Jewellery retailer Tara Jewels has reported its unaudited results for the six months ended September 30, 2013. The company recorded consolidated sales (excl. bullion) of Rs 6,812 mn as against Rs 6,073 mn in H1 FY13, a year-on-year growth of 12 percent. EBITDA (excl. bullion) stood at Rs 654 mn while the company recorded an EBITDA margin (excl. bullion) of 11 percent. Tara Jewels net profit stood at Rs 227 mn, recording a PAT margin of 3 percent. The company expanded its retail footprint with 50 operational stores spread over 37 cities in 12 states.
Commenting on the results Rajeev Sheth, Chairman and Managing Director, Tara Jewels, said: “Tara Jewels Limited is pleased to declare maiden interim dividend of Rs 1 per share. We have announced another strong quarter of performance with a profitable growth in both retail and exports business.As an integrated jewellery player we stand to benefit in terms of cost advantage and have an ability to serve the value added segment of the market even in the challenging regulatory environment. In the international business, we have seen a healthy growth in the orderbook backed by orders from large retailers of the world. In the current year, we have added new geographies, customers, brands and have widened our SKUs. We have a very strong pipeline of designs/collections with high revenue generating potential for the upcoming holiday season. The recent changes announced by RBI clearly indicate the Government of India intends to encourage the Exports of Jewellery by giving Exporters priority allocation of Imported Gold and simultaneously curb the imports of Gold for the Domestic Use.
He further added: "The 20:80 principle of RBI does not have a significant impact on Tara Jewels as we derive over 80 percent of the revenues from exports. In September 2013, the RBI has also disallowed Gold on Lease facility and restricted the Nominated Agencies to Import Gold for Domestic Use. The new requirements have restricted the supply of Gold for the Domestic Use. To adapt to the stringent regulatory environment we are Re-strategising the India Retail Business. We shall continue to expand our footprints through Shop-in- Shop model and look at options of Asset Light Franchise Model. We shall continue to monitor our existing stores in terms of profitability benchmarks and if require will look at options of relocations /closures of few stores. By adopting the new strategy we shall now limit our capital allocation and also increase the returns from the capital already invested.”
Commenting on Retail Business in India, Vikram Raizada, Executive Director and Chief Executive Officer (Retail), Tara Jewels, said:“In line with the commitment during the IPO we have 50 operational stores spread over 37 cities in 12 states. We have developed customer friendly store formats of 1,000 sq.ft. with browse walls and in-store workshops. As per our strategy, we are now focussing on achieving faster expansion with lesser capital outlay. In this direction we have already opened one store in the shop-in-shop format. Further, we are exploring options of taking up the Asset Light Franchise Model. In India, the strategy of the company is to capitalise the rising demand of the middle class customers for jewellery which is affordable, fashionable and reliable (certified). In 2010, we introduced a retail store format under the brand name Tara Jewellers. Currently in India, we operate 50 stores with an average size of 1,000 sq.ft. in the tier I, II, and III cities."
Tara Jewels caters to retailers across the USA, UK, Europe (12 countries including Austria, Germany, and Switzerland), Australia, China, South Africa, UAE, and Canada.