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Gitanjali Gems - Investment Rationale
Gitanjali Gems is India’s largest diamond jewellery retailer. It has
strong portfolio of brands and is known for its leading brands like Gili,
D’ Damas, Nakshatra, Asmi and Sangini.
Gitanjali is the major contributor to this growing retail business as
~60% of the organized mall space belongs to Gitanjali and 50-60% of
advertisement is again spent by Gitanjali on pan India level. Its
mainly distributor channels are exclusive distributor network,
franchise partners, large jewellery stores, shopping malls and retail
stores managed and owned by Gitanjali themselves.
Gitanjali Infratech (6,30,000 sq ft facilities at Borivali and Andheri in
Mumbai and Hyderabad in AP) will unlock values from opportunistic
investments in Infratech in the FY 10-11 and continue to expand in
next 3 years. (45% flats already sold in Borivali projects)
The company is on expansion spree as it proposes to double its
existing domestic diamond jewellery production capacity of 50,000
pieces a month in the six months. It will also expand capacity of gold
jewellery production in Kolkata and Coimbatore.
Company has posted fantastic Q3 results with 46% increase in top line
and 155% increase in bottom line. Margin expansion is also seen in the
diamond segment on industry recovery. With reducing inventory,
improving working capital scenario and the growing demand the
future outlook for the company looks attractive.
The company is expecting the Conversion of FCCB’s in Nov’2011@ Rs.
220.
Risks
There is a large presence of unorganized sector in this industry.
Technical Comments
The stock has made flag formation on daily charts and trading with
heavy volumes. The stock has given breakout after consolidating in
last 8 weeks and now trading above short term moving averages.
The stock if it sustains the current levels then the pattern shows
that there is around 15 % upside possible in coming days. One can
initiate long position with stop of 220 for the target of 259.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Gitanjali Gems - Investment Rationale
Gitanjali Gems is India’s largest diamond jewellery retailer. It has
strong portfolio of brands and is known for its leading brands like Gili,
D’ Damas, Nakshatra, Asmi and Sangini.
Gitanjali is the major contributor to this growing retail business as
~60% of the organized mall space belongs to Gitanjali and 50-60% of
advertisement is again spent by Gitanjali on pan India level. Its
mainly distributor channels are exclusive distributor network,
franchise partners, large jewellery stores, shopping malls and retail
stores managed and owned by Gitanjali themselves.
Gitanjali Infratech (6,30,000 sq ft facilities at Borivali and Andheri in
Mumbai and Hyderabad in AP) will unlock values from opportunistic
investments in Infratech in the FY 10-11 and continue to expand in
next 3 years. (45% flats already sold in Borivali projects)
The company is on expansion spree as it proposes to double its
existing domestic diamond jewellery production capacity of 50,000
pieces a month in the six months. It will also expand capacity of gold
jewellery production in Kolkata and Coimbatore.
Company has posted fantastic Q3 results with 46% increase in top line
and 155% increase in bottom line. Margin expansion is also seen in the
diamond segment on industry recovery. With reducing inventory,
improving working capital scenario and the growing demand the
future outlook for the company looks attractive.
The company is expecting the Conversion of FCCB’s in Nov’2011@ Rs.
220.
Risks
There is a large presence of unorganized sector in this industry.
Technical Comments
The stock has made flag formation on daily charts and trading with
heavy volumes. The stock has given breakout after consolidating in
last 8 weeks and now trading above short term moving averages.
The stock if it sustains the current levels then the pattern shows
that there is around 15 % upside possible in coming days. One can
initiate long position with stop of 220 for the target of 259.
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