Will the price raise affect the volumes ?
π πππ° ππ«π πππ°π§π¬ ππ ππ€π² ππ¨π₯π & ππ’ππ¦π¨π§ππ¬ πππ.
2 Likes
Looks like just a marketing gimmick. None of that looked real.
AB Novel Jewels has kept ambitious plans to be in number 3 in Indian Jewelry market and will have expansion plans to add up to 300 stores in next 3 years. As AB Novel Jewels is existing custome, it is going to benefit Skygold.
Disc: Invested
5 Likes
Recurring export order of 200 KG per month from one of the most
reputable name in the jewellery industry. Q3 fy 25 volume was 447 kg per month.
6 Likes
Anyone knows what Skygold does for gold exposure. Gold has had a good run and if they are not hedged the revaluation gains on inventory alone could be quite substantial
1 Like
Yes, they hedge every sale and purchase on a daily basis on the MCX. Therefore, whenever GML is introduced, their hedging exposure will decrease, but they hedge after the sales are made.
Based on my understanding of their hedging policy, they will neither benefit when the gold rate increases nor incur losses when it decreases.
6 Likes
But the one consequences of Gold Prices falling would reflect into their sales growth slowing down a bit as Sales = Volume x Realisation as the prices of gold had a really good run-up in the past the Top-Line growth we saw was also a consequence of the same. But if prices fall from here, that topline growth might slow, although the growth in volume might still continue. The growth in realisation might turn negative if prices fall.
Although this shouldnβt affect the margins hence the PAT growth as they donβt make money by selling gold (essentially their buying and selling price per unit gold are same) they make money on the making charges essentially.
Also one more impact of gold prices falling could be accelerated growth in volumes as cheaper gold might attract more buyers(but need to keep an eye out for macroeconomic factors as well).
Disclosure: Invested, views might be biased!
4 Likes
Board meeting for fund raise
1 Like
Too much is happening simultaneouslyβfund raise, acquisition, disinvestment. We will have to track market reaction and volume movement post-dilution and hopefully get some clarity from the management on the next call.
1 Like
My only concern is that management seems to be very aggressive. Upping the guidance, acquisitions, capacity expansion, big order wins etc are good but this will make the job of management much more difficult. They should not play to the gallery. Their job is not to manage the stock price but to execute their plans. High time they get out of this rut and stop coming with declarations almost on weekly basis
1 Like
Ganna N Gold aquisition.pdf (796.2 KB)
@vir259 , Totally agree with this. Such moves , unnecessarily increase expectations, which are difficult to fulfill.
1 Like
Too many corporate moves in a short period usually indicate that the base business lacks longevity or steady growth prospects.
You keep acquiring, so that top line growth is maintained and bottom line can be massaged. Not sure thatβs whats happening here and the reality may be totally opposite but the sector and the moves make it scary.
Also why would a company with 3000 crores turnover acquire a firm with 29 Crores turnover. and then pay 225 crores in shares for it. Makes absolutely no sense.
6 Likes
225 cr for 19 cr pat ie 11.8 pe. I think its great deal.
2 Likes
Revised press released
Actually M/s Ganna N Gold Private Limited turnover account only service charge as revenue. So EBIDTA margin is as high as 80%.
4 Likes
I understand that we need to be extra vigilent and proactively gind red flags in companies to avoid another Gensol-gate. But we need to ask ourselves the following questions:
- Has the management been walking the talk?
- Revenue growth that they project for next 5 years in 2023, have they been able to meet or rather overachieve it?
- Capacity expansion that they promised, did they achieve it?
- Was the merger of 2 subsidiary smooth without any impact on their business or growth?
- Have they been able to get new clients and grow the business?
- The new acquisition is aligned with their core business or not.
If the answers of the above question is YES, we dont need to be so skeptical.
Equity dilution is a concern though.
9 Likes