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RAPAPORT... Shrenuj & Company Ltd. reported that revenue jumped 21 percent year on year to $426.2 million (INR 26.2 billion) for the first half of the fiscal year that ended on September 30. Profit improved 14 percent to $7.8 million (INR 482.3 million). The company stated that revenue increased 9.7 percent in the second quarter to $207.5 million (INR 12.8 million) and profit rose 10 percent to $4.4 million (INR 277 million).
Demand for diamond and jewelry was subdued, except during September for the U.S. and Europe, according to the company. A decline in gold prices and marginal improvement in the prices of the polished diamonds helped to ease pressure on margins as well. The prices for rough diamonds remained stable, but significantly higher than one year ago, and Shrenuj determined there has been just a little resistance to higher prices on the consumer side of the pipeline.
Private labels and Forevermark diamonds command a premium price and are continuing to experience sales growth in the double-digits. Still, Shrenuj observed that large format retailers ad chain-stores remain bullish on ordering for the Christmas and wedding seasons, while independent retailers are maintaining a cautious approach. The demand in India and China remains strong.
Shreyas K. Doshi, the chairman and managing director of Shrenuj, said, "The first half of the year has been a challenging period for the gem and jewelry industry. I am satisfied with our growth in this economic scenario and we are optimistic about the revenue prospects during the second half of the year. We are witnessing a improvement in margins but the continued high interest cost is a cause of concern for the industry. "Going forward, we are well poised to leverage our international distribution network to drive sales and profit margins. We will gain from the revival of demand in U.S. and India and expect a major share of revenue form these two economies."
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