MUMBAI, June 26 (Reuters) - Indian jewellery retailer Titan Industries expects higher interest costs from government curbs on gold financing to hurt earnings for the fiscal year ending March 2014, despite falling gold prices driving up sales, a top company executive said.
Indian jewellery makers have been hit by a series of government restrictions as India scrambles to stem a swelling current account deficit. The central bank has imposed measures forcing customers to pay upfront for gold and has prohibited credit from suppliers or bullion banks for import of gold for domestic use.
India, the world’s biggest gold buyer, has also raised the import duty on gold twice since Jan. 1, doubling it to 8 percent.
“Even bankers are not able to tell us how we can import gold, finance gold and so on. It’s in a state of flux right now,” Bhaskar Bhat, Titan’s managing director, told Reuters.
Titan, part of the Tata conglomerate, sells gold jewellery under the Tanishq brand. It also sells watches and sunglasses.
Titan Industries posted a 20 percent growth in net profit in the year-ended March 2013.
Earlier on Wednesday, jewellery maker Rajesh Exports said it expects sales and earnings to grow at 10 percent in the current financial year to March, from 25 percent expected earlier. (Reporting by Swati Pandey in MUMBAI; Editing by Prateek Chatterjee)