Rajesh Exports (BSE code 531500) is currently trading at P.s 29.55 (52 week high/low Rs 255.00/18.55). Rajesh Exports Limited (REL) is a Bangalore-based manufacturer of gold and diamond jewellery. It is a fully integrated company, right from refining to retailing. REL exports its products worldwide and distributes them within India to the wholesale jewellery market. REL also retails its products through its own network of retail jewellery showrooms Shubh Jewellers and Laabh Jewellers spread across India. REL holds the distinction of being the world’s largest manufacturer of gold jewellery. Its revenue comes mostly from export which contributes 98.48 per cent to the total. The depreciation of the rupee, we feel, is going to have a positive effect on the topline and bottomline of the company since it is a net exporter. REL recently announced its first half yearly results and second quarterly results. For Q2FYO9, the company recorded topline of P.s 2,472 crore against P.s 2,044 crore for the same period last year leading to a gain of 21 per cent. But the same growth was not translated in its bottomline. Net profit decreased from Rs 54 crore to Rs 26 crore. This decrease was due to an increase in the, cost of raw material. It increased from 93 per cent to
96 per cent of sales in the latest quarter. Looking ahead, with the price of gold coming down, we may see an impact in the bottomline. The order book decreased from P.s 1734 crore last quarter to P.s 762 crore this quarter. This decrease was mainly due to the company’s policy of slowing down the credit offered to its clients. We feel that all the negativities have already been discounted in the price of the scrip and advise you to hold the scrip for a long term benefit.
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