GOLDIAM reports H1FY23 numbers, benefits of integration bring in improvement in profitability

• EBITDA remains flat YoY at ₹622mn for H1FY23; Margin improved by 722bps YoY to highest-ever level of 26.6% due to better product mix & inventory gains
• Cash and Cash equivalents as of H1FY23 remains healthy at ₹1,740mn

MUMBAI, India, Nov. 11, 2022 /PRNewswire/ —  Goldiam International Ltd. (Goldiam), an integrated manufacturer and supplier of fine diamond jewellery to leading retailers and wholesalers in the USA, has announced its results for the second quarter and half year ended on September 30, 2022.

FY23 began with a cautiously optimistic note for the Company on the back of record-breaking inflation in major economies like the USA. High Inflationary scenarios in these economies lead to the postponement of discretionary spending by the consumers and subsequently by the retail customers. The Company has been well prepared for this scenario and strengthened its margin profile to protect the profitability of overall business.

Company’s EBITDA margins for H1FY23 stood at 26.6% higher by 722bps YoY; for Q2FY23 margins stood at 32.5% higher by 1514bps YoY. For H1FY23, Company remained focussed on profitability, by further improving product mix favouring lab-grown diamonds, and by paring down inventory in-stock. The Company maintained its strategy and further strengthened its Lab-grown offerings on all fronts right from designing to rapid deliveries. Integrated operations on Lab-grown diamonds front aided the Company in such inflationary scenario. Thus, on an overall basis, vigilance and integration had a significant contribution to the Company’s resilient performance in H1FY23 vis-a-vis H1FY22.  

Financial Highlights (Consolidated) – Q2 & H1 FY23

 

• Consolidated Revenue during H1FY23 stood at ₹2,338 mn, which was 29% lower YoY. This was an unavoidable impact due to the higher inflationary scenario in the US. Discretionary and wedding spendings are generally impacted due to such inflationary scenarios, as the end customer is impacted by higher housing, fuel & general costs. However, the Company believes this to be transitionary in nature and demand should return back on better macro-economic conditions going ahead. The Company’s Lab-grown offerings, which are sold at a discount to natural diamonds, would be great beneficiary in such an inflationary scenario.
• Consolidated EBITDA for H1FY23 remained flat at ₹622 mn YoY, despite a fall in Revenue. EBITDA margins witnessed tremendous growth in Q2FY23 and improved by 1,514 bps YoY to 33% and in H1FY23 improved by 722bps YoY to 27%. This is the highest-ever margins recorded for H1 by the Company. Goldiam’s integrated operations, increasing & rapid industry movement to lab-grown diamonds have helped their margin profile. The Company has also successfully been able to pass on price increases to its clients as of the current date, further improving inventory gains on certain segments.

Lab-Grown Diamond & Jewellery business-enhancing overall margin profile: Against 15-20% share in FY22, the share of Lab-grown has been consolidating to 25% since the beginning of FY23. This share is expected to improve further as market for Lab-Grown diamonds is expected to grow at a faster rate. 

Along with a focus on larger carat diamonds, the Company has focused on integrating these diamonds into its jewellery distribution, thereby securing captive consumption in a rapidly growing industry segment. This also allows Goldiam to enhance offerings as larger cartage of diamonds plays within the premium to super premium bridal category.

Order Book Status ensures Revenue visibility: Goldiam has an order book size of ₹1,500 mn. This order book is expected to be executed in the next four-six months. E-Commerce sales are not part of the order book, given their nature of being booked online (on a spot basis).

Mr. Rashesh Bhansali, Executive Chairman of Goldiam International, commenting on the performance, said, “FY23 started with a global inflationary scenario with various central banks increasing interest rates. This created caution for discretionary spending for weddings, gifts etc. However, the Company was well-prepared for this situation and adjusted its product offerings accordingly. Our investment in Lab-grown diamond facilities continues to reap fundamental benefits. Being a completely integrated player, right from growing diamonds, listing online and delivering it, we have gathered a lot of inherent benefits that makes us highly margin resilient. Our sell down of inventory for natural diamonds has also been beneficial in protecting the overall profitability for the Company, despite such a volatile economic scenario.

The journey of Lab-grown has been accomplishing new milestones for the Company and provides an exciting headroom to grow from hereon. Awareness among domestic consumers is rising for Lab-grown diamond jewellery, and management is evaluating various omnichannel strategies to make an early breakthrough in the domestic market.

With an increasing demand for Lab-Grown Diamonds, Goldiam had carried out a CAPEX to increase its capacity by 40% in FY22. We further expect to double our capacities over FY23 and FY24. The new capacity will be used for Goldiam’s jewellery manufacturing and distribution business, leading to a more robust margin profile. We are confident about the Lab-Grown diamonds business going ahead. This has been further cherry-topped with our omnichannel delivery strategy, making our model even more lucrative for our customers.”

About Goldiam

Goldiam International Limited (NSE: GOLDIAM) (BSE: 526729) is a 3-decade-old preferred OEM partner and exporter of exquisitely designed and luxurious diamond jewellery. Functioning as the manufacturer of choice to many of the leading global branded retailers, departmental stores and wholesalers across American markets, the Company is also renowned for utilising responsibly sourced diamonds, leveraging cutting-edge technologies and efficient manufacturing processes for optimal costings and quick delivery lead times. Targeting the mid-to-affordable diamond & bridal jewellery segments, Goldiam has a dedicated sales office in New York, with design teams in both India and the USA.

Forward-Looking Statement:

Certain statements in this document may be forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties like regulatory changes, local political or economic developments, technological risks, and many other factors that could cause our actual results to differ materially from those contemplated by the relevant forward-looking statements. Goldiam International Limited will not be in any way responsible for any action taken based on such statements and undertakes no obligation to publicly update these forward-looking statements to reflect subsequent events or circumstances.

 

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