, “The Company has been on consistent path of progress and would be able to continue its growth trajectory through robust expansion plans.”
Given the spike in gold prices and widespread of Covid-19, how was the first half year of FY 21 just gone by?
In the backdrop of the CoVID-19 pandemic and subsequent lockdown, the stores of the Company were closed during Apr.’20 and May 20, which led to loss of revenue on the festive occasion of Akshay Tritya. However, the Company saw a brighter beginning in second quarter with encouraging footfalls and greater revenue on account of spiraling gold prices. Moving ahead as the wedding and festive season lies ahead of us, we foresee a substantial increase in demand of gold and diamond jewellery. Further, we expect gold jewellery to remain in high demand due to the high promising returns given by it in the last decade.
Can you give us a brief on the financials of D.P. Abhushan Limited?
D.P. Abhushan’s consolidated revenue for F.Y. 2019-20 stood at Rs. 809 crores with a PAT of Rs. 16.44 crores and EPS of Rs. 7.39/- per equity share. We are growing at a pace of 35% in terms of Profits in last 4 years, which is highest as compared to other listed peers. The total Revenue for the half year of FY 21 remained to Rs. 213.73 Cr., down by almost 37% as compared to H1FY20 on account of the pandemic and lockdown. However, the PAT for the half year expanded by 52.7% to Rs. 10.3 Cr. as against Rs. 6.8 Cr. in last H1FY20 on account of reduction in operational & interest expenses and increase in price of gold.
What is the unique strength of DP Abhushan in terms of product offerings?
In the 80 years of our long journey, D.P. Abhushan have been an inseparable part of festivals, weddings, celebrations and happy occasions of lakhs of our customers across generations. Our brand is built on the pillars of impeccable quality, finest workmanship and a tremendous value for money. Our each piece of jewellery is creatively designed to appeal the eyes and is built with a quality that you can trust. Available in dazzling designs, we have a unique collection in traditional, contemporary and modern day jewellery with studded colored stones and floral motifs. We believes in mix and match, blend of myriad tastes, old traditional design with innovative indo-western ideas that gives freshness and fragrance to jewellery. Be it purity & designs, transparency in pricing or the shopping experience we pay equal attention to all aspects to craft a memorable user journey. I
What measures does the Company take to mitigate the risk of gold price fluctuation?
To mitigate the risk of gold price fluctuation, we follow the practice of buying the same quantity of gold which is sold by us on daily average basis. This practice acts as a natural hedging against gold price fluctuation. Moreover, unlike many other listed Companies, the cost of our gold inventories is determined on weighted average basis, which eliminates the impact of high fluctuation in gold prices to a certain extent, and thus makes Company more competitive in financial terms.
What is your outlook on the jewellery industry?
The outlook is absolutely positive. The market size of Indian Jewellery Sector was about $75 billion in 2017 and is expected to reach $100 billion by 2025. In 2019, India ranked second highest consumer of gold in the World, supported by increasing disposable income of the middle-class. Rapidly increasing middle-class population has lead to increase in the demand of gold. However, a majority of the jewellery sector is still unorganized but this situation is expected to improve in the coming years due to increasing brand awareness in the minds of the consumer.
What are your expansion plans for fiscal year 2021?
The Company has launched its two new aesthetic showrooms in Ujjain (M.P.) and Bhilwara (Rajasthan) in Aug.’ 20 and Oct.’20 respectively and is all set to open another new showroom in Kota (Rajasthan) by the end of FY 21. The increasing footfall and demand of jewellery from consumers encourages us to open more stores. By the end of this financial year, our Company will also be offering to the tech savvy generation of online shoppers, daily wear, light weight lower price point jewellery on its own e-commerce platform, which will have state of the art technological features appealing to the young customers.
The Company has recently migrated to Main Board of NSE. Can you comment on the stock performance of the Company?
Yes, recently on 3rd of November, our Company got migrated from NSE Emerge to Main Board of NSE. The Initial Public Offer of the Company was brought by us together with the Lead Manager, Hem Securities Limited in Oct.’ 2017, wherein the share price was offered at Rs. 28/- per share. In the 3 years, the stock of the Company has given a return of around 200% to its shareholders. The Market Capitalization of Company at the time of IPO in 2017 was Rs. 62 Crores which has now gone around to Rs. 200 crores in just 3 years.