“Revenue growth for the first two months of the quarter (January and February) was about 35%, while growth in March was significantly higher, skewed by the loss of sales due to the Covid-19 pandemic’s impact on our retail operations in March 2020,” according to the nation’s second-largest jewellery retailer’s quarterly business update released on the bourses. “The vast majority of our growth in the recent quarter was same store sales driven, as only two stores were opened during the past one year period.”
The significant driver of revenue growth momentum in India, according to the company, was a meaningful shift in consumer demand from the unorganised to the organised segment, evident in an increase in footfalls across its store network.
- Growth in India was broad-based across geographies, although the growth in south India was better than in non-south.
- While it did witness growth in higher-margin studded product portfolio, the acceleration in demand for its plain gold jewellery products was higher, particularly for faster-moving, staple, regionally-oriented gold jewellery collections which carry lower making charges.
Still, gross margin of the jewellery retailer, which started operations in Thrissur, Kerala, was adversely impacted due to the Covid-19 pandemic and the recently announced reduction in customs duty.
The government in the Union Budget for 2021-22 had reduced basic customs duty on precious metals such as gold and silver from 12.5% to 7.5%.
- The Middle East business witnessed about 20% year-on-year decline in revenue in the reported quarter, partly attributable to the company’s decision to close seven stores in the region (out of a total base of 37 at the time) during FY21.
- Other than nine stores in Maharashtra, all of its stores in India were currently operational.
- “We are closely monitoring the evolving situation on the ground in relation to the ongoing Covid-19 pandemic.”
Shares of Kalyan Jewellers gained as much as 7.3% around noon on Thursday to Rs 75 apiece. The company listed on the stock exchanges on March 26.