Poor sales, finance cost hit Gitanjali Gems' net

Lower net sales, higher finance cost impact firm's performance

Gitanjali Gems’s net profit fell 75 per cent to Rs 38 crore for the second quarter ended September because of lower sales and higher finance cost. Net profit in the year-ago quarter was Rs 152 crore.

Net sales during period decreased 23 per cent to Rs 3,004 crore from Rs 3,928 crore in the year-ago period. Finance cost rose 79 per cent year-on-year at Rs 183 crore during the quarter. Interest cost was up at Rs 178 crore during the quarter against Rs 93 crore in the same period last year. Employee costs jumped to Rs 87 crore against Rs 74 crore in the same period last year.

However, the company reported a rise in other income of 206 per cent at Rs 88 crore. Net profit in the diamond segment rose 160 per cent year-on-year at Rs 47 crore, while in jewellery fell 58 per cent at Rs 87 crore due to restrictions on gold import.

Gitanjali Gems said the board had accepted the resignation of whole-time director Sunil Varma, who offered to resign as he had taken charge of foreign businesses and affairs of the company.