Rajesh Exports posts 51% rise in Q3 net profit

Rajesh Exports Ltd, India’s largest exporter of gold jewellery, on Thursday announced a 51 per cent rise in net profit at Rs 114.7 crore for the third quarter-ended December 31, 2011, compared to the corresponding quarter last fiscal. The operating profit for the quarter rose 2.1 times to touchRs 228.8 crore as against the year ago period. The rise in profits is mainly due to a growth in profit from the retail operations. The company’s retail business doubled during the third quarter to Rs 400 crore compared to the year ago period.

The net sales during the quarter increased 26 per cent to Rs 6,518 crore as against the same period last year.

The growth in sales was driven by export business and also the retail sales. The retail sales contributed to 6 per cent of the total sales during the quarter.

“We are confident of achieving an year-on-year growth of 10-15 per cent in the total revenues during the year-ending March despite unfavourable market conditions. We have a strong order book position presently and plan to expand our retail network to improve our business,” Rajesh Mehta, chairman, Rajesh Exports Ltd said.

The order book position of the company has shown an year on year growth of close to 20 per cent at Rs 4,912 crore. These orders are to be executed during the fourth quarter-ending March 2012. The company plans to raise Rs 2,000 crore through external commercial borrowing (ECB) route during the next 45 days. Canara Bank is leading the consortium of both Indian and foreign banks to arrange the loan in dollar denomination. The fund will be mainly utilised to fund its retail network expansion. It plans to add 55 retail outlets in Karnataka under the brand, “Shubh” jewellers.

Presently, it operates 75 outlets mainly in Karnataka and it plans to add 500 showrooms by the year 2014 across South India.