Credit rating agency, CARE has reaffirmed ‘BB’ rating to Golkunda Diamonds & Jewellery’s (GDJL’s) Long-term bank facilities worth Rs 35 crore. The rating assigned to the bank facilities of GDJL continues to be constrained by the modest scale of operation, moderately leveraged capital structure and weak debt coverage indicators.
The rating further continues to be constrained by working capital intensive nature of operations, susceptibility of the profit margin to volatility in raw material price, foreign exchange fluctuation risk and presence in the highly fragmented industry leading to intense competition.
GDJL is in the business of manufacturing and export of diamond studded gold jewellery (viz. rings, pendants, earrings, bracelets, bangles and necklaces) since 1990. The company is primarily an export oriented unit with exports mainly to destinations namely USA, Hong Kong & UAE, Oman, Qatar, Kuwait and Dubai and few others.
