CMP: 325

Gitanjali Gems Ltd. manufactures and retails jewelry. The Company buys, cuts, and polishes rough diamonds and manufactures diamond and other jewelry. Gitanjali retails its jewelry in India and exports to Europe, the United States, the Middle East, and Asia.

Gitanjali Gems is a decent bet in mid-cap space. It trades at a P/E of little over 10 with decent dividend yields of close to 1% in the last 12 months. It runs at a debt of 1882 Crores with 1105 Crores in inventories & 134 Crores cash in hand. Revenues have risen from 2219 Crores to 5122 Crores in the last 5 years. Profits have risen from 82 Crores to 225 Crores over the last 5 years. NPM has moved up smartly from less than 4% to well over 4% over the last 5 years. FY2012 has been pretty good in-terms of growth. Recent budget hikes in duties towards Jewellery segment is seen as a short term negative. But long term growth will prevail.