Download - R 158 R 248 R 87 R 252 R 216 R 165
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Investor Presentation
June 2013
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Overview of Gitanjali Group
Owns 8 out of the top 10 diamond jewellery brands in India
Owns key Italian brands and leading retail chain in the US
Brands built over the years through extensive marketing campaigns independently valued at over
US$1bn
Established in 1966, Gitanjali Gems is one of the largest integrated branded jewellery players in
India; Experience of around five decades in the Indian gems and jewellery business
Pioneer in the branded jewellery segment and amongst the first few companies to launch own outlets
to sell branded jewellery in India
Present across the entire value chain from sourcing to manufacturing to retailing
State of the art manufacturing with 3 cutting and polishing facilities and 9 jewellery manufacturing
facilities (235,000 pieces per month) across India and China
Combination of diamonds and gold branded jewellery across various price points
Business model rapidly shifting from C&P1 diamonds to branded jewellery thereby improving
margins and cash flows
Till recently gold price fluctuation was hedged through a gold loan arrangement thereby derisking
any price fluctuation; Recent change in RBI policy on gold loan to have marginal impact for a short
term
Mehul Choksi, Chairman & Managing Director, is an industry veteran and has received several
awards and recognition for his entrepreneurship and innovation
Supported by highly professional experienced management team
Design bank of 0.3mn SKUs, 10,000 active SKUs and 4,000 new active SKUs added every year
Over 360 distributors selling to over 3,000 retailers and 1,100 retail outlets across the formats of own
stores, franchisee and shop in shops across India, US, Japan, China and Middle East
Leading Jewellery Player
Well established Brands
Extensive Design Collection with
Wide Distribution Network
Integrated Player
Highly Attractive Revenue Mix
With Low Commodity Price
Risk
Strong Management
(1): Cut and Polish
1
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Formed JV with ‘D'Damas’
Started jewellery operations
at the manufacturing units
in SEEPZ, Mumbai
IPO of Gitanjali Gems Limited
Acquired Samuel Jewelers Inc, USA for retail
presence in the US
Formed JV Sanghavi Exports for manufacturing
and marketing ‘Sangini’ brand
Acquired the brand ‘Nakshatra’
Acquired the brand ‘Asmi’ from DTC
Gitanjali Gems - Milestones
Source: Company Presentation
Launched India's first branded
jewellery, ‘Gili’, through Gili
India
Incorporated as a limited company
'Gitanjali Gems Private Limited'
Started operations at the manufacturing unit
in Borivali, Mumbai
Acquired assets of DIT Group S.p.A (DIT)
Italy
Acquired minority stake in Verite, a jewellery
retailer in Japan
Acquired brands ‘Nirvana’ and ‘Viola’
Launched Gitanjaligifts.com, for e -commerce
foray
Formed JV to promote brand 'Nakshtra'
1994
1996
2004
2006
2007
2008
2011
2012
1991
1986
2003
Formed Gitanjali Exports for
polished manufacturing and trading 1966
2
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems - An Integrated Player Across the Value Chain
Sightholder for DTC and
long term relationship with
major global suppliers
Five decades of sourcing
strength and amongst top
diamond companies in India
providing strategic
advantages across costs,
consistency and quality of
supply
Sourcing
Amongst the top jewellery
manufacturers in the world
with capacity of 3mn
pieces p.a.
Strategic manufacturing
locations across India and
China for low cost
production
70 designers across India,
US, Italy and ME for
creating global designs
Most advanced
technologies of CAD and
CAM to manufacture best
of class and high quality
jewellery
Manufacturing
Over 4,000 points of sale
globally in leading
jewellery markets of India,
USA, Japan, Middle East
and China
Multi channel retailing
strategy via own stores,
distribution, franchisee and
shop in shops
Leveraging low cost
distribution model to gain
business insights in newer
markets before launching
own retail network
Retailing
Surat
RAJIV Gems Park
Gemplus II, SEEPZ
E-tailing
India’s leading jewellery etailer
Sales Through TV Channel
Acquired 20% stake in 24 hour
jewellery TV channel in japan with
$100m n diamond jewellery
revenues
Preferred supplier relationship for
the TV channel sales
Tapping Emerging Retail Channels
3
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems - Strategically Present In The Top 5 Global Diamond Jewellery Markets
Middle East
Positioned as leading branded
jeweller from India
Distribution of Indian branded
jewellery to over 50 stores of
Damas, Al-Haseena, Alukkas
India
Pioneers of branded jewellery and
organized jewellery retailing in
India
Pan India presence with over 4,000
points of sale
Japan
Strategic stake in a leading
jewellery retailer with 110 stores in
Japan
20% stake in the largest jewellery
selling TV channel
China
40 SIS in leading departmental
stores under the brand ‘Giantti’
Set up 2 Italian brand stores with
potential to expand European brand
in Chinese market
Europe
5 key Italian brands – Stefan
Hafner, IoSi, Nouvelle Bague,
Porrati and Valente
Access to over 2,000 jewellery
retailers in UK through strategic
acquisition of Alfred Terry
USA
104 retail store chain of Samuels
in the South West
Samules positioned as a top
specialty retailer with focus on
engagement rings and wedding
bands
Leveraging the strong indian
diaspora and appealing to the
locals for its high quality design
4
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
C&P Diamonds
Proportion in revenues has decreased from 80%
at the time of IPO in FY06 to 38% in FY13
Revenues have grown at CAGR of 29% from
FY10 to FY13
Branded Jewellery
Proportion in revenues has been increasing
every year to reach 62% in FY13
Revenues have grown at CAGR of 41% from
FY10 to FY13
Strategic
Shift In
Focus
Revenues
~ INR 16,418 Cr
31%
C&P Diamonds
~ INR 6,211 Cr
14%
Branded Jewellery
~ INR 10,207 Cr
45%
Y-O-Y Growth
Distributors
~ INR 3,958 Cr
Own Stores
~ INR 726 Cr
Franchisee
~ INR 1,630 Cr
SIS
~ INR 895 Cr
Exports
~ INR 3,521 Cr
(10%)
Domestic
~ INR 2,690 Cr
74%
India
~ INR 7,209 Cr
60%
USA Samuels
~ INR 685 Cr
5%
USA Others
~ INR 453 Cr
2%
Middle East
~ INR 900 Cr
39%
Rest of World
~ INR 960 Cr
21%
64%
42%
65%
51%
Gitanjali Gems – Revenue Mix Across Products / Geographies / Distribution Channels
5
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Strong Portfolio Of Well Established Brands
Brand Positioning of Selected Indian Brands
Selected International Brands
Positioned as easy to wear, highly contemporary and
trendy designer brand at competitive price
High end product offering with presence across product
range including bridal jewellery and evening wear
Premium work wear collection to target customers
including those seeking everyday jewellery
Positioned as easy to wear, highly contemporary and
trendy designer brand at competitive price
Offers traditional classic designs to cater to major gold
jewellery buying occasions
5th largest fine jewellery retail chain in USA
Focus on the mid to upper mid segment .
High end luxury brand
Positioned as brand that combines traditional
skills with a fresh and elegant approach
Produces limited edition jewels with very
strong contemporary designs
[xx]
TBD
TBD
Revenue
Trust FY 10 FY 13
Revenue
Consistent
Investment in
Brand Value
Wide Product
Range
Pan India
Presence
After Sales
Service
Brands
1. Tanishq Jewellery
2. Asmi Diamond Jewellery
3. Nakshatra Diamond Jewellery
4. Gili
5. Diya Diamond Jewellery
6. D'damas Jewellery
7. Gitanjali Jewels
8. TBZ
9. Gitanjali Gems Jewellery
10. Sangini Diamond Jewellery
Top brand recall value through consistent association with leading Indian
celebrities
Largest print media advertiser in India across categories
Spent over Rs. 500 Cr in the past 5 years to create consumer desire for
diamond jewellery
Product offerings across price points and segments
Design bank of 0.3mn SKUs, 10,000 active SKUs and 4,000 new active
SKUs added every year
Wide product range providing competitive advantage over unorganized
players
Nationwide presence through multi channel distribution network creating
brand visibility across India
After sales service offerings such as diamond replacement, repair, gold
polishing etc to ensure 100% customer satisfaction post sales
Reputation of most trusted and reliable brand in India
Top 8 brands
out of Top 10
brands
Brands
valued
c.$1bn by an
independent
agency
Building Trust &
Loyal Customer
Base
High repeat sales with 60% of the 2 mn pieces sold annually to existing
customers
Buyback and third party certification services to build trust among
customers and shift customers from unorganized to organized retailing
6
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Brands Present Across Price Points to Capture Market Share
Luxury (Primarily Diamond Jewellery)
Mid (Diamond
& Gold
Jewellery)
Low-end (Gold
Jewellery)
High on Fashion
High on Tradition
Transformed key product brand into independent brand retail chains
Specific design signature for each product brand catering to different
consumer preference
Separate brand manager/sales team for each brand category
Product category positioned to compete with traditional jewellers
Mix of diamond, gold, colored stones and pearls to cater to wide
variety of choice to customers
Offers entry points to tier 2 and tier 3 regions with specific focus on
gold jewellery to cater to local demand
Has significant design, quality and price advantage compared to local
jeweller
Has cost plus selling models catering to the traditional method of
selling that helps in acquiring customer from unorganized sector
Key Characteristics of Brands
7
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Strong PAN India Distribution Network
Growing Own Stores
66 78
90
105 117
165 185
210 233
259
0
50
100
150
200
250
300
50
60
70
80
90
100
110
120
FY09 FY10 FY11 FY12 FY13
Total Area No. of Stores
Started the operations
in [xx]
In short span of [xx] yrs
has grown revenues
from [xx] to [xx]
Leadership position
given very strong brand
recall
Franchisee and Shops-in-Shops
99 138
168 217
274
30 35 42 52 64
160 215
255 319
391 425
470 520
577 643
0
100
200
300
400
500
600
700
0
50
100
150
200
250
300
FY09 FY10 FY11 FY12 FY13
Franchisee Area SIS Area No. of Franchisee No. of SIS
Nationwide presence through multi channel distribution network of
distributors, own stores, franchisee and shop in shops
More than 4,000 sale points with c. 260 own stores makes Gitanjali as the
leading branded jewellery retailer in India
Focus on growth through franchise model well supported by flagship stores to
support premium brand positioning
Plans to penetrate Tier 2 and Tier 3 markets in India primarily through
franchisee route
(Sqft 000s) (Sqft 000s) (No. of Stores) (No. of Stores)
Distribution of Stores Across India
Presence in India
Top 10 States % Stores
Maharashtra 26.1%
Karnataka 11.5%
Delhi 9.6%
West Bengal 6.8%
Uttar Pradesh 6.8%
Andhra Pradesh 6.6%
Gujarat 4.9%
Haryana 4.1%
Madhya Pradesh 3.5%
Punjab 3.5%
Total 83.5%
8
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – History of Highly Successful Acquisitions Across the Globe
Acquired in 2006 for $45mn with an aim to convert the
entire purchases in-house
Turned around the retail chain in 2011, achieved
synergies due to inhouse sourcing and cost optimisation
Nakshtara and Asmi acquired in 2007 and 2008
Operations were smoothly integrated given that brands were operated by Gitanjali in B2B
formats through distribution
Post acquisition revenue of both brands has grown from $20mn in FY06 to $200mn in
FY13by marketing the brands across own stores, franchisees & SIS
Acquired jewellery brands Nirvana and Viola in 2012 to expand its retail network and
increase its market share in the organized retail space
Acquired assets of DIT group in a liquidation process in Italy in 2011
─ Paid c.$10mn on asset based valuation wherein acquired inventory of gold & diamond of
c.$13mn
─ Ownership of popular brands like Stefan Hafner, IOSI, Porrati and Valente
Rationale is to create a bouquet of international brands in RoW and use the distribution
strength to sell Indian brands
Similarly, Indian market moving towards higher luxury brands where these brands are well
positioned
Acquired a minority stake in Verite in 2012 to become a
preferred supplier and gain access to a network of 110
jewellery retail stores
Acquired minority 20% stake in the largest jewellery
selling TV channel to become a preferred supplier in one
of the largest jewellery markets in the world
Acquired Alfred Terry in December 2011 which was
producing innovative diamond jewellery for over 100
years
Has distribution tie ups with over c.2,000 jewellery stores
across Europe
US Japan UK
Italy India
9
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
One of the largest and the fastest growing jewellery markets with similar jewellery tastes, price points and other
cultural aspects as India
Indian brand ambassadors of Gitanjali are extremely popular in the region leading to immediate connect with locals
and large Indian diaspora
Large presence in the region through renowned retail chains like Damas, Alukkas and Al-Haseena offering deep
insight and knowledge for expanding own retail chains
Middle East
Japan is one of the largest diamond jewellery market and provides excellent margins to integrated players. Large
existing proven distribution network in Japan combined with low cost manufacturing capabilities will enable the
next phase of expansion
Existing bouquet of Italian and other international brands helping Gitanjali to aggressively expand in China
Presence in Europe through own design center and distribution presence through well known Italian brands helping
in better understanding of global designs and consumer trends
Rest of World
US being the largest diamond jewellery market with superior margins, is one of the most ambitious markets for
Gitanjali
Existing presence under the brand name Samuels and Rogers (leading retail jewellery chains) with focus on
engagement and wedding bands (price band of US$600)
Integrated business model with strong sourcing, low cost manufacturing capabilities and well established retail
presence has been contributing to increasing market share and profitability
USA
Gitanjali Gems – Significant Presence In World’s Leading Jewellery Markets
10
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Business Mix Changing towards High Margin Segments
Revenue has increased from
INR 6,527 Cr to INR 16,418 Cr at a
CAGR of 36% from FY10 – FY 13
EBITDA has increased from
INR 440 Cr to INR 1,048 Cr at a
CAGR of 34% whereas Net Income1
has increased from INR 202 Cr to
INR 595 Cr at a CAGR of 43% from
FY10 – FY13
Operating margins have been
increasing over the years though the
marginal drop in EBITDA margins
is due to changing mix of revenues
from sale of diamond jewellery to
gold jewellery
Branded jewellery segment revenues
as a % of total revenues have
increased from 56% in FY10 to 62%
in FY13
Within the branded jewellery
segment, India is the highest
contributor with c. 71% revenue
share
Of the domestic revenues in India,
revenue mix of high margin
franchisee model has increased from
12% to 23% in the last 3 years
Revenue, EBITDA & Net Income Margins Shifting from Non Branded to Branded Jewellery
Geographical Mix of the Branded Jewellery
C&P
Diamond
38%
Intl
Branded
18%
Domestic
Branded
44%
6,527
9,377
12,498
16,418
6.7%
5.8%
6.5%
6.4%
3.1%
3.8% 3.9% 3.6%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
2010 2011 2012 2013Revenue EBITDA % Net Income %
INR cr
C&P
Diamond
44%
Intl
Branded
27%
Domestic
Branded
29%
FY 2010 FY 2013
FY 2010 FY 2013
FY 2013 Operating Margin
Distributors 8.5%
Franchisees 11.3%
Own Stores 10.4%
Shop-in-Shops 9.5%
FY 2013 Operating Margin
Cut & Polish Diamond 2.3%
Intl Branded 7.7%
Domestic Branded 9.3%
68% 55%
10%
10%
12% 23%
10% 12%
0%
20%
40%
60%
80%
100%
FY2010 FY2013
Shop-in-Shops
Franchisees
Own Stores
Distributors
Franchisee
share almost
doubled
Revenue CAGR : 36%
India
71%
US Samuels
7%
US Others
4%
Middle East
9%
Rest of World
9%
(1): Net Income before minority interest
11
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Region
% Total
Jewellery
Contribution
RoCE EBITDA % Margin Revenue
10% 9%
India 51% 71%
12% 4%
17% 7%
10% 9%
FY 2010 FY 2013
US Samuels
US Others
Middle East
Rest Of World
Gitanjali Gems - Geographical Analysis of Branded Jewellery
1,857
7,209
0
4,000
8,000
640 685
550
600
650
700
420
453
400
420
440
460
371
900
0
500
1,000
378
960
0
500
1,000
1,500
Revenue (INR Cr)
Revenue (INR Cr)
Revenue (INR Cr)
Revenue (INR Cr)
Revenue (INR Cr)
10.5% 9.3%
5%
10%
15%
6.6%
5.8%
5%
6%
7%
5.0%
6.6%
0%
4%
8%
5.8%
8.9%
0%
5%
10%
7.0%
8.3%
6%
8%
10%
39.0% 32.0%
0%
25%
50%
9.1% 7.4%
0%
5%
10%
8.4% 8.0%
7%
8%
9%
17.1%
28.3%
0%
10%
20%
30%
FY 2010 FY 2013 FY 2010 FY 2013 FY 2010 FY 2013
(1) ME and ROW RoCE is for Diamond Jewellery
12
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
EBITDA Breakup
FY10
India Gold Jewellery
(IGJ)
INR 24 Cr
India Diamond
Jewellery
(IDJ)
INR 172 Cr
International
Jewellery (Int. J)
Rs. 109 Cr
C&P Diamonds
INR 135 Cr
EBITDA Breakup
FY13
India Gold
Jewellery
INR 157 Cr
India Diamond
Jewellery
INR 515 Cr
International
Jewellery
INR 230 Cr
C&P Diamonds
INR 146 Cr
FY10 EBITDA
INR 440 Cr
FY13 EBITDA
INR 1,048 Cr
Int. J
19.9%
IGJ
21.9%
IDJ
56.4%
LD
1.8%
Gitanjali Gems – EBITDA Growth Drivers
Contribution to FY10-FY13 EBITDA Growth
Branded jewellery business has been the key EBITDA growth driver for Gitanjali
− Indian jewellery contributed 78.3% of the EBITDA growth from FY10 to FY13
− Within India, diamond jewellery has contributed significantly to the growth
− International jewellery has also been a key EBITDA growth driver contributing
19.9% of the EBITDA growth from FY10 to FY13
Trends highlight shift from C&P diamond to branded jewellery with wide retail and
other distribution network across India and international markets
13
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Improving Business Mix Leading to Significant Improvement in RoCE and
Leverage Ratios
Return on Capital Employed (RoCE) Net Working Capital / Sales
Net Debt / EBITDA & Net Debt / Equity
11% 12%
14%
15%
10%
11%
12%
13%
14%
15%
FY10 FY11 FY12 FY13
Gitanjali Gems
60%
49% 46%
44%
30%
35%
40%
45%
50%
55%
60%
65%
FY10 FY11 FY12 FY13
Gitanjali Gems
5.4x 5.0x
4.1x 4.1x
1.0x 1.0x 1.0x 1.1x
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
FY10 FY11 FY12 FY13
Net Debt / EBITDA Net Debt / Equity
(Gross Debt – Liquid Inventory) / Equity
0.2x
0.1x 0.1x
0.3x
0.0x
0.1x
0.2x
0.3x
FY10 FY11 FY12 FY13
Gitanjali Gems
Consistent improvement in RoCE over the last 3 years; Net Debt / Equity is consistently in the range of 1.0x
RoCE: Operating Profit / Net Working Capital
14
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Significant Opportunity to Unlock Value
Some of the core investments accounted at book value have appreciated significantly over the years
Currently in the process of unlocking value of historical investments that would generate incremental cash-flows in
the medium term
Land and Building
Inventory Value
Inventory of c.$800mn as of March 31, 2013 mainly consisting of diamond and gold valued at cost
Market value of the inventory significantly higher than the current book value
Unlike other traditional industries, inventory is highly liquid and monetization is possible in a short timeframe
Plus with labor forming less than 5% of the total cost of a finished jewellery, any non-moving inventory can be
recycled without any loss
Brands
Nine brands including Gitanjali, Gili, Nakshatra, Asmi, D’ Damas, Gitanjali Jewels, Maya Gold, Gitanjali Lifestyle
and Shuddhi valued at c.$1bn by a leading UK based agency
Samuels is amongst the leading specialty jewellery retail chain in the US
Brand building expenses incurred annually are not capitalized
None of the brands have been pledged with any lender
15
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Highly Diversified Board With Proven Corporate Governance Track Record
Board Directors Brief Profile
Mehul Choksi
Chairman
Chairman & Managing Director of the Group
Received many awards and recognition for his entrepreneurship and innovation.
Nominated for “E&Y Entrepreneur of the Year” award (2008)
Sunil Varma
Whole-time Director
Joined the group in 2009
Previously worked with Gemsiam Manufacturing in the finance and operations department
Holds CA, CPA, CFA and MBA
Dhanesh Sheth
Non-Executive Director
Advises company on marketing operations, buying and selling of rough diamonds and other aspects of business development
Joined the board in 1990
Nehal Modi
Non-Executive Director
Has been instrumental in the company’s growth in the USA since 2001
Has been on the board since 2009
Holds a bachelor’s degree in arts (finance and marketing) from Boston University
Sujal Shah
Independent Director
Presently the owner of a SSPA & Co., a chartered accountancy firm
Areas of practice are M&A, restructuring, valuation and due diligence of companies
Has been on the board since 2005
S. Krishnan
Independent Director
Has vast experience in banking, fund management and capital market operations
Held top-level management positions at TAIB Securities, Everest Fund, Aldercrest Trading Limited and First Bank
Has been on the board since 2005
Nitin Potdar
Independent Director
Currently partner at J. Sagar Associates, a leading law firm in India
Specialises in mergers and acquisitions, restructuring of business, asset and share purchase deals, joint ventures and strategic
alliances, domestic and international capital markets, private equity and general corporate advisory
M.S. Sundararajan
Independent Director
Leading banking consultant and economist, part of the visiting faculty at various institutes and was previously the chairman and
managing director of Indian Bank
High Standards of Corporate Governance
1. No major related party transactions
2. No other business interest outside the listed entity by the promoter family
3. Run by a highly professional management team
4. No major litigation or customer or investor complaints pending
16
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Strong Management Team With Significant Industry Expertise
Name and Role/
Designation Brief Profile
Nishit Mehta
Group President
Joined the Group in 2005
Possesses experience in managing international business in corporate houses
Has been instrumental in establishing the international business of the group
Abhishek Gupta
President
Joined the group in 2008
Heads strategy and business development for the group
Previously worked with JPMorgan Chase and CapGemini
MBA in finance
Kapil Khandelwal
Group CFO
Joined the Group in 2010
Core expertise of financial control, banking, fund raising, M&A and costing
Chartered Accountant and ICWA by qualification
Vijay Agarwal
Vice President and
Head – Secretarial
and Legal
23 years of expertise in legal and secretarial functions such as mergers, restructurings, public issues, private
placement of various securities, joint ventures and intellectual property
Holds a bachelor’s degree in law and is a qualified company secretary
Santosh Srivastava
Head - GJRPL
Joined the Group in 2008 managing the Indian franchisee expansion
Has previous experience of working with the Tata group
Pankhuri Warange
Company Secretary
Responsible for secretarial compliances of the Company
Has over nine years of experience as a company secretary
Holds a bachelor’s degree in law and arts
17
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Strategic Shift from
C&P Diamonds to
Jewellery
Continuous shift from “C&P Diamonds” to “ Branded Jewellery” to cater to the shifting
consumer preference of buying branded jewellery
Advantages of an integrated play, working capital efficiency and consequently higher return
on capital employed
1
Gitanjali Gems - Actionable Future Business Strategy
Comprehensive Mix of
Channels & Categories
Provide wide selection of jewellery across various categories including diamond, gold and
other precious stones
Build a wide distribution across various channels including own stores, 3rd party distribution,
franchisee and shop-in-shops
2
Capturing New
Markets with an
Efficient Distribution
Model
Extending presence in Tier 2 and Tier 3 urban and semi-urban regions to capture the growing
demand and structural shift from unorganized to organized retailing
Entering new markets through asset light franchisee route; thereby de-risking capital and
improving margins
3
International
Expansion
Tapping international markets by leveraging low cost production and high quality
international design capabilities to cater to global consumers
Focus on capturing the growing demand in the top 5 largest jewellery markets globally by
size as well as growth
4
Retail Expansion
Capitalize the in-depth market understanding developed through strong global distribution
network over the years that has helped in creating an efficient retail network
Leverage the above expertise in expanding various retail formats across India and overseas
5
18
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Gitanjali Gems – Implications of the Recent changes in RBI Policy on Gold Loan
Recent RBI policy has prohibited any form of credit on gold imports meant for domestic consumption
− Earlier companies were able to get gold from banks with a 20% margin upfront and also had a window of 6 months to
finalize the price
− Now, companies would have to make 100% payment upfront for the imported gold used for domestic consumption
− The implication of the policy is restricted only to domestic gold jewellery sale and has no impact on domestic diamond
jewellery sale or exports (diamond as well as gold)
Unlike other Indian jewellery companies, Gitanjali is primarily focused on the diamond segment where there are no
changes in the regulatory policy
Inventory required for meeting the domestic gold jewellery revenues is therefore not significant and Gitanjali would be
able to fund the remaining capital required through internal accruals, debt or equity as required
With the revised gold loan policy which requires 100% margin against gold loans, Gitanjali also plans to lessen its
dependence on domestic gold jewellery until the regulatory uncertainty is eliminated thereby reducing its dependence on
gold loan
Separately, in order to hedge the price risk which was earlier available through gold loan, Gitanjali is considering buying
physical gold and simultaneously selling forward contracts thereby completely negating any risk due to price fluctuation
The implication of the drop in gold jewellery revenues will have a very marginal impact on operating profits given
relatively lower margins in gold jewellery as compared to diamond jewllery (key focus area for Gitanjali)
19
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Historical Performance – INCOME STATEMENT (CONSOLIDATED)
Particulars FY13 (Audited) FY 12 (Audited) FY 11 (Audited) FY 10 (Audited)
(INR Cr.)
Total Total Total Total
Revenues 16,418.0 12,498.1 9,377.2 6,527.0
Raw material cost 14,116.0 10,671.8 7,992.9 5,525.0
Gross Profit 2,302.1 1,826.4 1,384.4 1,002.0
Operating expenses 1,254.4 1,018.8 844.9 562.4
EBITDA 1,047.7 807.6 539.5 439.6
EBITDA margin (%)
6.4% 6.5% 5.8% 6.7%
Depreciation 36.6 29.5 56.4 44.5
EBIT 1,011.1 778.1 483.1 395.1
EBIT margin (%) 6.2% 6.2% 5.2% 6.1%
Finance Costs 461.3 407.7 221.8 172.4
Other Income 70.8 148.1 103.7 2.6
Exceptional items 0.1 5.1 18.0 0.0
PBT 620.7 523.6 383.0 225.2
PBT Margins (%)
3.8% 4.2% 4.1% 3.5%
Tax 25.5 32.3 26.7 23.2
PAT1 595.2 491.3 356.3 202.0
PAT Margins (%)
3.6% 3.9% 3.8% 3.1%
(1): PAT before minority interest
21
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Historical Performance – BALANCE SHEET (Consolidated)
Particulars FY 13 (Audited) FY 12 (Audited) FY 11 (Audited) FY 10 (Audited)
(INR Cr.) Total Total Total Total
Net operating working capital
Inventories 4,347.3 3,693.6 2,901.3 2,079.1
Inventory days (of COGS) 111 125 131 135
Receivables 7,189.2 5,384.9 4,019.5 3,231.0
Days Receivable (of Sales) 158 155 154 178
Trade Payables and Creditors (4,338.2) (3,292.0) (2,200.1) (1,294.5)
Days Payable (of COGS) (111) (111) (99) (84)
Debt Facility
Long Term Borrowings 687.9 661.2 226.0 506.8
Short Term Borrowings 4,617.4 3,300.0 2,901.3 2,088.0
Gross debt (A) 5,305.3 3,961.1 3,127.4 2,594.8
Cash and cash equivalents (B) 978.4 660.9 443.7 241.7
Net debt (A-B) 4,326.9 3,300.2 2,683.6 2,353.1
Shareholders Equity + Minority Interest 3,832.5 3,168.3 2,579.9 2,244.8
Net debt / Equity ratio 1.13 1.04 1.04 1.05
22
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Disclaimer
This presentation and the accompanying slides (the “Presentation”), which have been prepared by Gitanjali Gems Limited (the “Company”), have been prepared
solely for information purposes and do not constitute any offer, recommendation or invitation to purchase or subscribe for any securities, and shall not form the basis
or be relied on in connection with any contract or binding commitment whatsoever. No offering of securities of the Company will be made except by means of a statutory
offering document containing detailed information about the Company.
This Presentation has been prepared by the Company based on information and data which the Company considers reliable, but the Company makes no representation
or warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this
Presentation. This Presentation may not be all inclusive and may not contain all of the information that you may consider material. Any liability in respect of the contents
of, or any omission from, this Presentation is expressly excluded.
Certain matters discussed in this Presentation may contain statements regarding the Company’s market opportunity and business prospects that are individually and
collectively forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks,
uncertainties and assumptions that are difficult to predict. These risks and uncertainties include, but are not limited to, the performance of the Indian economy and of the
economies of various international markets, the performance of the gems and jewellery industry in India and world-wide, competition, the company’s ability to
successfully implement its strategy, the Company’s future levels of growth and expansion, technological implementation, changes and advancements, changes in revenue,
income or cash flows, the Company’s market preferences and its exposure to market risks, as well as other risks. The Company’s actual results, levels of activity,
performance or achievements could differ materially and adversely from results expressed in or implied by this Presentation. The Company assumes no obligation to
update any forward-looking information contained in this Presentation. Any forward-looking statements and projections made by third parties included in this
Presentation are not adopted by the Company and the Company is not responsible for such third party statements and projections.
The distribution of this document in certain jurisdictions may be restricted by law and persons into whose possession this presentation comes should inform themselves
about and observe any such restrictions.
23
R 221
G 209
B 205
R 87
G 35
B 22
R 248
G 219
B 145
R 158
G 122
B 111
R 165
G 165
B 165
R 216
G 216
B 216
R 252
G 238
B 204
R 242
G 189
B 53
Thank you
Corporate Office:
3,B Wing, 3rd Floor, Laxmi Towers.
Bandra Kurla Complex.
Mumbai 400 051.
India
Investor contact:
24