Tribhovandas Bhimji Zaveri reports five-fold jump in profit in June quarter

BENGALURU (Reuters) – Indian jeweller Tribhovandas Bhimji Zaveri reported a nearly five-fold jump in first-quarter profit on Tuesday, as higher margins from premium pricing and lower expenses banded together to make up for its first revenue fall in 10 quarters.

The company said its consolidated net profit rose to 113.7 million Indian rupees ($1.38 million) for the quarter ended June 30, from 24.4 million rupees a year earlier.

It had posted a more than three-fold jump in profit in the January-March quarter.

The Mumbai-based jeweller’s total revenue slid marginally this quarter by 1.6% to 5.71 billion rupees. Revenue had last slid 3.3% in the quarter ended Dec 31, 2020.

However, the company’s total expenses fell 3.7% as the cost of materials consumed – which forms more than 50% of the total expenses – fell 5.6%.

Demand for gold remained strong in the quarter, especially around the Akshaya Tritiya festival in April, considered auspicious for gold investments and after the Reserve Bank of India decided to withdraw 2,000-rupee notes.

This led to jewellers charging a premium for the yellow metal during most of the quarter, driving their margins higher.

Tribhovandas’s margins for earnings before interest, tax, depreciation and amortisation (EBITDA) surged to 5.65% from 3.22% a year earlier, helped by strong pricing.

Rival Titan Co reported last month that its jewellery division grew 21% during the quarter, while Kalyan Jewellers India and PC Jeweller are yet to report quarterly results.

Shares of Tribhovandas closed 2.88% higher at 92.80 rupees ahead of the results.

($1 = 82.3080 Indian rupees)

 

(Reporting by Aleef Jahan and Ashish Chandra in Bengaluru; Editing by Janane Venkatraman)