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Monday, January 3, 2011

GITANJALI GEMS LTD - Buy on every Dips

Scrip Code : 532715 / GITANJALI
CMP :  Rs. 210.85; Buy at Rs. 190-195
Target: Rs. 370.00 - DIWALI 2011
Market Cap : Rs. 1776.83 cr
52 Week High/Low : Rs. 394.95/Rs. 92.55
Total Shares : 84270000 shares; Promoters : 45472424 shares – 53.95 %; Public holding : 9754593 shares – 11.58 %
Book Value : Rs. 241.60; Face Value : Rs. 10; EPS : Rs. 20.99
P/E : 10.08 times; Ind P/E : 12.73; EV/EBITDA : 12.65
Total Debt : Rs. 1601.46 cr; Enterprise Value : Rs. 3384.28 cr.

Gitanjali Gems Ltd - Gitanjali Gems is one of the largest manufacturers and retailers of diamonds and jewellery in India. It sources rough diamonds from various primary or secondary sources then engages in the cutting and polishing the rough diamond for export to the international market as well as manufacture and sale of diamond and other jewellery through its retail operations in India and abroad. The company was started in 1966 as a partnership. It came with an IPO in the year 2006 with 1.70 cr shares at the price band of Rs.170 -195. The demand for diamond and jewellery products is largely dependents on higher employment and economic levels, which leave higher disposable income in the hands of the consumers. In downturn consumers can quite easily scale down their consumption of jewellery and diamonds.
Gitanjali Gems has got two-diamond manufacturing facilities located at Borivali in Mumbai and at the Special Economic Zone in Surat. It has also got a 100% export oriented unit in SEEPZ Mumbai, which produces gold and platinum studded jewellery. There are also jewellery-manufacturing facilities at MIDC, Andheri, which produces branded jewellery for the retail operations in India. The company has a workforce of over 2300 employees.
Company sells its jewellery under the brand - Asmi - Premium work wear collection & has 104 outlets, 2 exclusive stores; Sangini - Entire product range including bridal jewelry; Nakshatra - Entire product range including bridal jewelry available with 374 retailers and 1 franchisee. More franchisees are being added; Gili - Diamond jewelry at reasonable prices having 256 outlets of which 3 are exclusive stores; Vivvaha - Wedding jewelry; Maya - Gold jewelry for wedding and other similar events; D’Damas - International quality designs combined with Indian values sells through 380 retailers, 2 exclusive outlets, 3 shop-in-malls and 21 franchisees; Hoop - Fashion Silver Jewelry.
The Gitanjali Group has acquired Lucera for Rs 25 crores in 2008. In October 2009, the UK-based Brand Finance, valued the four leading brands of the company at Rs.514 crore (Nakshatra), Rs.468 crore (Gili), Rs.309 cr. (D'Damas) and Rs.210 cr. (Asmi), respectively. GGL is not only gearing towards improving sales but is also looking at multiplying the value of these brands by 1.5 to 2 times by 2011-2012.
Recently, Gitanjali Gems Ltd. (GGL) is in talks with global PE investors Blackstone and CX Partners to divest 10 % of equity to raise $100 million in its restructured jewellery brand holding company. According to sources, in a separate valuation prepared by these PE players, the holding company is valued at close to Rs 5,000 crore, three times the current market capitalisation of Rs 1,700 crore of the entire group. Sources say, around Rs 50 crore will go to the GGL account, while the remaining Rs 400 crore will be re-invested in the company for working capital and inventory build up.
So the question comes that how the subsidiary would have a higher valuation than the parent company? The answer may be that the subsidiary would be a low-debt company, with a minimum working capital cycle, along with high possibility of return on investment. Considering half of the PE multiple of the industry leader, Tanishq, the valuation could be much higher. GGL’s current book value is close to Rs 2,200 crore. This company is in a low margin business because of raw material costs, which is Gold. Now Gitanjali holds gold stock from 11000 levels, so no more margin pressure from raw material side till now. 
On 28th December 2010 - Promoter Mr.Mehul Choksi bought 15113 shares at Rs.195.75/sh, making his holding to 38274421 shares a 45.42%.   
On 29th December 2010 - Promoter Mr.Mehul Choksi bought 100000 shares at Rs.213.57/sh, making his holding to 38374421 shares a 45.54%. 
MORE PROMOTERS DEAL - CLICK HERE 
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9 comments :

  1. when would the target be reached?

    ReplyDelete
  2. HI
    HERE'S is the news development in Gitanjali Gems...
    http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2011/02/11&PageLabel=1&EntityId=Ar00101&ViewMode=HTML&GZ=T

    ReplyDelete
  3. HI BHAVIKK
    MEHUL CHOKSI BOUGHT SHARES READ HERE
    http://www.moneycontrol.com/livefeed_pdf/Feb2011/Gitanjali_Gems_Ltd_260211_SAST2.pdf

    ReplyDelete
  4. Hi
    Here's an updated on GITANJALI GEMS in the meeting held on May 27, 2011, Company has recommended a final dividend of Rs. 3/share subject to the approval of the shareholders at AGM.
    NET PROFIT - Rs.354.81 cr, NET SALES - Rs.9456.40 cr

    ReplyDelete
  5. Hi Bhavikk !
    What can be the price after F&O inclusion of Gitanjali

    ReplyDelete
  6. HI READERS !!
    An updated on Gitanjali -
    Gitanjali Gems Ltd today announced that some of the holders of the company's Foreign Currency Convertible Bonds (FCCBs) have exercised their option to convert these FCCBs into equity shares.These FCCB holders have bonds worth US$3 million.They have been converted at a price of Rs 220 per share. The current market price of the shares is at 40 per cent premium to the conversion price.Gitanjali Group, which owns brands such as Nakshatra and D'damas, has interests in diamond jewellery, retail and lifestyle businesses.The company retails its products through a vast network of over 3,000 points of sale of self-owned and franchised stores.The Group has three diamond polishing facilities and nine jewellery manufacturing units in India.

    ReplyDelete
  7. HI BHAVIKK
    HEARD THAT GITANJALI GEMS IS IN A GROUP LIST ON NSE FROM 3rd OCT 2011....what could be the effect of that...

    ReplyDelete
  8. HI MY READER FRIENDS !!!

    THE TARGET ON GITANJALI GEMS ACHIEVED - 2day its trading at 383.....HURRAY....

    FEELING HAPPY TO MAKE PEOPLE HAPPY...
    THIS IS THE POWER OF LONG TERM INVESTING
    HAPPY INVESTING

    ReplyDelete
  9. HI FRIENDS!
    AN UPDATE ON GITANJALI GEMS
    Aston Luxury Group, a wholly owned subsidiary of branded jewellery maker Gitanjali Gems , has acquired 100% stake in Crown Aim Ltd. Crown Aim is a Hong Kong based company engaged in jewellery distribution to China, Japan, USA, middle east and Europe.
    Gitanjali Gems did not disclose the sum for which it bought this company.
    In addition, Crown Aim has a jewellery manufacturing unit in China and plans to setup retailing of jewellery in China. Crown Aim also has a 100% subsidiary with the name Alfred Terry Holding Limited and a step down subsidiary named Alfred Terry Limited in London, for jewellery distribution in the UK.

    ReplyDelete

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