International Gemological Institute Limited

Financial Performance Highlights

Q2 FY27 Consolidated Performance:

  • Issued 4.35 million reports (26% YoY growth)
  • Revenue from operations: ₹3,980 million (31% YoY growth)
  • Certification revenue: ₹3,875 million (32% YoY growth)
  • EBITDA: ₹2,445 million (39% YoY growth)
  • EBITDA margin: 61.4% (340 basis points improvement)
  • PAT: ₹1,858 million (43% YoY growth)
  • PAT margin: 46.7% (400 basis points improvement)
  • Average Revenue Per Report (ARP): ₹891 (4% YoY improvement)

H1 FY27 Consolidated Performance:

  • Revenue from operations: ₹7,688 million (27% YoY growth)
  • Volume growth: 22% YoY
  • EBITDA: ₹4,683 million (34% YoY growth)
  • EBITDA margin: 60.9% (310 basis points improvement)
  • PAT: ₹3,516 million (37% YoY growth)
  • PAT margin: 45.7% (330 basis points improvement)
  • ARP: ₹945 (4% YoY improvement)

Segment-wise Growth (Q2 YoY):

  • Lab-grown diamonds (LGD) loose stones: 37%
  • LGD jewelry: 47%
  • Gemstones and other certification: 331%
  • Natural diamonds: 8%
  • Natural diamond jewelry: 3%

India Standalone Performance (Q2):

  • Certification revenue: ₹3,040 million (28% YoY growth)
  • Volume growth: 19% YoY
  • Total revenue: ₹3,056 million (27% YoY growth)
  • EBITDA: ₹2,123 million (21% YoY growth)
  • EBITDA margin: 69.5% (down 340 basis points due to investments)
  • PAT: ₹1,697 million (22% YoY growth)
  • PAT margin: 55.5% (down 340 basis points)
  • ARP: ₹827 (7% YoY improvement)

Operational and Strategic Updates

Business Performance Drivers:

  • Lab-grown diamond segment showing strongest growth with significant capacity additions by Indian growers
  • Festive season demand healthy with Diwali on November 8, 2026 (compared to October 20, 2025 last year)
  • Natural diamond market facing some hesitation due to high gold prices
  • Overseas laboratories grew 31% (excluding AGL acquisition)

AGL Acquisition Impact:

  • Contributed 3% to revenue growth and 2% to EBITDA growth in Q2
  • Gemstone certification grew 331% in Q2 primarily due to AGL integration
  • Building colored stone capabilities in other laboratories using AGL methods
  • Technical review and standardization of testing equipment underway
  • Planning global expansion for AGL services

Geographic Expansion:

  • Started operations in Italy in 2026
  • Saudi Arabia operations being prepared
  • Company established in Botswana in September 2026

Technology Initiatives:

  • AI-based work allocations and scheduling implemented in laboratories
  • Improving operational efficiency and turnaround times
  • Maintaining consistent grading standards

Marketing and Brand Building:

  • B2B2C marketing initiatives including IPL partnership
  • Brand search volume increased 66% since March 2026
  • Reaching 20 million unique audience quarterly
  • 150+ million views on campaigns year-to-date
  • Regional campaigns in West Bengal (Puja campaign) and NCR (Weaveone)

Capital Structure and Cash Flow

Balance Sheet Position:

  • Cash and bank balance: ₹10,749 million as of September 30, 2026
  • Operating cash flow for H1: ₹4,157 million (89% of EBITDA, 118% of PAT)
  • Working capital release of ₹662 million due to receivables reduction from ₹2,885 million to ₹2,402 million

Capital Allocation:

  • Board declared first interim dividend of ₹2.55 per share in August, paid in September
  • Priorities: capacity investments, geographic expansion, technology, selective acquisitions, and returning surplus cash

Guidance and Outlook

Original Guidance (May 2026):

  • 15% revenue growth for FY27
  • 20% EBITDA growth for FY27

Updated Guidance:

  • Given H1 performance (27% revenue growth, 34% EBITDA growth), management expects to outperform original guidance
  • Expect full-year performance similar to H1 growth rates
  • Strong industry tailwinds and operational execution supporting outperformance

Management Commentary

Market Context:

  • Union Home Minister Amit Shah encouraged keeping entire lab-grown diamond chain in Indian hands
  • IGI was first international laboratory to certify lab-grown diamonds in 2005
  • Lab-grown diamonds becoming first diamond purchase for many families
  • More than 50% of US bridal market now lab-grown

Strategic Priorities:

1. Accelerate natural diamond growth and gain market share

2. Maintain leadership in lab-grown diamonds

3. Scale up gemstone business through AGL integration

4. Continuous brand investment

5. Leveraging AI and ML for operating effectiveness

Q&A Session Highlights

Growth Sustainability: Management confirmed LGD growth is driven by capacity additions at grower level, not pre-festive stocking, and expects momentum to continue

Geographic Expansion: LGD jewelry growth broadening beyond US to Europe, Latin America, and Australia

Certification Economics: Certification cost remains 2-3% of retail price, providing value assurance

Competitive Advantages: First-mover advantage, 50-year brand trust, ISO accreditation for 18 years, and extensive grading data for AI/ML applications

Grading Standards: IGI committed to maintaining 4Cs certification despite some competitors moving to simplified classification

Margin Outlook: Operating leverage expected to continue driving EBITDA growth faster than revenue growth