ICRA Limited
An Associate of Moodys Investor Services
Presentation Flow
1 2 3 4 5 6 7 8 9 Indian Gems and Jewellery (G&J) Industry Structure & Overview Indian Cut and Polished Diamond (CPD) Industry Structure & Overview Indian CPD Industry Key Credit Risks & Mitigating Factors Indian CPD Industry Key Figures and Trends Indian Jewellery Industry Structure & Overview Indian Jewellery Industry Key Credit Risks & Mitigating Factors ICRAs Rating Category Profile ICRA Rated CPD Companies Key Financial Trends Key Credit Metrics for G&J industry
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
ICRA Limited
An Associate of Moodys Investor Services
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
Key Mitigants:
Reduced dominance of DTC with emergence of alternative suppliers Sightholder Status (esp. supplier of choice) with DTC; tie-ups with multiple miners leading to diversification of supply side risks
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
FY11 27.7 74.8% 647.4 33.2% 426.7 31.6% FY11 11.9 34.4% 1539.8 3.2% 77.9 30.6%
FY12 23.2 -16.3% 517.3 -20.1% 449.7 5.4% FY12 15.0 26.3% 1308.1 -15.1% 118.0 51.5%
ICRA Limited
An Associate of Moodys Investor Services
4,500 4,000
600
1,500
1,000
200
100 500 0 Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 0
FY09
FY10
FY11
FY12
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
0
Apr-08 May-08 Jun-08 Jul-08 Aug-08 Sep-08 Oct-08 Nov-08 Dec-08 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12
FY09
FY10
FY11
FY12
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
Sales Channel: Online and Retail Pricing: Ruling gold prices plus making charges
Key Customers: Wholesalers and Retailers Key Destinations: Domestic and Export markets
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
B 7%
BBB 28%
ICRA Rates over 180 companies in the gems and jewellery sector with a healthy mix of CPD and jewellery companies Within the CPD space we rate both traders as well as manufacturers; on the jewellery front, we cover manufacturers, wholesalers as well as retailers In India, most of the leading jewellery retail companies are backward integrated into manufacturing which gives cost advantage in a highly competitive market At the wholesaler level, typically margins are extremely low at 1-3% at operating level At the retail level, margins at the operating level could be upwards of 12-15%
BB 58%
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
84.5
1.0%
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
2.5
1.8 1.8 1.2
2.0
Gearing
2.0
1.5 1.0 0.5 0.0
1.8
1.5
1.6
FY07
FY08
FY09
FY10
FY11
45%
48%
43%
41%
ICRA Limited
An Associate of Moodys Investor Services
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
Indian Gems and Jewellery Industry: An ICRA Perspective Mumbai - July 12, 2012
Thank You
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