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Tara Jewels 3Q Profit -33%
Feb 11, 2014 8:18 AM
By Deena Taylor
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RAPAPORT... Tara Jewels Limited reported that its revenue was essentially flat, rising 0.4 percent year on year to $81.3 million (INR 5.05 billion) for the third fiscal quarter that ended on December 31, 2013. The company's profit fell 33 percent to $3.5 million (INR 220.5 million).
During the quarter, the company experienced 6 percent growth across its international business, which accounted for 85 percent of its revenue. Demand primarily stemmed from the U.S., China and Australia.
In contrast, Tara's retail business in India was flat largely due to the challenging regulatory environment set by the Reserve Bank of India (RBI) to curb gold imports. Consequently, the company has re-thought its retail business strategy and will continue to expand, though through an ''asset-light'' franchise model and shop-in-shop format.
"The 20:80 principle of RBI does not have a significant impact on Tara Jewels as we derive around 85 percent of the revenue from exports," said Rajeev Sheth, Tara Jewels' chairman and managing director.
The company noted that recent changes announced by RBI indicate that the government plans to encourage jewelry exports by giving exporters priority allocation of imported gold.
During the first nine months of the fiscal year, Tara Jewels revenue fell 27 percent to $192 million (INR 11.93 billion). Net profit dropped 39 percent to $7.2 million (INR 447.5 million).
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Tags:
Deena Taylor, gold, Jewelry, Tara Jewels
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