News dalla rete ITA

30 Settembre 2022

India

EXPORTS OF CUT AND POLISHED DIAMONDS LIKELY TO FALL BY 10% IN FY23: ICRA

ICRA Ratings expects India’s exports of cut and polished diamonds (CPDs) to taper by 8-10% to $22.0-22.5 billion in FY2023, amid the demand moderation. According to a recent sector note, CPD exports have already declined year-on-year (YoY)by 5% in the first five months if FY2023, led by a 20% decline in export volumes, partly offset by high YoY polished prices since January 2022. This coupled with the firm rough prices, is expected to trim the operating profit margins of Indian diamantaires by up to 100 bps from FY2022 levels to 4.5% in FY2023.During FY2022, India exported its decade-high level of CPDs worth $24.3 billion led by pent-up demand and large stimulus packages in key consuming countries like the US, partly aided by limited avenues of discretionary spending during the pandemic period. The demand since then, however, has softened following the opening up of other avenues of spending as well as Covid-19 related restrictions in several parts of China, which accounts for 10% of the global demand.Ms. Sakshi Suneja, Vice President & Sector Head, ICRA said “The near-term demand outlook for polished diamonds remains subdued amid the inflationary pressures as well as the unwinding of surplus liquidity in key-consuming regions of the US and Europe. While some improvement in volumes is expected in the coming months, driven by the onset of the festive season, overall export volumes are expected to remain lower by 13-15% in H2 FY2023. Due to a moderation in demand, the polished diamond prices are also expected to remain range-bound, translating into an 8-10% YoY decline in CPD exports (in value terms) in FY2023.”The prices of rough diamonds had soared by 23% in CY2021, following limited supply from mining companies and robust revival in demand following the pandemic. Rough prices continue to remain elevated in YTD FY2023 due to limited availability of roughs from Russia in the market following the US sanctions on Alrosa PJSC - Russia-owned diamond mining entity, which supplies 30% of the rough diamonds globally. Amid the muted demand, polished diamond prices are unlikely to fully catch up with the rough prices. This in turn would shave OPMs of Indian CPD players in FY2023 by up to 100 bps to ~4.5%.Commenting on the credit profile of CPD entities, Mr. Priyesh Ruparelia, Co-Group Head said “CPD players are consciously controlling their working capital cycle to limit their dependence on bank debt. While the inventory levels of CPD entities might increase in FY2023 due to a slowdown in demand,Read more at:https://economictimes.indiatimes.com/news/economy/foreign-trade/exports-of-cut-and-polished-diamonds-likely-to-fall-by-10-in-fy23-icra/articleshow/94528893.cms (ICE MUMBAI)


Fonte notizia: The Economic Times