| Date: |
21-07-2015 |
| Subject: |
Why Rajesh Exports Shares Are Up 150% in One Year |
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Rajesh Exports, which manufactures and exports gold and studded diamond jewellery, has outperformed both its peers and broader markets to emerge as a "star" stock. Shares in the company are up over 150 per cent year-to-date as compared to nearly 13 per cent gain in the blue chip Nifty index. It has also outperformed its peers - Titan (up 5 per cent year-to-date) and TBZ (down 15 per cent).
2014-15 was a strong year for Rajesh Exports, with revenues rising 73 per cent to Rs 50,463 crore and net profit witnessing a growth of 82 per cent to Rs 655 crore.
The rally in Rajesh Exports has come in the backdrop of falling gold prices and sluggish jewellery sales in India, which makes its performance even more notable.
The main driver of the company's revenue is jewellery exports. Export segment of the company is witnessing robust growth. On July 10, the company informed the exchanges that it had bagged export orders worth Rs 1,448 crore for designer range of gold and diamond studded jewellery from UAE.
Chairman Rajesh Mehta said these types of orders have higher margins and will increase the overall profitability of the company.
According to Mr Mehta, 95 per cent of the company's revenue comes from jewellery exports and only 5 per cent of the total revenue comes from jewellery retailing. So a slowdown in retail jewellery sales has not affected the overall revenue of the company, he added.
Mr Mehta expects the company's revenue from the retail segment to grow by 10 per cent in the current fiscal year. "We are a different kind of retailer, we are a fully integrated retailer; from mines to retail our presence is there. What we offer to clients will be difficult for any other jeweller to offer to the client," said Mr Mehta.
Rajesh Exports runs its retail jewellery chain in the name of "Subh Jewellers" and has 83 retail jewellery showrooms across the country.
The company is also looking to spread its wings to overseas by doing acquisition. Mr Mehta said the board of directors of the company has already approved a proposal to make acquisition in Europe for about $250-$500 million.
Mr Mehta said to grow further from this stage, the company needs to do backward integration, "We are thinking of acquiring either a mining company or a refining company so that it can add to our top line and bottom line."
Rajesh Exports shares traded 2 per cent higher at Rs 456 apiece, outperforming the broader Nifty, which traded lower.
Source : profit.ndtv.com
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