Financial Performance Highlights

Q2 FY27 Results:

  • Revenue from operations: ₹818.7 crores, representing 54.8% YoY growth
  • Sales volume: 577 kgs, up 10% YoY
  • Gross profit: ₹68 crores, increased 53.1% YoY
  • EBITDA: ₹54.9 crores, grew 68.7% YoY
  • EBITDA margin: 6.7% (50 bps improvement)
  • PAT: ₹39.5 crores, increased 73.2% YoY
  • PAT margin: 4.8%

H1 FY27 Results:

  • Revenue from operations: ₹1,367.2 crores, representing 58.7% YoY growth
  • Sales volume: 968 kgs, up 10% YoY
  • Gross profit: ₹125 crores, increased 34.5% YoY
  • EBITDA: ₹103.9 crores, grew 40.8% YoY
  • EBITDA margin: 7.6%
  • PAT: ₹73.5 crores, increased 43.1% YoY
  • PAT margin: 5.4%

Strategic Business Updates

Business Model Shift: The company is strategically shifting toward corporate clients (currently 51% of business from major chains like Titan, Malabar) from unorganized jewelers to improve cash flow cycles. Target is to increase corporate share to 65%.

New Subsidiary Formation: Received board approval to establish a wholly-owned subsidiary to diversify into:

  • Manufacturing and trading of jewelry across gold, silver, diamond, precious and semi-precious stones
  • Both B2B and B2C channels, initially focusing on online B2C
  • Products in affordable range (around ₹50,000) including 9-karat gold, lab-grown diamonds (CVD), silver, and platinum
  • Separate from existing 22-karat mangalsutra and bridal jewelry business
  • Expected timeline: 2-3 months for incorporation and launch

Bridal Jewelry Segment: The newly launched bridal jewelry segment has reached approximately 10% of manufacturing volume within 6 months. Management expects this segment to grow significantly and potentially match core business in 2-2.5 years.

Operational Details

Business Models: The company operates two business models:

1. Outright sales: Revenue includes material cost + labor (approximately ₹812 crores in Q2)

2. Job work: Customer provides gold in advance, company charges only labor (approximately ₹5.5 crores in Q2)

Inventory Management: Maintains approximately 400 kgs gold inventory with minimum 30% hedging through gold metal loans and MCX hedging. Advanced gold from customers also acts as natural hedge.

Capacity Expansion: Manufacturing capacity increased from 2.5 to 4 tonnes, requiring additional headcount. Employee costs increased due to hiring more designers and karigars for bridal segment expansion.

Award Recognition: Company received "Mangalsutra Manufacturer of the Year Award" at India International Jewellery Awards.

Cash Flow and Working Capital

Management identified cash flow improvement as top priority. Working capital increased by approximately ₹152 crores in H1 FY27 due to:

  • ₹49 crores increase in inventory
  • ₹121 crores increase in trade receivables
  • ₹18 crores decrease in payables

The shift toward corporate clients is expected to improve cash flow cycles by 1.5 times through faster payments and efficient inventory turnover.

Growth Outlook

Management expressed strong optimism for Q3 and Q4 FY27 citing:

  • Massive order volume from corporate expansion plans (80 new showrooms pipeline)
  • Wedding season momentum post-Diwali and Dev Diwali
  • Strong relationships with major corporate retailers as "strategic vendor partners"
  • Historical CAGR of 41% revenue growth and 49% PAT growth between H1 FY25 and H1 FY27