Rajesh Exports' net up 2.26 times to Rs73.7 cr in July-Sept

Bangalore-headquartered jewellery maker and exporter Rajesh Exports Ltd has posted a 2.26 times rise in its net profit to Rs73.7 crore during the July-September period of the present financial year on the back of higher earnings from its retail jewellery business.

The total revenues of the company during the second quarter also witnessed a 25.26 per cent rise to Rs5,039.5 crore.

Operating profit of the jewellery exporter rose over two times to Rs117.2 crore in the second quarter compared to Rs45 crore recorded in the same period last year.

“Higher profit margins in the retail business, of around Rs20 crore, and a sound demand for exports are the major factors for pushing up the bottom line during the quarter,” Rajesh Mehta, chairman, Rajesh Exports, said.

Private label business also contributed towards this, he added.

The company, which has entered the retail jewellery business with its ‘Shubh’ outlets, is hopeful of increasing its profit margins soon.

“From a margin of 2-3 per cent as of now, we expect our business to deliver an 8 per cent margin in near future on the back of higher profitability from our retail business,” he said.

The company is consciously working on shifting the present composition of various verticals with higher focus on the retail side, he added.

Usually, the company gets 2-3 per cent margin from its exports and wholesale business and over 8 per cent profit margin from its jewellery business. To push up the bottomline, the company aims to increase the contribution of retail business to 50 per cent of total sales from the present 4 per cent in the next three years while reducing the share of exports to around 40 per cent from the present 90 per cent.

“By end of this fiscal, we aim to open around 60 retail jewellery stores in the country and reach 450 stores in the next three years,” Mehta said.

The company has around 30 stores in the country with a majority of them in Karnataka as of now, he added.

The company is also looking to to acquire a gold mine in Madagascar or West Africa by the end of this fiscal.

Rajesh Exports, which has internal accruals of around Rs1,200 crore, will fund its expansion from its own reserves.

“We have enough liquidity to fund our expansion as of now. However, we may look at External Commercial Borrowings to raise money in the next 12-18 months to fund our further business growth,” he said. He, however, declined to give specific figures.