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earnings | IST

Kalyan Jewellers Q2: Shift from unorganized to organized segment to aid margins, says management

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30 percent is the organized market share currently and the company expects a quick shift from the unorganized to organized segment, Ramesh Kalyanaraman, Executive Director at Kalyan Jewellers, told CNBC-TV18.

Kalyan Jewellers India, on Wednesday, posted a Rs 68.77 crore consolidated profit after tax (PAT) for the quarter ending September 30, as easing of COVID-19 related restrictions and recovering economy boosted sales momentum. The company had reported a consolidated loss of Rs 136.12 crore during the corresponding quarter of 2020-21, Kalyan Jewellers India said in a regulatory filing. Revenue from operations of the company during the quarter under review grew by 60.65 percent to Rs 2,888.69 crore, compared to Rs 1,798.05 crore in the same period of the previous fiscal.
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"30 percent is the organized market share currently and we expect a quick shift from the unorganized to organized players," said Ramesh Kalyanaraman, Executive Director at Kalyan Jewellers, in an interview to CNBC-TV18.
“Hallmarking is going to be totally enforced from November 30. We, as a brand and as part of the organized segment, believe that this shift from unorganized to organized is going to be further accelerated and it will help us gain market share,” he mentioned.
“Stickiness is very high in our sector. So once the customer is with a brand, they stay with the brand for lifetime,” he explained.
On festive sales, he said, “We saw a very high traction for this festive season. This is mainly because of the shift from unorganized players to organized players and as a brand, we were able to capture it well.”
The high momentum in revenue started in Q3 of the previous financial year and the company has a bigger base now. “There is high momentum in revenue and footfalls. We expect Q3 and the quarters ahead also to be exciting,” he said.
The operating leverage for the company has started stepping up, the opex percentage on revenue has improved considerably as well when compared to the previous year, Kalyanaraman noted.
“Way forward, when the revenue is going to build, the margins are also going to be better because the corporate overheads are already taken care of by the existing revenue and all the revenue which comes over, that will help us to improve the margins,” he mentioned.
Kalyan Jewellers today is present across 21 states in the country. “Our store level opex is only in the range of 4-5 percent and anything above that comes in the bottomline, which helps us to improve our margins,” he said.
(With inputs from PTI)
For the full interview, watch the accompanying video.
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