shree ganesh jewellery house limited july 2010. 2 agenda industry overview company overview...
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Shree Ganesh Jewellery House Limited
July 2010
2
Agenda
Industry Overview
Company Overview
Financial Highlights
Robust Business Model
Investment Highlights
3
Gems & Jewellery Industry
Sr. Category Sub-category
1. Gemstones Diamonds
Coloured stones – precious, semi-precious, synthetic
2. Jewellery Plain gold Jewellery
Studded Jewellery
Silver Jewellery
Costume Jewellery
3. Pearls -
1. The Industry exported goods worth US$ 21.23 bn constituting 12.52% of India’s Exports (FY 09) 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%.
2. Indian domestic jewellery market - Rs.700 bn (USD14.58bn). Urban jewellery market - Rs.280 bn (USD5.83 bn) Rural & semi-rural market - Rs.420 bn (USD 8.75 bn).
3. Gold jewellery contributes 80% of Indian jewellery market (approx. Rs.560 bn / USD 11.67 bn) balance is studded jewellery which includes diamond studded as well
as gemstone studded jewellery
4. The industry is largely unorganized with over 100,000 jewellery manufacturing units, 6,000 players in diamond processing and 450,000 goldsmiths Family jewelers constitute 96% & only 4% being organized
5. With increasing disposable income, buying pattern shifting to purchase of branded jewellery from organized & reputed outlets
GOLD JEWELLERY IN TOTAL EXPORT
FY09
Source: GJEPC
Shree Ganesh’s Focus Segment
4
Gems & Jewellery Industry
CAGR 7.87%
GEMS & JEWELLERY EXPORT
Source: GJEPC
USD. Bn.
RISING SHARE OF SHREE GANESH
GOLD JEWELLERY EXPORT
Source: GJEPC
USD. Bn.
CAGR 26.53%
RISING SHARE OF GOLD EXPORT
RISING SHARE OF GOLD EXPORTS
2%
5%
6%
0
1
2
3
4
5
6
7
8
FY2007 FY2008 FY2009
0%
1%
2%
3%
4%
5%
6%
7%
DTA Exports EPZ/SEZ Exports SGJ's Market Share
Source: GJEPC
5
Company Overview
Background•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• 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.
Markets• 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
Awards• “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
6
Milestones
1992-2002Promoters engaged in
family business of
gold jewellery
manufacturing
2002Year of
Incorporation
2003Took over
partnership firm “Shree
Ganesh Jewellers” engaged in jewellery business
2004Set up
manufacturing unit at
Manikanchan SEZ
2006Promoters awarded “Young
Achievers Award” by SinGems
2010-2012Strengthening presence in
retail market
2010-2012Further
expansion to meet
growing demand and
backward integration.
2009Turnover of
Rs. 2,000 Crs
Received “Four Star
Export House” status
2008PE
investment by Credit
Suisse“Outstandin
g Export Performance” award by
GJEPC
2007Opened first
branded Retail
Jewellery store
7
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
8
Business
• 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
Exports
Domestic
9
Professional & Experienced Management
Mr. Nilesh ParekhChairman, 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 ParekhManaging Director, Promoter
- 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 MohataNon 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. IngtyIndependent 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. ChaturvediIndependent 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 RajaNominee 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. MathurIndependent 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. DasIndependent Director – Ex IAS
- IAS Officer from 1965 to 2001- Had been Joint Secretary to GoI, Principal Secretary to WB Govt, Consultant to
WHO, Administrator to CSE
Financial Highlights (Stand alone)
2007-2008 2008-2009 2009-20100
1000
2000
3000
4000
5000
6000
7000
8000
9000
Exports
IN U
S $
2007-2008 2008-2009 2009-2010
Retail 8.66 13.84 75.74
Wholesale 192.43 1353.39 879.38
100.00
300.00
500.00
700.00
900.00
1,100.00
1,300.00
1,500.00
Domestic
In U
S $
Financial Highlights (Stand alone)
2007-2008 2008-2009 2009-20100.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
7000.00
8000.00
3671.58
6411.83
7439.55
Revenue
IN U
S $
2007-2008 2008-2009 2009-20100.00
100.00
200.00
300.00
400.00
500.00
600.00
293.67
461.48
550.21
EBIDTA
In U
S $
Financial Highlights (Stand alone)
2007-2008 2008-2009 2009-20100.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
PAT
In U
S $
2007-2008 2008-2009 2009-20100.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
PAT Margin
PAT Margin
In %
Robust Business Model
REVENUESRs. 29,426 mn3 yr CAGR 89%
EBITDARs. 2,119 mn
3 yr CAGR 84%
REVENUESRs. 29,426 mn3 yr CAGR 89%
EBITDARs. 2,119 mn
3 yr CAGR 84%
Strategic Location
- Easy access to skilled Bengali karigars- SEZ units - tax & custom benefits- Proximity to Airport
Strategic Location
- Easy access to skilled Bengali karigars- SEZ units - tax & custom benefits- Proximity to Airport
Strong Designing Capabilities
- Intricate handcrafted design;high demand
- Tie up with Sabyasachi Mukherji- Technological innovations
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
Large Size - Lower Costs
- Nominated Agency- Canalising Agent- Four Star Export House
Experienced Management
- Professional management- Promoters individually have 2 decades
of experience- Jeweller from generations
Experienced Management
- Professional management- Promoters individually have 2 decades
of experience- Jeweller from generations
Insulation from price volatility
- Gold business enjoys natural hedge- Gold jewellery bought as investment- Hedged foreign exchange position
Insulation from price volatility
- Gold business enjoys natural hedge- Gold jewellery bought as investment- Hedged foreign exchange position
Excellent client relationship
- Super Distributors - Bulk orders- Repeat Order due to confidence- Long standing association with buyers
Excellent client relationship
- Super Distributors - Bulk orders- Repeat Order due to confidence- Long standing association with buyers
14
Growth Strategy
• Targeting Europe, Australia, Africa & Middle East • Set up Singapore & Dubai subsidiaries to market
products as well as procure gold• Cater hitherto untapped domestic markets
• 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
• 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 expansion to enhance revenues• Newer products range - higher market penetration• Latest Technology for wastage reduction• Better technology for margin enhancement
• 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
• 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
• 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
• 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
stores
• Tie up with more domestic and international designers• Targeting international foray with overseas
subsidiaries• Tie with stores like Vishal Megamart - high footfall
stores
Customer Diversification Product Portfolio Enhancements
Capacity Enhancement Strengthening Retail Foray
Integration Pursue Alliances
15
Investment Highlights
Designs for both class & mass
Capacity enhancement &
margin improvement
One of the largest organised players
Retail plans to tap domestic markets
Backward & forward integration plans
Insulated & hedged Gold Jewellery
business
Yet to truly unfoldYet to truly unfold
Thank You
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