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PC Jeweller to Increase Focus on Diamond Jewelry
Feb 8, 2013 6:04 AM
By Dilipp S Nag
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RAPAPORT... India’s PC Jeweller Ltd. (PCJ) plans to enhance its focus on diamond jewelry given their higher profit margins and as consumers' buying behavior is increasingly shifting towards diamond jewelry from gold jewelry.
PCJ on Thursday reported sales of $191.7 million (INR10.19 billion) and profit of $12.6 million (INR 669 million) in its fiscal third quarter that ended on December 31. It didn’t give the comparable figures for one year ago as the company was unlisted at that time.
The New Delhi-based jeweler reported domestic sales of $161.2 million (INR 8.56 billion) and exports of $30.5 million (INR 1.62 billion) during the quarter. Diamond jewelry accounted for about 27 percent of the domestic sales. However, PCJ said that the percentage of diamond jewelry sales domestically was reduced in the third quarter, but it believed that trend was only temporary and expected a recovery in the fourth quarter.
The company, which retails under the PC Jeweller brand, stated that it is working actively on shifting its jewelry sales mix towards diamond jewelry. The company has augmented its diamond jewelry manufacturing and designing capabilities and expects these enhancements to lead to sustainable growth by volume as well as for the company's margins.
PCJ expects the percentage of diamond jewelry sales to grow to approximately 35 percent in the current fiscal year ending in March 2013, from around 27 percent a year earlier.
Securing Supply
The company said that it has signed gold lease agreements with a number of agencies and banks to secure its gold supply, while it procures loose cut and polished diamonds from a number of vendors in Surat and Mumbai.
PCJ said that it is spending approximately 1 percent of its revenue on advertising to build consumer awareness about the brand in preparing for a pan-Indian expansion. PCJ raised around $111 million (INR 6.09 billion) through its initial public offering in December to fund its retail expansion across India.
The company currently operates 30 stores, mostly large format, in north and central India. It is looking to open 20 showrooms by fiscal 2014 in southern and western parts of India where it does not have a presence yet.
For the nine months ending in December 2012, the company reported sales of $541.1 million (INR 28.74 billion) and net profit of $39.2 million (INR 2.08 billion).
*Note: All data was published in rupee. Any references to U.S. dollar amounts were made according to exchange-rate conversions by Rapaport News.
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Tags:
consumer, diamond, diamond jewelry, Dilipp S Nag, gold, Gold jewelry, India, ipo, jewellery, Jewelry, PC Jeweller, PCJ, retail
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