Company Name
Goldiam International Ltd
Current market price on the date of publishing this report: 137 Rs
Introduction
Established in 1987, Goldiam is a well-established exporter specializing in exquisitely designed and luxurious diamond jewellery. With over three decades of experience, the company has earned a reputation as the preferred manufacturer for numerous leading global branded retailers, departmental stores, and wholesalers in the American and European markets.
The company manufactures jewellery in-house and is among the few players with a patent for the laboratory-manufacturing process of diamonds.
Goldiam is widely recognized for its commitment to responsibly sourced diamonds, employing cutting-edge technologies, and adopting efficient manufacturing processes to achieve optimal costings and short delivery lead times. Focusing on the mid-to-affordable diamond and bridal jewelry segments, Goldiam operates with a dedicated sales office in New York, supported by design teams located in both India and the USA.
Goldiam stands out as one of the rare diamond jewelry manufacturers that boast complete backward integration. The entire jewelry-making process is seamlessly executed in-house, all under one roof. This approach guarantees seamless communication, swift turnaround times, and an effective product development cycle.
The company boasts highly skilled and creative jewelry designers coupled with state-of-the-art technology, ensuring the production of top-tier diamond jewelry.
Business Products
Goldiam International is a supplier to leading global retailers, departmental stores and wholesalers with a diversified product portfolio of • Natural diamond jewellery • Lab grown diamonds (LGD) and jewellery • Its value added diamond jewellery business focuses on being a proxy to US consumer and retail demand.
Engagement Rings: The company crafts elegant and inspiring engagement rings featuring a diverse array of designs, ranging from traditional to extravagant. Its streamlined process ensures a swift turnaround, from design inception to prompt delivery.
Wedding Bands: Company stocks a large variety of beautifully crafted diamond wedding rings that are perfect for the occasion. As per the company, this bands will never be let down by these sparkling rings that will last for generations.
Anniversary Rings: An anniversary cements the bond of love. Company , Goldiam makes sure to make it memorable by displaying beautifully crafted anniversary rings collection. Its award winning designers consistently comes up with graceful solitaires.
Bridal Sets: Company offers themed bridal sets made from the finest diamonds and exquisite setting that every woman would be proud to own. The eye catching center stones and the cohesive design on these sets will make any lady sparkle.
Earrings & Pendants: Company’s earrings and diamond combination are perfect for the discerning and style conscious consumer. It offers a range of trendy, smart and minimalistic designs that can be used as daily fashion wear.
Necklace & Earrings: Continuing range of fashion jewelry, Goldiam offers a wide array of designs for Necklace and Earring combinations with distinctive styling, design accentuations and settings.
Order Book:
In Q1, Goldiam expanded its market presence into the Middle East with a maiden order of ₹30 crores for studded jewelry. While the U.S. remains the largest market, the company is actively exploring new geographies.
As of September 30, 2023, the order book size stands at ₹165 crores, expected to be executed in the next four to six months. It’s important to note that e-commerce sales, being conducted online on a spot basis, are not included in the order book.
Financials
For the Year ended March 23
- Net sales for the Year ended March 23 stood at 533 crores, down 22% from 688 crores in March 22.
- Operating profit for the Year ended March 23 stood at 104 crores, down 20% from 130 crores in March 22.
- Profit before tax for the Year ended March 23 stood at 117 crores, down 21% from 149 crores in March 22.
- Net profit for the Year ended March 23 stood at 85 crores, down 20% from 106 crores in March 22.
- As of March 23 company is completely debt free.
- Besides company has cash and equivalents of 106 crores as of march 23.
- Additionally, the company holds investments totaling 151 crores on its balance sheet, as per the management’s indication. These investments are diversified across various mutual fund schemes and bonds, ensuring immediate accessibility as needed. This results in a substantial liquidity reserve on the balance sheet.
For Q2FY23
Goldiam showcased a robust performance in Q2 FY24, with consolidated revenue reaching ₹139.3 crores, marking an impressive 50% YoY increase and a substantial 15% QoQ growth.
Q2 FY24 witnessed an EBITDA of ₹33.2 crores, signifying a commendable 10% YoY increase and an impressive 40% QoQ growth.
The EBITDA margins reached 23.9%, showcasing a substantial improvement of 422 basis points over Q1 FY24. This enhancement can be attributed to an increased focus on the lab-grown diamond business and online operations.
Profit After Tax for Q2 FY24 reached ₹23.5 crores, indicating a notable 25% YoY growth and a substantial 36% QoQ increase.
The board of directors has proposed an interim dividend of 60%, amounting to ₹1.2 per equity share with a face value of ₹2.
Shareholder Rewards: With the conclusion of the equity share buyback in August 2023, Goldiam has demonstrated a strong track record of rewarding shareholders. Over the past six financial years, the company has disbursed ₹211.7 crores (₹224.6 crores after considering the proposed interim dividend) through dividends and share buybacks.
Cash and Cash Equivalents: The company reports Cash and Cash Equivalents (including investments) at ₹277.6 crores as of H1 FY24, reflecting a solid financial position.
For Half year ended Sept 23
The H1 revenue stood at ₹260.5 crores, reflecting a commendable 10% YoY growth. The notable factors contributing to this success include a smart product mix, enhanced inventory management, and the anticipation of a prosperous upcoming festive season.
The H1 FY24 PAT amounted to ₹440.8 crores, reflecting a steady 2% YoY growth.
Buyback Approval
– Approved on May 20, 2023, and July 5, 2023, by the Board of Directors and shareholders, respectively.
– Authorized buyback of up to 21,79,493 equity shares at ₹150 per share.
– Aggregate buyback amount not exceeding ₹32.69 crores, representing 2% of the total equity shares.
Shareholders’ Payout:
– Shareholders’ payout, including 1st interim dividend and buyback, amounted to ₹62.00 crores.
– This payout, comprising tax on buyback (excluding transaction costs and other incidental expenses), equates to 109.00% of the standalone profit after tax of the Company.
Management’s comments:
While Tansish and other retail jewelers in India may not currently emphasize the value of lab-grown diamonds, Goldiam’s management holds a distinctly optimistic view on the potential in this sector. This optimism is rooted in the significant cost difference, where a traditional 1-carat diamond can exceed 4-5 lakh rupees, while a comparable lab-grown diamond is available for around 60,000 Rs. The management anticipates a growing preference for lab-grown diamonds, particularly among individuals from rural income groups and the lower middle class, owing to their more affordable pricing.
Furthermore, the management has communicated an expectation for EBITDA margins in the range of 20-25% in the upcoming periods.
Conclusion
Goldiam International, a completely debt-free, cash-rich company with over three decades of experience, is involved in the manufacturing and export of gold and diamond jewellery to global retailers. The company boasts a diversified product portfolio encompassing Natural diamond jewellery and Lab-grown diamonds (LGD) and jewelry. With a substantial cash balance on the balance sheet and zero debt, Goldiam maintains EBITA margins exceeding 20%. The management anticipates sustaining this positive trajectory, supported by a 165 crores order book executable over the next 2-3 quarters and enhanced visibility of earnings growth. As the management is poised to announce further developments in the coming period, considering all these factors, we believe this company is worth a closer look.
