Gitanjali Gems corrects on profit booking

Gitanjali Gems fell 2.52% to Rs 61.85 at 10:43 IST on BSE on profit booking after the stock surged 26.65% in the preceding two trading sessions to Rs 63.45 on 2 December 2014, from a recent low of Rs 50.10 on 28 November 2014.

Meanwhile, the BSE Sensex was down 10.92 points, or 0.04%, to 28,433.09.

On BSE, so far 2.07 lakh shares were traded in the counter, compared with an average volume of 3.23 lakh shares in the past one quarter.

The stock hit a high of Rs 64.65 and a low of Rs 61.20 so far during the day. The stock hit a 52-week high of Rs 108.75 on 22 May 2014. The stock hit a 52-week low of Rs 43.75 on 28 November 2014.

The stock had outperformed the market over the past one month till 2 December 2014, rising 10.06% compared with 2.07% rise in the Sensex. The scrip had, however, underperformed the market in past one quarter, falling 6.35% as against Sensex's 5.27% rise.

The small-cap company has an equity capital of Rs 98.12 crore. Face value per share is Rs 10.

Shares of jewellery retailers were in demand in the past few days after the Reserve Bank of India (RBI) late on Friday, 28 November 2014, eased gold import norms in a bid to curb smuggling of the yellow metal.

RBI in a circular said that the Government of India has decided to withdraw the 20:80 scheme and restrictions placed on import of gold. Accordingly, all instructions issued about the 20:80 scheme stand withdrawn with immediate effect, the RBI said in a notification.

The restriction, dubbed the 20:80 rule, was adopted in August 2013 to keep India's widening current-account deficit in check. The 20:80 scheme required that gold importers be able to prove that at least 20% of the precious metal they brought into the country would become jewelry exports.

On a consolidated basis, net profit of Gitanjali Gems declined 51.51% to Rs 18.34 crore on 17.73% decline in net sales to Rs 2471.11 crore in Q2 September 2014 over Q2 September 2013.

Gitanjali Group is an integrated branded jewellery manufacturer-retailer. The company's activities are spread across the entire value chain from rough diamond sourcing, cutting, polishing and distribution, jewellery manufacturing to branding and retailing gold and diamond jewellery in India and abroad.

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