RAPAPORT… Mumbai-based diamond manufacturer Asian Star believes jewelry demand will remain sluggish through the end of the quarter as the coronavirus weighs on consumer spending.
“Economic disruption caused by Covid-19 has changed consumer behavior, as people have become conservative in spending,” the company said last week. “Consumer sentiment is expected to improve over a period of time…. The company expects that normalcy in the business may not return before the end of the fiscal second quarter,” which runs through September 30.
Asian Star’s operations were shut for two months, from mid-March to mid-May, which had a “severe impact” on revenue for the first quarter of the fiscal year, it noted. The company has since reopened, but it plans to manufacture jewelry products to match demand.
The company’s profit fell 45% to INR 631.7 million ($8.4 million) for the year ending March 31, as sales were hit by a nationwide lockdown at the end of the fourth quarter.
Revenue, including subsidiaries, dropped 16% to INR 30.49 billion ($406.4 million). Diamond sales slid 19% to INR 26.29 billion ($350.5 million), while revenue from jewelry rose 10% to INR 6.53 billion ($87.1 million).
In the fourth fiscal quarter, group sales decreased 19% year on year to INR 7.06 billion ($94.2 million), while profit plunged 79% to INR 62.9 million ($838,269).
Image: A diamond ring. (Asian Star)
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