of one lakh square foot for every year. For this year too 66,000 sq feet of retail area expansion has already been completed.Throwing more light on the third quarter performance he said both gold and diamond segments showed growth. In case of new stores, the percentage of gold sale is higher than that of diamonds and as the stores mature, the percentage of diamond sales goes up, he adds.PC Jeweller’s third quarter net profit surged 36.6 percent year-on-year to Rs 109.3 crore on strong revenue and operating growth. Total income grew 40.4 percent to Rs 1,821.7 crore in December quarter from Rs 1,298 crore in same quarter last year, driven by exports as well as domestic jewellery business.Bhatia is also confident of the company's debt going down from the current Rs 700 core.

Below is the transcript of Sanjeev Bhatia's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.Latha: What went very well? What kind of sales, was it global sales, was it domestic sales. Where exactly did you pick up?A: We have picked up both in domestic as well as in global sales. Our domestic sales figures are also high, as we have been opening more stores. Also our strategy of concentrating more on tier one and tier two is now paying off though from bottomline. The diamond sales have also gone up.The diamond sale percentage has gone up more in a metro, so now we are benefiting from twin-pronged movement. Our bottomline is coming more as diamond’s percentage goes up in metro where on topline, we are seeing good growth in tier one and tier two.Latha: What contributed a greater speed in the revenues? We are given to understand that gold jewellery constitutes 64 percent and diamond jewellery 35 percent but which segment grew faster?A: It’s a mixture. Our diamond jewellery percentage has also gone up to 35 percent on an increased base, so both the segments have grown. I am trying to say that there is a slight demarcation, as you open new store, the percentage of gold is higher and as stores become mature the percentage of diamond sales increase in them faster. So we have a twin benefit coming along at this point of time and diamond sales contribute more to the bottomline. Sonia: Between the exports and domestic business, where do you earn higher margins and going ahead do you think you will be able to hold on to 11.5 percent margin level?A: Our margins in domestic business are much higher than export business but our export component ensured that we could get steady supply of gold in those difficult days. Our steady state export margins are 8.5 percent but we do keep on gaining if there is foreign fluctuation. So sometimes our export margins also jump up substantially but in the steady state our domestic margins are twice vis-à-vis export margins.Latha: What are your store expansion plans?A: We continue to be on our expansion spree. This year we have already added more than 66,000 square feet of retail area. Our target is of 1 lakh sq ft and we are working hard to achieve that. Going ahead, we would like to maintain an expansion rate of 1 lakh sq ft every year.Sonia: What is the debt situation of the company? The last we checked, you had close to Rs 700 crore of debt. How much do you plan to bring it down by in the next one year?A: The debt situation is very comfortable. Our finance percentage is going down as we are moving on lease and debt is coming down. Tthough I won’t be able to give exact figure at this point of time but vis-à-vis when we see the March figure and September figures, we would see reduction and going forward also as the lease scheme continues, we will see gradual decline in overall debt position.