Gitanjali Gems Posts Over 70 Per Cent Fall in Q1 Profit

New Delhi: Gitanjali Gems on Thursday posted an over 70 per cent fall in consolidated net profit at Rs 10.73 crore for the quarter ended June 2014 due to lower sales and higher financial costs.

The company had reported a net profit of Rs 36.11 crore for the corresponding quarter a year ago.

"Due to regulatory restrictions on import of gold and unfavourable India and US dollar currency fluctuation, the business of the group was severely impacted," Gitanjali Gems said in a filing to the BSE.

Net sales declined to Rs 2,072.86 crore in the quarter under review as against Rs 3,919.18 crore in the year-ago period, it said, adding that the company's revenue dropped both from India and overseas operations.

Revenue from Indian operations fell to Rs 857.24 crore in the quarter ended June 2014 from Rs 2,237 crore a year ago, while income from overseas operation declined to Rs 1,215.62 crore from Rs 1,682 crore last year.

The company's expenses fell to Rs 1,850.36 crore from Rs 3,778 crore in the quarter under review.

The company said in the filing its seven subsidiaries have negative net worth for last 3-4 years and it has plans to revive them to make viable. Total investment value of these subsidiaries was Rs 28.95 crore, as of June 30.

It also said that the the group's over drawn position in the working capital account stood around Rs 110.56 crore as of June 30, mainly on account of not servicing interest debt for the first quarter of this year.

"The consortium bankers have assessed enhanced working capital requirements and the sanctions are awaited."