Gems & Jewelry Market India

October 2013

Executive Summary
Market
Gems and Jewelry (G&J) market in India was valued at INR a bn in 2012 and is expected to grow at x% CAGR G&J market includes gemstones such as diamonds, colored stones and pearls; and precious metals and jewelry such as gold & gold jewelry, silver jewelry and gemstones-studded jewelry

Drivers:

Challenges:
Rising gold prices Stiff competition among players Dependence on raw materials imports Emerging threat from other countries

Drivers & Challenges

Mass appeal and growing income among households Low cost and abundance of skilled labor Growing use of high-end technology Advantages of SEZs Changing consumer perceptions & preferences Growing training institutes

Trends Government Policies and Initiatives Competitive Landscape

Growing organized retail space Aggressive marketing and advertising Online retailing of jewelry Preference towards affordable jewelry Industrial policy FDI policy Taxes Kimberley Certification Process

Large scale shows and exhibitions Domestic players acquiring foreign companies Investments from PE firms Hallmarking Foreign Trade Policy (2009-2014) Initiatives Import Duties and Relaxations

Major Companies
Company 1 Company 4 Company 2 Company 5 Company 3 Company 6

GEMS & JEWELRY MARKET IN INDIA 2013.PPT

Economic Indicators Introduction Value chain Market Overview EXIM Drivers & Challenges Trends Industry Bodies and Associations Government Policies and Initiatives Competitive Landscape Strategic Recommendations Appendix
GEMS & JEWELRY MARKET IN INDIA 2013.PPT

Economic Indicators (1/3)

GDP at Factor Cost: Quarterly
INR tn 14 13 12 11 10 Q1 Q2 2009-10 2010-11 2011-12 Q3 2012-13 Q4 a1 b1 c1 d1 a2 b2 c2 d2 b3 c3 d3 b4 c4 d4

Inflation Rate: Monthly

%
1.0 0.8 0.6 0.4 0.2 0.0

Nov 2012 - Dec 2012

Dec 2012 - Jan 2013

Jan 2013 - Feb 2013

Feb 2013 - Mar 2013

Mar 2013 - Apr 2013 4

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Indias major strength in the G&J value chain is its strong processing capability
Stage 1
Indias Involvement: High/Moderate/Low

Stage 2
Indias Involvement: High/Moderate/Low

Stage 3
Indias Involvement: High/Moderate/Low

Stage 4
Indias Involvement: High/Moderate/Low

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Willingness of Indians to spend on jewelry has ensured that G&J market in the country is growing at a steady pace
Gems & Jewelry Overview

Gems & jewelry is a fast growing industry in the country and is one of the leading foreign exchange earning sectors in the country Country 1 and Country 2 have emerged as the leaders in terms of consumption in the global jewelry market Although traditionally the gems & jewelry sector has been dominated by small unorganized players, it is gradually getting more professionalized and organized

Market Size and Growth (Value-Wise)

INR bn
3,000 2,500 2,000 1,500 1,000 500 0

x% a b c d

2012

2013e

2014e

2015e

2016e

2017e

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G&J sector has been one of the biggest contributors to Indias forex earnings
Export-Import Overview

G&J accounted for ~y% of Indias total merchandise exports during FY 20- Exports in the industry have registered remarkable growth over the past a decades, from USD m mn in FY 19-- when Industry Body A was established, to USD n bn in FY 20- However, G&J exports declined u% in dollar terms and v% in rupee terms in 20-- due to the stagnating demand from Region 1 and Region 2
Decline in dollar terms was partly set off by the depreciation in the rupee Overall, G&J exports fell to INR p tn in 2012, compared with INR q tn in the previous year

Diamonds account for r% of the total G&J export volumes with gold jewelry contributing s%, colored gemstones and others contributing t% each and rough diamonds contributing w% of the total share Major importers of G&J from India are Country 1, Country 2, and Country 3 contributing b%, c% and d% respectively of the total exports Country 4 is the major supplier of raw materials, contributing f% of all imports

In the Union Budget for FY 20--, the import duty on pre-forms of precious and semi-precious stones was reduced from g% to h%

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Export-Import (1/16)
Pearls, natural or cultured, whether or not worked or graded but not strung, mounted or set Exports (Value-Wise)
INR mn
6,000 4,000 2,000 0

Imports (Value-Wise)
INR mn d1
600 400 200

a2

b2

c2

d2

a1 2010

b1 2011

c1 2012 2013

2010

2011

2012

2013

Exports (Region-Wise: 2013)

q1% r1% s1% UAE Hong Kong USA Others q2%

Imports (Region-Wise: 2013)

s2% r2% t2% UAE Hong Kong Japan China Others

p1%
HS Code: GEMS & JEWELRY MARKET IN INDIA 2013.PPT

p2%

Drivers & Challenges Summary

Drivers
Mass appeal and growing income among households Low cost and abundance of skilled labor Growing use of high-end technology Advantages of SEZs Changing consumer perceptions & preferences Growing training institutes

Challenges
Rising gold prices Stiff competition among players Dependence on raw materials imports Emerging threat from other countries

GEMS & JEWELRY MARKET IN INDIA 2013.PPT

Key Trends Summary

Growing organized retail space

Aggressive marketing and advertising

Online retailing of jewelry

Trends `

Preference towards affordable jewelry

Large scale shows and exhibitions

Domestic players acquiring foreign companies

Investments from PE firms

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Government Policies and Initiatives Summary

Industrial policy

FDI policy

Taxes

Government ` Policies and Initiatives

Kimberley Certification Process

Hallmarking

Foreign Trade Policy (2009-2014) Initiatives

Import Duties and Relaxations

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Competitive Benchmarking (x/y)

Key Ratios of Top 5 Companies Operational Basis (FY 2013) (p/q)
%
30 20 10 0

Gross Margin a1

Operating Margin

Net Margin

a3 b1 c1 a2 Titan Industries Ltd. b2 c2 b3 c3

a4 b4 c4

a5 b5 c5

Rajesh Exports Ltd.

Tribhovandas Bhimji Zaveri Ltd.

Gitanjali Gems Ltd.

Shrenuj Company Ltd.

Company 1 recorded the highest gross margin of a1%, while Company 2 with a2% recorded the lowest gross margin Company 1 recorded operating margin of b1%, higher than that of its peers, while Company 2 recorded the lowest operating margin with b2% Net margin was also highest for Company 1 with c1% while it was lowest for Company 2 which recorded net margin of c2%

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Public: Domestic Company Company 1 (1/4)

Company Information
Corporate Address Tel No. Fax No. Website Year of Incorporation Ticker Symbol Stock Exchange

Offices and Centres India

Products and Services

Category Products/Services Head Office

Key People
Name Person 1 Person 2 Person 3 Person 4 Designation Whole-time Director Managing Director Whole-time Director Director

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Public: Domestic Company Company 1 (2/4)

Financial Snapshot
INR mn
60,000 40,000 20,000 0

Key Ratios
Net Profit/Loss INR mn c2 d2
2,000 1,500 1,000 500 0
Particulars y-o-y change (2013-12) 2013 2012 2011 2010

Total Income b2 a2 a1 2010

Profitability Ratios
Operating Margin Net Margin Profit Before Tax Margin Return on Equity Return on Capital Employed Return on Working Capital Return on Assets Return on Fixed Assets

b1 2011

c1 2012

d1 2013

Financial Summary
Company earned a net profit of INR XX mn in FY 20XX, as compared to net profit of INR Y mn in FY 20YY It reported total Income of INR XX mn in FY 20XX, registering an increase of X per cent over FY 20YY It earned an operating margin of X.X per cent in FY 20XX an increase of X.X percentage points over FY 20YY The company reported debt to equity ratio of X.XX in FY 20XX, an increase of X.X per cent over FY 20YY

Cost Ratios
Operating costs (% of Sales) Administration costs (% of Sales) Interest costs (% of Sales)

Liquidity Ratios
Current Ratio Cash Ratio

Leverage Ratios
Debt to Equity Ratio Debt to Capital Ratio Interest Coverage Ratio

Key Financial Performance Indicators

Indicators
Market Capitalization (INR mn) Total Enterprise Value (INR mn) EPS (INR) PE Ratio (Absolute)

Value (dd/mm/yyyy)

Efficiency Ratios
Fixed Asset Turnover Asset Turnover Current Asset Turnover Working Capital Turnover Capital Employed Turnover
Improved Decline

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Public: Domestic Company Company 1 (3/4)

Key Business Segments
Segment 1
100% 50% 0% 100%

Key Geographic Segments

Region 1 Region 2

100%

100%

100%

100%

50% 0%

p1% p2% 2010

q1% q2% 2011

r1% r2% 2012

2010

2011

2012

2013

Business Highlights
Description Overview Diamond Business Jewelry Business Overseas Presence News Company 1 was established in 19-- for manufacturing and trading diamonds Principal operations of the company are classified into Business Segment 1 and Business Segment 2 It set up its first factory for manufacturing cut and polished diamonds in City 1 in 19-- and its second
manufacturing facility in City 1 for manufacturing large size polished diamonds in 20- They procure the rough diamonds directly from Company A as well as from the open market Company B, a subsidiary of Company 1, designs and manufactures, diamond studded jewelry which is retailed under the brand name Brand 1 across the world Company B owns a jewelry manufacturing facility in City 2, State 2 It has sales and distribution associates in z countries that include Country 1, country 2, Country 3, Country 4 and Country 5
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Public: Domestic Company Company 1 SWOT Analysis (4/4)

S O

W T

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Thank you for the attention

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