Its been two and half years since this thread is active.. there have been lot of changes in this company. After a two years of sluggishness again it seems to be on the right track..
It is in turn around stage from last two quarters and posted good numbers in Q2FY16.
What went wrong
Aggressive expansion by leveraging debt
Gold price reduction and there by lesser realizations
industry and govt policy changes
Inventory pile up and when the gold price reduced went into losses
Corrective measures taken by company
Cost cutting by various means –
Investing in technology ( SAP & iQlik) and reduced inventory
decrease in adverstising spend
No new stores until current stores stabilized
Cost cutting in operations and mfg – Employee strength is reduced
improvement in Working capital and inventory turns
Reduction in debt
Positives
30 stores with 25% Market share
Good brand recall in its own territory
Gold prices are stabilized around 25K to 26K
Favorable policies by govt
Same sales growth is good even though ad spend is reduced
Volumes are growing but realizations are less so far. since prices are stabilized, realizations will go up
last two quarters shown turn around
Dec Qtr is biggest and expected to post a good net profits
Negatives
Competition is high and no new stores planned for now
Others who are monitoring closely please post your views.
Disclaimer: Not invested yet.
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