BENGALURU (Reuters) – India’s Tribhovandas Bhimji Zaveri (TBZ) posted a 50% rise in first-quarter profit on Monday, helped by increasing demand for its gold jewellery despite soaring prices.
Consolidated net profit rose to 170.5 million rupees ($2 million) in the quarter ended June, the jeweller said, while sales rose 4.5% to 5.96 billion rupees.
TBZ’s core profit margin expanded to 7.14% during the quarter from 5.65% a year earlier as the company focused on high-margin products, which boosted the bottomline, it said.
Soaring gold prices, however, pushed up the company’s raw material costs by 34%. Total expenses rose 3%.
As gold prices continue to rise, retailers are either increasing prices to protect their bottomline or offering discounts to attract customers.
Larger rival Titan missed quarterly profit estimates last week as higher gold prices dampened demand in its mainstay jewellery segment, while discounts helped Kalyan Jewellers report a higher first-quarter profit.
Shares of TBZ ended about 6% lower amid a broader selloff in the market on Monday. The benchmark Nifty 50 closed 2.7% lower.
($1 = 84.1150 Indian rupees)
(Reporting by Hritam Mukherjee and Dimpal Gulwani in Bengaluru; Editing by Sonia Cheema)
