Shrenuj & Co. Ltd. reported that net sales rose 6 percent year on year to $129.1 million (INR 7.14 billion) during the first fiscal quarter that ended on June 30, 2012. Net profit, however, declined 34 percent to $2.3 million (INR 127.2 million) as expenses and finance costs rose while other income declined.

“The demand for luxury products and the associated discretionary spending has been declining ‎over the past few months. The global economic growth forecasts are also being revised ‎downwards now. In this shrinking market size, we have been able to grow our market share," ‎said Shreyas Doshi, chairman and managing director of Shrenuj.

The Mumbai-based company stated that it expects to return to its previous levels of profitability in the coming ‎quarters as it has witnessed some stability in input prices.

The diamond and jewelry manufacturer reported that diamond segment sales rose 6 percent to $98 million (INR 5.42 billion), while sales at its studded jewelry business fell 4 percent to $33.4 million (INR 1.85 billion). Inter-segment revenue declined 50 percent to $2.3 million (INR 128.7 million).

Vishal Doshi, group executive director at Shrenuj, explained that the weakening rupee has ‎affected domestic jewelry demand but the overall impact was neutralized by the softening of ‎gold prices in U.S. dollar terms.

Group expenditures rose 5 percent to $121.1 million (INR 6.69 billion), while finance costs jumped 53 percent to $5.7 million (INR 313.2 million) during the quarter. Other income declined 33 percent to $374,638 (INR 20.7 million).

Shrenuj operates in 33 Indian cities through its Diti retail venture and has plans to increase the ‎number of its points of sale from 183 currently to 225 during this year. The company also has a presence in Hong Kong through its ''Joliesse'' brand retail stores. It has manufacturing units in India, Botswana and Israel and the bulk of its revenues are derived from its diamond sales. Shrenuj’s stock closed 3 percent lower at INR 58 per share Monday on the Bombay Stock Exchange.