Transcript Shree Ganesh Jewellery House Limited

Shree Ganesh Jewellery House Limited
July 2010
Agenda
 Industry Overview
 Company Overview
 Financial Highlights
 Robust Business Model
 Investment Highlights
2
Gems & Jewellery Industry
1.
The Industry exported goods worth US$ 21.23 bn constituting
12.52% of India’s Exports (FY 09)

2.
Sr.
Category
Sub-category
1.
Gemstones
Diamonds
Though Diamonds form a major portion of G&J Exports, Gold jewellery
exports were the primary drivers of industry growth in FY09 by
contributing US$ 6.87 bn (FY09) with a YOY growth of 23.61%.
Indian domestic jewellery market - Rs.700 bn (USD14.58bn).
Coloured stones – precious,
semi-precious, synthetic
2.
Jewellery
Studded Jewellery
Urban jewellery market - Rs.280 bn (USD5.83 bn)

3.

4.
5.
balance is studded jewellery which includes diamond studded as well
as gemstone studded jewellery
The industry is largely unorganized with over 100,000 jewellery
manufacturing units, 6,000 players in diamond processing and
450,000 goldsmiths

Silver Jewellery
Rural & semi-rural market - Rs.420 bn (USD 8.75 bn).
Gold jewellery contributes 80% of Indian jewellery market
(approx. Rs.560 bn / USD 11.67 bn)
Plain gold Jewellery
Costume Jewellery
3.
Pearls
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Shree Ganesh’s Focus Segment
GOLD JEWELLERY IN TOTAL EXPORT
FY09
Family jewelers constitute 96% & only 4% being organized
With increasing disposable income, buying pattern shifting to
purchase of branded jewellery from organized & reputed outlets
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Source: GJEPC
Gems & Jewellery Industry
GEMS & JEWELLERY EXPORT
GOLD JEWELLERY EXPORT
USD. Bn.
Source: GJEPC
USD. Bn.
Source: GJEPC
RISING SHARE OF SHREE GANESH
RISING SHARE OF GOLD EXPORTS
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RISING SHARE OF
GOLD EXPORT
6%
7
7%
6%
5%
6
5%
5
4%
4
3%
3
2%
2
1
2%
1%
0
0%
FY2007
DTA Exports
Source: GJEPC
FY2008
EPZ/SEZ Exports
FY2009
SGJ's Market Share
4
Company Overview
Background
Manufacturing
Markets
Awards
•One of the largest
manufacturer exporters of
‘Handcrafted Gold Jewellery’
•Promoted in August 2002
by Nilesh Parekh & Umesh
Parekh, belonging to a
jeweller family having more
than 5 decades of
experience in jewellery
making
•Investment by Credit Suisse
PE aggregating Rs. 80 Crs for
10.99% equity
•stake at a price of Rs. 300/per equity share (Pre Bonus
of 1:1) in March 2008
• Manufacturing facilities
located at Manikanchan,
Kolkata, a Gems & Jewellery
dedicated SEZ promoted by
West Bengal Government
• Employs over 562 ‘gold
karigars’ (craftsmen) from
West Bengal
• Manufacturing capacity of
over 30,500 Kgs of gold
jewellery p.a.
• Primarily focused on Export
markets which contributes
over 95% of Total Revenues
with major export markets
as UAE, Singapore and Hong
Kong
• Expanding Retail Presence
in Domestic Market
• “Outstanding Export
Performance and
Contribution in the Trade
for Plain Precious Metal
Jewellery Exports by Unit
from EoU/EPZ” for 2008 &
2009
• Rating in December 2009 of
SE 1A by Crisil indicating
High performance
capability and highest
financial strength
• Promoters awarded
SinGem Young Achiever
Award, Eastern India in
2006
• Four Star Export Trading
House
5
Milestones
2003
1992-2002
Promoters
engaged in
family business
of gold
jewellery
manufacturing
2010-2012
Strengthening
presence in
retail market
2002
Year of
Incorporation
2010-2012
Further
expansion to
meet growing
demand and
backward
integration.
Took over
partnership
firm “Shree
Ganesh
Jewellers”
engaged in
jewellery
business
2004
Set up
manufacturing
unit at
Manikanchan
SEZ
2006
Promoters
awarded
“Young
Achievers
Award” by
SinGems
2008
2009
Turnover of Rs.
2,000 Crs
Received “Four
Star Export
House” status
PE investment
by Credit
Suisse
“Outstanding
Export
Performance”
award by
GJEPC
2007
Opened first
branded Retail
Jewellery store
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Product Portfolio
•
•
•
•
•
•
Handcrafted hallmarked gold jewellery and gold enameled jewellery
Gold jewellery studded with precious stones like rubies, emeralds, sapphires, pearls and
diamonds
Portfolio includes rings, earrings, pendants, bracelets, necklaces, bangles, medallions, gold
coins
Product catalogue includes Plain Gold sets, Gold Bengal Antique sets, Jadau - Kundan sets,
Gold Mumbai Rajkot Antique sets, Gold and studded Bangles, Polki – Chakri sets
15 member strong in-house design development team
Tie up with Sabyasachi Mukherji, renowned Indian Fashion Designer for high end exclusive
jewellery
7
Business
•
Exports
•
•
•
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•
Domestic
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Amongst the largest player in the industry
 Capacity to produce 21,500 kg of Gold Jewellery p.a.
Products majorly include Handcrafted Gold Jewellery
Major markets UAE, Singapore & Hong Kong
Contributes to more than 95% of turnover
Some of the International customers such as Ibrahim Al Sayegh
Jewellery, Sparkle Jewellery FZE (UAE), Denzong (Hong Kong),
Wondercut Pte Ltd, Abhusan (S) Private Limited, Excellency Pte
Limited, (Singapore) has been company’s long standing customer
Wholesale of Handcrafted Gold Jewellery (Deemed Exports)
Expanding retailing of branded jewellery under GAJA brand through
existing 13 outlets and proposed outlets
Focus on Tier II & III cities through exclusive shops & franchisees in
 Kolkata, Ahmedabad, Bangalore Chandigarh, Patiala, Bhatinda,
Jalandar, Rajkot, Amritsar,
Ludhiana, Mangalore and Siliguri.
Company has other brands with different themes mainly targeting
young men and women
Leading fashion designer Sabyasachi Mukherjee is an empanelled
designer
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Professional & Experienced Management
Mr. Nilesh Parekh
Chairman, Promoter
-
Experience of over 20 years in the jewellery industry
Responsible for overall strategic long term plans and product development
Awarded “Young Achievers Award” by Sin Gems in 2006
Mr. Umesh Parekh
Managing Director, Promoter
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Experience of over 19 years in the jewellery industry
Heads global marketing operations and overseas business development
Awarded “Young Achievers Award” by Sin Gems in 2006
Mr. Sharad Mohata
Non Executive Director,
CA, ICWA
-
Practicing Chartered Accountant & qualified Cost Accountant
Professional experience of over 17 years in the field of Accounting, Taxation,
Project Finance etc.
Mr. P. S. Ingty
Independent Director – Ex IAS
-
Masters degree in Arts and MBA from Leeds University, United Kingdom
Principle secretary to the Government of West Bengal (1997 – 2002)
Mr. S. C. Chaturvedi
Independent Director, CA
-
Practicing Chartered Accountant with professional experience of over 38 years
in the field of accounting, taxation, project finance, etc.
Associated with several public and private sector companies as Auditors
Mr. Hemang Raja
Nominee Director
(Credit Suisse)
-
B.Com - Mumbai University & MBA - University of Abilene, Texas, USA
Managing Director and Head-India, Credit Suisse Private Equity Asia
Ex MD and CEO of IL & FS Investsmart Ltd.
Mr. D. P. Mathur
Independent Director
-
Masters in Economics from University of Rajasthan
Had been associated with Planning Commission, Center for Management in
Agriculture, IIM-Ahmedabad, UN-FAO, Ministry of Commerce
Mr. T. K. Das
Independent Director – Ex IAS
-
IAS Officer from 1965 to 2001
Had been Joint Secretary to GoI, Principal Secretary to WB Govt, Consultant9 to
WHO, Administrator to CSE
Financial Highlights (Stand alone)
Exports
9000
8000
7000
5000
4000
3000
2000
1000
0
2007-2008
2008-2009
2009-2010
Domestic
1,600.00
1,400.00
1,200.00
In US $
IN US $
6000
1,000.00
800.00
600.00
400.00
200.00
Retail
Wholesale
2007-2008
8.66
192.43
2008-2009
13.84
1,353.39
2009-2010
75.74
879.38
Financial Highlights (Stand alone)
EBIDTA
Revenue
600.00
8000.00
550.21
7439.55
7000.00
500.00
6411.83
461.48
6000.00
400.00
4000.00
In US $
IN US $
5000.00
3671.58
3000.00
300.00
293.67
200.00
2000.00
100.00
1000.00
0.00
0.00
2007-2008
2008-2009
2009-2010
2007-2008
2008-2009
2009-2010
Financial Highlights (Stand alone)
PAT
400.00
350.00
300.00
200.00
150.00
100.00
50.00
0.00
2007-2008
2008-2009
PAT Margin
2009-2010
7.00%
6.00%
5.00%
In %
In US $
250.00
4.00%
PAT Margin
3.00%
2.00%
1.00%
0.00%
2007-2008
2008-2009
2009-2010
Robust Business Model
Strategic Location
Excellent client relationship
- Easy access to skilled Bengali karigars
- SEZ units - tax & custom benefits
- Proximity to Airport
- Super Distributors - Bulk orders
- Repeat Order due to confidence
- Long standing association with buyers
Strong Designing Capabilities
- Intricate handcrafted design;high
demand
- Tie up with Sabyasachi Mukherji
- Technological innovations
Large Size - Lower Costs
- Nominated Agency
- Canalising Agent
- Four Star Export House
REVENUES
Rs. 29,426 mn
3 yr CAGR 89%
EBITDA
Rs. 2,119 mn
3 yr CAGR 84%
Insulation from price volatility
- Gold business enjoys natural hedge
- Gold jewellery bought as investment
- Hedged foreign exchange position
Experienced Management
-Professional management
-Promoters individually have 2 decades of
experience
-Jeweller from generations
Growth Strategy
Customer Diversification
Product Portfolio Enhancements
• Targeting Europe, Australia, Africa & Middle East
• Set up Singapore & Dubai subsidiaries to market
products as well as procure gold
• Cater hitherto untapped domestic markets
• Moving from handcrafted jewellery to machinemade
light, italian and fusion jewellery
• Tie-up with more designers both India & Overseas
• Launch international quality & design in India
Capacity Enhancement
Strengthening Retail Foray
• Capacity expansion to enhance revenues
• Newer products range - higher market penetration
• Latest Technology for wastage reduction
• Better technology for margin enhancement
• Strengthening GAJA brand
• Expand from existing 13 retail outlets to 49
• Franchisee Outlets Model to penetrate at low capex
• Overseas retail outlets for high end customers
• More Focus on Tier II & III cities
Integration
Pursue Alliances
• Setting up a Gold refinery to add to feedstock
• Retail stores to assist in procuring gold for refinery
• Canalising Agency status to allow direct gold import
• Domestic expansion to allow reach to final customer
• Tie up with more domestic and international designers
• Targeting international foray with overseas
subsidiaries
• Tie with stores like Vishal Megamart - high footfall
14
stores
Investment Highlights
One of the largest
organised players
Insulated & hedged
Gold Jewellery
business
Capacity
enhancement &
margin improvement
Backward & forward
integration plans
Designs for both class
& mass
Retail plans to tap
domestic markets
Yet to truly unfold
15
Thank You