News

Advanced Search

Rough Slowdown Weighs on Asian Star

Nov 18, 2019 9:46 AM   By Joshua Freedman
Comment Comment Email Email Print Print Facebook Facebook Twitter Twitter Share Share


RAPAPORT... 
Sales and profit slumped at Indian diamond manufacturer Asian Star in the second fiscal quarter as weak rough demand prompted it to reduce its trading activities.

The Mumbai-based company supplements its core cutting business by reselling rough through its subsidiaries, Pranav Kapadia, Asian Star’s chief manager for accounts and tax, explained to Rapaport News Monday. Revenue from that segment declined during the three months ending September 30 due to pressure on the manufacturing sector, he added.

As a result, group revenue fell 27% year on year to INR 7.98 billion ($111.2 million) in the three-month period, while net profit dropped 66% to INR 130.8 million ($1.8 million), the company reported in a statement last week. Excluding subsidiaries, revenue slipped 5% to INR 6.67 billion ($92.8 million), while profit declined 16% to $1.3 million (INR 94.7 million), reflecting a more moderate slowdown in its diamond- and jewelry-manufacturing operation.

“Demand has been slow because of a lot of inventory in the pipeline,” Kapadia said. “Manufacturing was low, so the rough-trading opportunities were very minimal. The opportunities that were available were not that profitable. If you look at our manufacturing business, which is our core business, that has done [relatively] well.”

Results are likely to improve in the coming months as inventory levels have stabilized, Kapadia added. The company, a sightholder focusing on smaller goods, has continued to buy from De Beers and other miners at normal rates, instead reducing its supply from the open market, he continued. Manufacturing margins have been stable versus a year ago, as the company chose to walk away from deals rather than compromise on profitability, he reported.

Image: Rough diamonds. (Shutterstock)
Tags: Asian Star, cutting, India, Joshua Freedman, Manufacturing, mumbai, Polishing, Rapaport News, rough, Rough Diamonds, rough trading
Similar Articles
KGKKGK Opens Angola Cutting Factory
Nov 07, 2019
KGK Diamonds has become the fourth company to open a cutting factory in Angola as part of a national project
Comments: (0)  Add comment Add Comment
Arrange Comments Last to First
© Copyright 1978-2020 by Rapaport USA Inc. All rights reserved. Index®, RapNet®, Rapaport®, PriceGrid™, Diamonds.Net™, and JNS®; are registered TradeMarks.
While the information presented is from sources we believe reliable, we do not guarantee the accuracy or validity of any information presented by Rapaport or the views expressed by users of our internet service.