Hello Sir,
Hope you are doing well.
Recently I was reading about Lab Grown Diamonds (LGD) which are fast gaining acceptability in the Indian market.
As per our understanding, currently Goldiam International is the only major listed company dealing in LGDs.
LGDs are chemically, optically and physically identical to earth mined diamonds, but are significantly more affordable.
As per Economic Times article, a carat of LGD costs ₹60,000-70,000, a fraction of ₹10-11 lakh for a natural diamond. Further, 60% YOY growth in the demand for LGDs is expected this festive season.
Below, we have shared interesting insights from the Q4 FY 23 con-call of Goldiam International. Hope you find the details useful for your own investments or to add the stock to your watch list.
Just a few days back we released our new stock recommendation for our Alpha and Alpha + Members.
It’s a sub 3,000 crore market cap company wherein we are expecting company might double its profit in the next 3-4 years
The management has introduced a new product line wherein they are targeting 600 crore + sales in FY 26 with EBITDA margins of 20-22%
The company is amongst the top 2 players in its industry
For more details on the stock recommendation – click HERE
Goldiam International – Insights from Q4 FY 23 con-call of the company
– Basic details
- Strategically, the increased focus on lab-grown diamonds and our omnichannel business model helped us achieve 36% gross margins for FY23 as against 31% in FY22
- Lab-grown diamond jewellery sales have also sizably added; The share of lab-grown jewellery in the overall mix stands at 23% in FY23
- While this category has faced some price erosion in FY23, we believe this has bottomed out as of date
– Ticket size
- Value for lab-grown diamond jewellery for last year was about $1,100 per piece
- For natural diamonds jewellery it was $530 per piece
- People are preferring to buy lab-grown diamond jewelry right now because the natural diamond price of the jewellery for the same styling is 10 times more priced
- Why LGD jewellery unit price higher than natural diamond jewellery – This is also a phenomenon of Goldiam’s strategy within the lab-grown diamonds space where we can focus on jewellery that is higher end within the lab grown space on the bridal market as well
– LGD price correction
- There is a lot of capacity that comes up in the growing side of the business in terms of lab-grown growing within the Gujarat and Rajasthan are
– How to sustain margin in LGD
- We have always historically seen distribution to be the main factor that will determine success in the lab-grown field
- We have focused on doing 100% captive consumption so that we can gain the benefit of additional margin in jewellery; we are focused on selling this not to wholesalers but directly to large retailers in America
- It helps us from the perspective of additional margins on the lab-grown side of the business, we can capture every margin component in the supply chain from growing right up until jewellery distribution to retailers
- We have always focused on distribution rather than just growing capacities without locked-in sales
– Balance sheet
- Cash and investments stand at Rs 256 crores
– Industry Scenario
- US is our largest market where we supply fine jewellery to large US retailers. The USA has been witnessing a record high of inflation, coupled with high-interest rates
- These factors have resulted in a multifold increase in mortgage payments, lending to a squeeze on discretionary, spending among mid-income segments in the United States
- This affected sales of fine jewelry in FY23
- The second half of FY23 and Q4 particularly saw US retailers undertaking a large-scale destocking
- Goldiam had to partner with key retailers and inventory realignment exercises by running strategic discount programs. This impacted margins during Q4 FY23
– Outlook
- Although the economic situation in the USA hasn’t completely stabilized, some green shoots are visible
- The Company’s focus is in transition further into lab-grown diamonds and e-commerce sales, which are healthier and more profitable business models with consumer salience
- We believe that increasing wallet shares with existing customers is the best way to grow
- Just by adding more and more retailers, we will be creating competition in our design between the two retail organizations
- We prefer to be working with the top five or six retailers in America, and we will be looking forward to growing our wallet size with them, whether it’s natural diamonds, whether it’s lab-grown diamonds, whether it’s bridal jewellery or whether it’s fashion jewellery or bands or tennis bracelets
(End)
Disclaimer: This is not a recommendation to buy/sell Goldiam International. The securities quoted are for illustration only and are not recommendatory.
Best Regards,
Ekansh Mittal
Research Analyst
Web: https://www.katalystwealth.
SEBI Research Analyst Registration No. INH100001690
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
Details of Associate: Not Applicable
Analyst Certification: The Analyst certify (ies) that the views expressed herein accurately reflect his (their) personal view(s) about the subject security (ies) and issuer(s) and that no part of his (their) compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report.
Disclaimer: http://www.
Address – 7, Panch Ratan, 7/128, Swaroop Nagar, Kanpur – 208002, Contact No. – +91-7275050062
Compliance Officer – Mr. Ekansh Mittal, +91-9818866676, ekansh@
Grievance Redressal – Mittal Consulting, grievances@
“Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors”.
“Investment in securities market are subject to market risks. Read all the related documents carefully before investing.”
The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision
This report is for the personal information of the authorized recipient and does not construe to be any investment, legal or taxation advice to you. Ekansh Mittal/Mittal Consulting/Katalyst Wealth is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your information and should not be reproduced or redistributed to any other person in any form. This document is provided for assistance only and is not intended to be and must not alone be taken as the basis for an investment decision. Ekansh Mittal or any of its affiliates or employees shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Neither Ekansh Mittal, nor its employees, agents nor representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ekansh Mittal/Mittal Consulting or any of its affiliates or employees do not provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose, and non-infringement.
The recipients of this report should rely on their own investigations. Ekansh Mittal/Mittal Consulting and/or its affiliates and/or employees may have interests/ positions, financial or otherwise in the securities mentioned in this report. Mittal Consulting has incorporated adequate disclosures in this document. This should, however, not be treated as endorsement of the views expressed in the report.
We submit that no material disciplinary action has been taken on Ekansh Mittal by any regulatory authority impacting Equity Research Analysis.
Disclaimer: You can access it here – LINK
Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – No
Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No
Whether the research analyst or research entity or his associate or his relative has any other material conflict of interest at the time of publication of the research report or at the time of public appearance – No
Whether it or its associates have received any compensation from the subject company in the past twelve months – No
Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past 12 months – No
Whether it or its associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether it or its associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided – No
Whether the research analyst has served as an officer, director or employee of the subject company – No
Whether the research analyst or research entity has been engaged in market making activity for the subject company – No