It's raining IPOs on D-Street and Kalyan Jewellers has opened its public issue for a subscription today. TK Ramesh, Executive Director of Kalyan Jewellers, spoke to CNBC-TV18.
Ramesh said, "For Q3, we are better than the pre-COVID levels. Going forward, we don’t see any ambiguity from the revenue growth which we see in Q3 and that is what we are looking forward to.”
On brand expansion, he said, “As a brand, we have been in an expansion phase wherein we were entering into 2-3 new states every year. So we were on a high operating expenditure and high branding. This year itself in the nine months, we have reduced operating expenditure by around Rs 140-150 crore only in India and that predominantly is because the expansion phase is over wherein we don’t have to do too much of cost on branding. We were doing 3 percent of our revenue for only branding which is now in the range of 2 percent.”
“Now is the time for operating leverage which partly is seen in this year even after losing our Q1 almost fully. We are back to almost the same level for the nine months at India.”
When asked about store opening plans, Ramesh said, “Out of the Rs 800 crore primary, Rs 600 crore is for expansion in working capital, it means to open stores. Historically, the investment per store has been in the range of Rs 35 crore for inventory and Rs 5-6 crore of capex for a 5,000 sq feet store.”
On debt situation, he said, “We don’t intend to reduce any debt, we don’t intend to add that either. So first of all, immediately when the IPO happens the debt-equity ratio will be in the range of 1:1.”
For full interview, watch accompanying video.