GITANJALI A

Gem In Indias
Crown?

INTRODUCTION
India is a leading player in the global gems and jewellery market.
The gems and jewellery industry occupies an important position in

the Indian economy. It is a leading foreign exchange earner, as well

as one of the fastest growing industries in the country.
The two major segments of the sector in India are gold jewellery

and diamonds.
Diamond distribution was dominated by a few major diamond

mining companies worldwide among which Diamond Trading

Corporation (DTC) was the largest diamond distributor. It accounted
for approximately 50 % of worldwide diamond distribution.

INDIAN RETAIL JEWELLERY OVERVIEW

Past

Present

Unbranded

Branded

Silver & Gold jewellery

Gold & Diamond jewellery

Investment

Investment + Fashion

Traditional design

Fashionable & innovative design

Marriage & festival is peak Wearability and gifts

season
Jewellery sold on commodity Jewellery being sold on a per
basis with labor charges
piece basis

DIAMOND INDUSTRY
Diamond Manufacturing Industry
Cut and Polished Diamonds
Retailing of Diamond Jewellery
Government Initiatives and Regulations for the Gems and Jewellery

Industry in India.

GITANJALI GEMS LTD.

BUSINESS OVERVIEW
Established presence

Founded as a single company cutting and polishing diamonds for the

jewellery trade at Surat, Gujarat, in 1966, the Gitanjali Group became,
many times over, a pioneer among major diamond and jewellery houses.

First major diamond and jewellery house to be launched and run by modern

entrepreneurs rather than dynastic jewellers. An authorised DTC

Sightholder and loyal customer and a modern multinational business run
on innovative insights.
Leading brands

MICHAEL PORTERS FIVE FORCE

MODEL FOR JEWELLERY INDUSTRY
Potential
New Entry

Supplier

Industry
Rivalry

Substitutes

Buyers

SWOT ANALYSIS OF GITANJALI

JEWELLERY
LTD.
Strengths
Large integrated diamond & jewellery player and having an international presence.
Pioneers of branded jewellery in India.
Strong marketing & distribution network. Strong retail presence in India and in U.S.

112 distributors and 1246 outlets in India and 143 outlets in U.S.
Strong brand equity and broad product range Such as, Gili, Asmi, Nakshatra, Sangini,

Ddamas, Vivaaha, Maya, Giantti, Desire, Samuels etc.

Expanding manufacturing capabilities in Mumbai and at special economic zone in

Surat to address increasing demand.

Net Worth is 2,914.27 crore Rs. So we can say that it is financially very strong

company.
Sight holder status with DTC through a promoter group company.

Weaknesses
There may be conflicts of interest between them and certain of their Promoter

group companies.
As the major raw material requirements need to be imported, companies

normally stock huge quantities of inventory resulting high inventory carrying

costs.
Technology is less improved compared to China and Thailands company.

Opportunities
New markets in Europe & Latin America.
Growing demand in South Asian & Far East countries.
Industry moving from a phase of consolidation.
Expansion possibilities in lifestyle and luxury products in India like watches,

leather goods, Platinum jewelry because increasing disposable income of

people.

Threats
International Competition:-China, Sri Lanka and Thailand's entry in small

diamond jewellery.

Increase in the price of Gold & Diamonds.

Other local competitors. According to the data 97% jewellery sales are by

family jewelers.

Threat from producing nation like S.A. & Russia.

MANUFACTURING

Marking

Cleaving

Sawing

Cutting

Polishing

FINANCE
The companys operations running across the whole value chain so finance

is the very much important factor. Working capital requirement is much

more. The company is having finance from various sources like shares,
bank loan, and credit line.

INFRASTRUCTURE
The company is having latest technological manufacturing plants. Its

branded showrooms & other outlets are having good infrastructure. It is

also having plants in special economic zone at various places

PROCUREMENT
The company procures its raw materials, machinery & other ancillary

things from recognized sources. The company is having good creditability

with supplier. It has to maintain its relations with different sight holder for
procurement of diamond for jewellery making.

TECHNOLOGY
The company is using latest technology in processing means jewellery

manufacturing & also in designing. The company is having business in so

many countries so that it has to pay attention over the designing,
manufacturing etc. with the high technology to satisfy buyers needs.

HUMAN RESOURCES
As of September 30, 2005, the Company had 410 full-time employees, of

which approximately 117 employees were employed at its corporate offices

in Mumbai. In addition, as of September 30, 2005, its subsidiaries, joint
ventures and associate companies employed in the aggregate more than
740 employees, including 250 employees in its retail operations.

KEY SUCCESS FACTOR (KSF)

Marketing & Distribution related factor:
Strong retail presence in India and the U.S.: The company is occupying

good position in retail jewellery provider in both India as well as U.S.

Gitanjali has a strong network of distribution. Here Strong retail presence in
India and in US. It has 112 distributors and 1246 outlets in India and 143
outlets in US.

Strong brand equity and broad product range :

It is the pioneer of branded jewellery in India. It brand equity is too high.

Significant focus on retail and distribution network to

drive growth:
It also keeps in mind distribution network which provide the product to end

users. The company is having its retail outlets also.

Sophisticated
manufacturing
upcoming Hyderabad SEZ:

facilities

including

The company is having good infrastructure facility in various special

economic zones.
Gitanjali has been achieved economies of scale and learning curve effects

which is benefited in low cost production because in India skilled labor is

available at cheaper rate.

Technology Related factor:

Gitanjali has expertise in cutting, polishing the diamonds and in designing

the jewellery (specifically in small design).

Presence across the whole value chain : The first & foremost success factor

for the company is of its presence across the entire value chain

CURRENT POSITION OF
GITANJALI JEWELERS
Gitanjali Gems reported that consolidated net profits fell 42 percent to INR

291.52 million ($5.97 million) in the third fiscal quarter ending December 31,
2008 as a result of the companys diamond and jewelry segments contracting
during the period.
Gitanjalis third quarter net sales fell 11 percent to INR 11.109 billion ($227.55

million), as diamond revenues declined 19 percent to INR 5.366 billion ($109.98

million).
The company noted a 17 percent decline in revenues at its India operations

during the quarter and a 7.8 percent drop in revenues from the rest of the world.
For the first nine months of the fiscal year, Gitanjalis net profit fell 6 percent to

INR 1.195 billion ($24.48 million). The companys diamond business saw pre-tax
profits fall 16 percent during the period, while its jewelry unit profits grew 27
percent. Group net sales rose 8.3 percent to INR 36.207 billion ($741.56 million).

FUTURE PERSPECTIVES
As per Research and Markets, the gold processing industry in India

although, has around 15,000 players, Only 80 players generate revenues

over US$ 5 million. Therefore, there is high growth potential for Indian
gems and jewellery in the global market.
Furthermore, in spite of the fact that India is not a major miner of precious

metals and stones, the countrys inexpensive and skilled workforce are one
of the best in the world for processing of diamonds, which makes the
country a favored destination with the exporters.
Additionally, there is a huge potential in promoting traditional Indian

designs and styles. There is a massive demand for hand-made jewellery,

especially in ethnic Indian designs, from the sizeable Indian emigrant
population in the Middle-East, South-East Asian countries, the US and
Canada among others.

THANK YOU