The Hindu Business Line : Rajesh Exports Q4 net profit drops 81%

Bangalore, July 1 Jewellery manufacturer Rajesh Exports’ attempts to protect business and avoid credit risk by going slow on big margin businesses and focusing on bulk business has impacted its profits in a big way.

While its Q4 net profit was down 80.8 per cent to Rs 9.39 crore, its net for the year ended March 31, 2009 was down 57.70 per cent at Rs 87.37 crore. Net sales for the fourth quarter rose 90.27 per cent to Rs 4,804.9 crore. Net sales for the year rose 42.39 per cent to Rs 12,341.7 crore.

Mr Rajesh Mehta, Chairman, Rajesh Exports, said, “We did not push high margin business (branded exports and diamond studded jewellery business) aggressively this year as they involve longer credit period and greater risks. Instead, we focussed on our main staple i.e. bulk business, which brought in low margins but big business. As recession is still quite deep, our agenda this year is not to go into loss and protect capital and business.”

Bulk orders brought in a majority of the revenues this year.

The company has also put domestic retail expansion on hold. It shut down three Laabh stores and is not looking to open any more stores till the market recovers. Currently, the company runs 22 Laabh stores and five Shubh outlets in the country.