Will sustain 20% annual growth, open 12 new stores: PC Jeweller

PC Jeweller is likely to sustain 20 percent annual growth and would post stable margins at 10 percent going forward, says Sanjeev Bhatia, CFO of the company. In an interview to CNBC-TV18, Bhatia says stable gold prices have helped push demand. On online sales, he says through the website wearyourshine.com, the company can create buzz online on occasions like Valentine's Day, Mother's Day, etc., unlike normal stores, though the quantum of online sales is still negligible.PC Jeweller is likely to open 12 new stores in tier-II and tier-III cities by the end of this year, Bhatia says, adding, the company has opened two new stores in Q3.Below is the transcript of Sanjeev Bhatia’s interview with Sonia Shenoy and Latha Venkatesh on CNBC-TV18.Sonia: Just tell us about the nine months that you have seen because the numbers have looked quite good. In nine months of this fiscal, you have seen a revenue growth of 24 percent and a profit growth of 25 percent. Can this trend continue?A: We have been helped a lot by the stable gold prices, frankly. We have always been maintaining that as the gold prices become stable, the consumers come back. It actually results in a decline in the investment demand, but an upsurge in the jewellery demand. So, that is point number one. Point number two is, we have been opening more stores in Tier-I and Tier-II, smaller locations like Bhagalpur, Yamunanagar, Siliguri, where the penetration of organised jewellery retail is still very less. But, the people are conscious about the brands, they want purity, designs, they want more variety and we have been getting very good traction from these stores.And at the same time, you keep on introducing new designs, new varieties, try to create a relationship.Latha: What is your sense of full-year FY16? And more importantly, FY17? This is festival quarter, but on a full-year, on an average, how much might you do revenues?A: Though we do not give any exact guidance, it is not possible especially in the retail industry, because something can happen at any point of time. But we have been growing at about 20 percent every year and we expect the same trend to continue. I am confident that we should maintain the same growth rate.Latha: Can margins improve? I mean I would assume that your new stores are coming at lower rents, so should margins do better than 10.8 percent?A: Margins are highly dependent on the proportion of diamond jewellery that we are able to sell. And, frankly, if you notice, the percentage of diamond jewellery has gone down in this quarter vis-à-vis the previous quarter, because as the gold prices slightly decline, in India gold still remains the king. So, though we are pushing diamond jewellery and if the diamond jewellery percentage goes up, our margins would certainly improve.For entire interview, watch accompanying video...