Sovereign Diamonds Reports Significant Net Loss in Q1 Amid Rising Costs

Sovereign Diamonds Limited , a manufacturer of 18K fine jewellery, has reported a substantial net loss for the first quarter, ending June 30. The company's financial performance shows a marked decline compared to the same period last year, primarily due to increased expenses.

Financial Highlights

• Net Loss: The company reported a net loss of ₹485.28 crore, a significant increase from the net loss of ₹6.45 crore in the same quarter of the previous year.
• Total Income: Despite challenges, total income rose to ₹817.81 crore from ₹568.20 crore year-over-year.
• Net Sales: Net sales increased to ₹780.44 crore from ₹533.98 crore in the corresponding quarter of the previous year.
• Expenses: Total expenses surged to ₹1,303.34 crore from ₹570.96 crore, with the cost of materials consumed jumping to ₹1,119.66 crore from ₹398.13 crore.
• Earnings Per Share: Basic and diluted earnings per share stood at ₹(8.38) compared to ₹(0.11) in the previous year's quarter.

Operational Overview

Sovereign Diamonds Limited continues to operate in a single segment, focusing on gold and diamond studded jewellery. The company's board meeting was held on August 12, where the results were reviewed by the audit committee and approved by the Board of Directors.

Management Changes

In a separate announcement, the company disclosed the appointment of Mr. Sumer Gehani as a Non-Executive Director (Additional Director) for a term of 5 years, effective August 12. Mr. Gehani, son of Mr. Ajay Gehani (Chairman and Managing Director), brings experience from both the luxury and technology sectors, having worked at Tapestry Inc. and Magna Technology Group.

Auditor's Review

J. D. Zatakia & Co., Chartered Accountants, conducted an independent review of the unaudited standalone financial results. The auditors stated that nothing has come to their attention that causes them to believe that the financial results do not present a true and fair view in accordance with applicable accounting standards and other recognized accounting practices.

Financial Performance Summary

Conclusion

While Sovereign Diamonds has seen an increase in total income and net sales, the significant rise in expenses, particularly in the cost of materials, has led to a substantial net loss. The company faces challenges in managing costs while maintaining growth in a competitive jewellery market.