Shree Ganesh Jewellery House-Buy Shree Gan Jewel; target of Rs 200: Sunidhi Securities

Sunidhi Securities is bullish on Shree Ganesh Jewellery House and has recommended buy rating on the stock with a target of Rs 200 in its September 8, 2011 research report.

"Shree Ganesh Jewellery House (SGJH) is one of the largest manufacturers and exporters of handcrafted gold Jewellery of India, exporting primarily to countries such as U.A.E., Singapore, and Hong Kong. The products portfolio includes handcrafted and hallmarked gold jewellery, gold enameled jewellery and gold jewellery studded with precious stones. SGJHL has manufacturing units located in Mondalpara, Manikanchan SEZ which is presently the only jewellery SEZ in West Bengal and Domjur (upcoming). SGJHL tapped the capital market in March 2010 with an IPO of `315 crore priced at `260 per share for expansion."

"SGJHL received the “Four Star Export House" certificate from the Joint Director of Foreign Trade, Government of India in June 2009 and has been bestowed upon with the status of “Nominated Agency" under the Foreign Trade Policy, which allows the Company to directly import precious metals."

"SGJH derives more than 85-88 percent of its sales from overseas market and primarily exports to the United Arab Emiates (UAE,) Singapore and Hong Kong. SGJH also has plans to expand operations in Africa. Customers include Wondercut Pte, Denzong Hong Kong, Ibrahim Al Sayegh Jewellery."

"SGJH is also scouting for diamond and gold mines in Africa. Venturing into new territories like Europe, Australia and Africa and exploring retail opportunities in the overseas markets are expected to yield returns in the near future."

"SGJH`s continuous efforts to expand the product portfolio, demand for its specialized handcrafted jewellery, long standing customer relations, enhanced contribution of Italian fusion jeweler, foray into gold lending business, processing of gold refinery coupled with healthy demand of its products in the domestic as well as overseas market give strong visibility to revenue and profitability going forward."

"At the CMP of `139, the share is trading at a P/E of 3.0 on FY12E. We recommend BUY with a target price of `200 in the medium term," says Sunidhi Securities research report.

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