Fitch sees jewellery cos reporting stable margins this year

MUMBAI: Fitch Ratings expects the Indian gems and jewellery industry to continue witnessing muted demand in 2012 with volume growth of below 4% for the overall segment.

The low volume growth, says the rating agency, may possibly be attributed to a reduction in discretionary spending both in the export and domestic markets.

However, a lean cost structure adopted by companies in the sector and limited further downside of macroeconomic factors impacting jewellery demand are likely to limit further deterioration in operating margins experienced in 2009.

Fitch-rated Indian gems and jewellery include Suashish Diamonds ('Fitch BBB(ind)'/Stable), BC Sen & Company ('Fitch BBB(ind)'/Stable), Arena Lifestyle Pvt. Ltd. ('Fitch BB(ind)'/Stable), Mani Exports ('Fitch B+(ind)'/Stable), Tribhovandas Bhimji Zaveri (Delhi) Pvt Ltd ('Fitch BB+(ind)'/Stable), Om Anand Exports ('Fitch A4(ind)') and MK ('Fitch A4(ind)').