Kalyan Jewellers India Ltd’s core profit margins remain unchanged year-over-year, it said on Monday, as higher costs dulled the effect of higher revenue and record-high gold prices, sending the company’s shares down as much as 4.2%.
On the other hand, the Tata Group-owned Titan Co Ltd recently reported that its core profit margin increased as gold prices rose sharply in the second half of the January-March quarter.
Kalyan Jewellers reported an 18% increase in overall revenue, to 33.82 billion rupees ($413.6 million), helped by new showroom launches outside of its core markets in south India.
The revenue jump was offset by a near 18% growth in the Thrissur, Kerala-based company’s expenses as well. That led to its earnings before interest, tax, and amortisation (EBITDA) margins staying flat at around 7.6%.
Kalyan Jewellers also decided to sell two company-owned aircraft in an effort to lower its non-essential costs.
However, it had to write down the value of the aircraft by 332.5 million rupees, which led to a 3% drop in its profit to 700.9 million rupees. Excluding that, its profit rose 33.5%.
Kalyan Jewellers said it was seeing encouraging trends for the current quarter on the back of the wedding season and Akshaya Tritiya – an Indian festival considered auspicious for investments in gold in April.
Moreover, analysts expect gold prices to stay near all-time highs in the coming months as central banks stop raising interest rates and investors buy bullion as a hedge against economic uncertainty.