Kalyan Jewellers Q1 net loss contracts to Rs 51 cr

Kalyan Jewellers India reported consolidated net loss of Rs 51.30 crore in Q1 June 2021 (Q1 FY22) compared with net loss of Rs 85.87 crore in Q1 June 2020 (Q1 FY21).

Consolidated revenue from operations surged 109.19% to Rs 1,636.77 crore in Q1 FY22 as against Rs 782.40 crore in Q1 FY21, primarily driven by robust sales momentum across stores both prior to and post lockdowns in the recently concluded quarter, as well as a low base in the last financial year. While the India revenue grew by 94%, Middle East growth was 183%. Pre-tax loss was at Rs 64.92 crore in Q1 FY22 as against a pre-tax loss of Rs 77.24 crore in Q1 FY21. The Q1 earnings were declared during market hours today, 10 August 2021.

At a consolidated level, the company recorded Earnings Before Interest and Tax (EBIT) of Rs 11 crore for the quarter compared to Rs 68 lakh in the same quarter of the previous year.

The robust momentum that the company witnessed at the start of the current financial year slowed down once lockdowns and restrictions were imposed by various State governments in the last few weeks of April 2021. Following the second wave of COVID-19, most stores remained closed during the month of May 2021. In June 2021, Kalyan witnessed strong momentum in the stores that were open. The company recorded a 68% same store sales growth (excluding revenue from gold savings schemes) for June 2021 as compared to the prior year, adjusted for store operational days in both periods.

In the Middle East, almost all the showrooms remained operational through the recently concluded quarter and the region witnessed a strong recovery in April 2021, similar to the recovery levels witnessed during Q4 FY21. However, on the back of a peaking second wave of COVID-19 in India, there have been temporary disruptions to business in the region driven largely by the travel restrictions imposed between India & Middle East, as well as muted consumer sentiment amongst Indian expats in the region.

The e-commerce division Candere has continued its growth momentum. The revenue for the recently concluded quarter was at Rs 24 crore as compared to Rs 5 crore in Q1 FY21, recording a growth of 363%. The company recorded a PAT of Rs 31 lakh compared to a loss of Rs 1.08 crore for the same period of the last financial year.

Kalyan Jewellers India's retail footprint is spread across 146 stores in 21 Indian states and 4 countries in the Middle East, with a retail area exceeding 5,00,000 sq. ft. The company added 9 new stores in the recently concluded quarter - 4 in Tamil Nadu, 3 in Telangana and 1 each in Gujarat & Kerala.

Ramesh Kalyanaraman, the executive director of Kalyan Jewellers India, said, "The outcome of the first quarter has been above our expectations and we are happy with the overall performance. The pace of demand recovery witnessed in the just concluded quarter was higher than what we experienced in Q1 FY21, and the momentum in the stores that were operational was similar and comparable to that in Q4 FY21. The compulsory hallmarking move by the Government will play significant role in transforming the sector and making it more transparent, while also accelerating the shift from unorganised to organised. The organised players in our sector have significant tailwinds and we are well positioned to address this opportunity."

Kalyan Jewellers is one of the largest jewellery companies in India in terms of revenues. The company designs, manufactures and sells a wide range of gold, studded and other jewellery products across various price points ranging from jewellery for special occasions, such as weddings, which is the highest-selling product category for the company, to daily-wear jewellery.

Shares of Kalyan Jewellers fell 1.27% to Rs 66.05 on BSE. The stock hovered in the range of Rs 65 to Rs 67.50 so far.

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