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Goldiam International Limited Q4 FY24 Earnings Conference Call Summary
Key Highlights • Date of Call: May 23, 2024 • Overall Growth: • 13% annual growth • 10% quarterly growth • Financial Performance: • Revenue: INR 1,513 million (12% YoY increase) • EBITDA: INR 274 million (21% increase) • Lab-Grown Diamonds: • Account for 49% of total sales • Strong demand, especially in the U.S. market
Future Plans • Retail Operations: • Launch of ERA brand for lab-grown diamonds in FY25 • Targeting major cities: Mumbai, Bangalore, Delhi NCR • New Product Lines: • Ira Retail brand for modern non-wedding jewelry
Market Insights • Price Stability: • B2B prices stable; no significant declines expected • Ongoing demand for lab-grown diamonds noted • Order Mix: • 10-12% of new orders from new customers • 65% of new orders are lab-grown diamonds
Competitive Landscape • Market Position: • Established presence mitigates competitive risks • Plans to scale retail operations significantly in 5-7 years • Distribution Model: • Operates as an OEM jewelry manufacturer • Significant growth in LGD sales in the U.S.
Financial Guidance • EBITDA Margins: Targeting 20-21% • Break-even Sales for ERA: INR 30-35 lakhs monthly
Challenges and Opportunities • Capacity Constraints: No need for additional investment in production capacity • Entry of Traditional Retailers: Could validate lab-grown diamonds and ease consumer education
Strategic Goals • Store Expansion: Aim to open 15 stores in 2025 • Consumer Policies: Plans for a return and exchange policy to enhance customer experience
Conclusion • Management expressed gratitude and optimism for future growth and interactions.
Conference Call Overview • Date: November 10, 2023 • Submitted transcript to BSE and NSE on November 13, 2023 • Key participants: Executive Chairman Rashesh Bhansali, Managing Director Anmol Bhansali
Company Performance • Resilience amid challenging U.S. market conditions • Significant growth in lab-grown jewelry division (34-35% of revenue, up from 19%) • Strong order book of INR 165 crores • Recommended 60% interim dividend
Market Challenges • Decline in bridal sales due to high mortgage and interest rates affecting consumer spending • Anticipated heavy discounts during the holiday season to clear inventory
Strategic Initiatives • Considering test launch of physical stores in India • Focus on high-quality designs and omnichannel sales • Exploring new markets and product categories, including high-end fashion jewelry
Financial Insights • EBITDA margins expected to range between 20% to 25% • Lab-grown diamonds anticipated to maintain better margins than natural diamonds • Current inventory management impacted by falling LGD prices
Competitive Landscape • Integrated approach from production to sales helps maintain stable margins • Strong distribution networks and efficient production processes as competitive advantages • Major U.S. retailers contribute 50-55% of overall revenue
Market Overview • U.S. jewelry market estimated at $65-$70 billion annually • Bridal jewelry accounts for approximately 50% of sales • Expected market growth rate of 3-4%
Future Outlook • Optimism for double-digit growth in lab-grown diamond sales year-over-year • Plans to start operations in India by 2024 • Continued focus on expanding relationships with existing partners, such as the Signet Group in the UK
Conclusion • Bhansali expressed confidence in Goldiam's future growth and thanked participants for their engagement.
Conference Call Overview • Date: June 3, 2023 • Focus: Q4 FY 2022-23 earnings and operational performance • Challenges: High inflation and interest rates in the U.S. affecting consumer spending
Financial Performance • Gross Margin: Increased to 36% • EBITDA Margin: Healthy at 22.5% • Sales Mix: 23% from lab-grown diamonds • Strong digital business and healthy balance sheet
Consumer Trends • Shift towards lab-grown diamonds due to affordability • Price erosion noted in the lab-grown segment
Management Insights • Competitive Landscape: • Price erosion of around 30% in South Gujarat • Importance of distribution emphasized • Operating Expenses: • Increase noted; further clarification promised • Demand Outlook: • Expectation of improved margins and stronger order book for the holiday season • Indian Market: • Targeting mid-market segments for lab-grown jewelry • Geopolitical issues affecting natural diamond availability
Future Growth Strategies • Potential retail operations in India discussed • Expansion into new markets like UAE and Australia acknowledged • Focus on deepening relationships with key retailers rather than increasing the number of partners
Inventory Management • Expectation to normalize inventory levels to 2-3 months • Current increase attributed to lab-grown diamond growth and higher ticket sizes
Jewel Fleet Initiative • Collaboration with a wholesaler to enhance distribution for independent jewelers • Focus on using the website as a sales tool
E-commerce and Sales • Significant growth in online sales post-COVID • 74% of sales currently offline, with all online sales through retailer websites
Clarifications and Additional Insights • Gross vs. EBITDA margins similar across channels • SEZ status protects against government duty reductions on diamond seeds • Buyback price determined by market conditions and company strategy
Conclusion • Call concluded with thanks and invitation for further inquiries.