|
RAPAPORT... Tara Jewels Limited reported that its revenue jumped 15 percent year on year to $54.4 million (INR 3.3 billion) for the first fiscal quarter that ended on June 30. The company's expenses surged 16 percent to $49.8 million (INR 3 billion) and its profit leaped 32 percent to $1.9 million (INR 116.4 million). Tara Jewels expects to add 13 new stores across India this year, bringing the total number of showrooms to 50 in 37 cities. Rajeev Sheth, the chairman of Tara Jewels, said, ''The results are a strong affirmation of our strategy of being an integrated jewelry player. This has given us cost advantages as well as the ability to serve the value added segment of the market.'' Sheth added that the international business is healthy, backed by orders from large retailers and it expects a strong return from its collections in the pipeline leading into festive season. ''The recent changes announced by the Reserve Bank of India (RBI) clearly indicate the government of India intends to encourage the exports of jewelry by giving exporters priority allocation of imported gold. The 20-to-80 principle of RBI is very favorable for Tara Jewels as we are a nominated agency itself and also derive over 80 percent of the revenue from exports,'' Sheth said. The board of directors noted to the company's shareholders that it supports a suitable dividend, but the company needs to retain a healthy financial position in order to balance the objective of appropriately rewarding the shareholders and retaining capital for ongoing operations. When the dividend is determined, due consideration will be given to the amount of profit to be retained to support the medium and long-term strategic plans of the company, according to its statement. Vikram Raizada, Tara Jewel's CEO, said that the domestic retail business has contributed to the company’s good performance in the quarter, which explains the urgency of capital spending on new locations. ''We have already launched seven company owned and managed showrooms and are in an advance stage to launch another 13 by the end of the coming quarter. In the current environment for the retail business to be profitable the business model needs to focus on cost efficiency. The size of the stores at 1,000 square feet is more appropriate. Our store formats are smart, scalable and sustainable and specifically designed to make profitable growth.''
|