Please note that this conference is being recorded. I now hand the conference over to Mr. Parth Patel. Thank you, and over to you.
Thank you. On behalf of MUFG Intime, I welcome you all to Sky Gold & Diamonds Limited, Q2 and H1 FY 26 earnings conference call. On the management side, we have Mr. Mangesh Chauhan, Managing Director, Mr. Siddharth Sipani, Chief Financial Officer. I hope everyone had an opportunity to go through our investor deck that we have uploaded on exchange in the company's website. I would like to mention a short disclaimer before we begin the call. This call may contain some of the forward-looking statements, which are completely based upon our belief, opinion, expectations as of today. These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, now I hand over the call to Mr. Mangesh Chauhan. Over to you, sir.
Thank you, Parth. Good evening, everyone. Thank you for joining us today as we discuss our Q2 FY 2026 quarterly performance. In the current quarter, company recorded its highest ever quarterly revenues and PAT, showing resilience and strength. Revenue for the quarter stood at INR 1,484 crores, registering a growth of 93.1% year-on-year. PAT stood at INR 67 crore, registering a remark growth of 82% year-on-year. Volumes have been increased to 544 kgs per month for this quarter, registering a 20% growth versus Q1 FY2026. Despite the elevated gold prices, Indian consumer has been resilient and continues to stand strong in the festive season.
The demand for gold is not dampened. Instead, people are adjusting budgets by exploring lightweight designs, lower carat gold like 9 ct, 14 ct or diamond stud pieces. This was reflecting on our quarterly performance as well, as now 18 ct business stands at 7%. Studded business has been now doubled to 1.5% of total revenue. Originally dismissed as a poor investment, lower carat gold jewelry is now being seen as a practical and stylish choice for daily wear. The mindset among young buyers is clear, jewelry is meant to be worn, not locked away. 22 ct continues to be favorite of the Indian consumers.
We can simultaneously say a shift from unorganized sector to a organized sector, as organized players are becoming innovative, providing convenient installment or gold exchange system, schemes, lightweight machine-made jewelry, tapping into e-commerce and expansion of stores into untapped market in tier two, tier three, tier four areas, thus ensuring higher than industry growth. Today, jewelry is not just a culture, cultural enamel, but also a fashion statement reflecting individuality and style. At Sky Gold & Diamonds Limited, we remain committed to blending this timeless heritage with contemporary design and craftsmanship. Our business model, operating on B2B platform, enable us to serve a vast network of leading jewelry retailers and renowned brands, making our products available in over 2,000 showrooms across India. The growth is a testament of our operational efficiency, customer trust and ability to adopt evolving market needs.
Discussing our performance this quarter, currently our advance gold model stands at 7% in Q2 FY26. We have improved our working capital day cycle by seven days in September 25, compared to March 25, on the back of the better inventory management, Q2 FY26, compared to last year. This quarter, we have successfully completed the final transition for Sweet Bengal Private Limited. This business will adopt 100% advance gold business, which is expected to strengthen our working capital cycle. This company has tax incentive benefits under Section 115BAB, resulting in improved PAT margins. To further expand our customer portfolio and deepening market penetration in the high-growth traditional jewelry segment, we have entered to a non-binding term sheet to acquire a majority stake in Shri Rishabh Gold, a reputed Mumbai-based jewelry firm.
This acquisition marks as a Sky Gold & Diamonds strategy to establish India's largest and most trusted mangalsutra focused enterprise as Shri Rishabh Gold, known for its strong presence in the mangalsutra segment, brings with it a rich client base that includes one of the largest jewelry banks. This client relationship will be strategically onboarded by Sky Mangalsutra, Sky Gold & Diamonds. To expand our international footprint, we have established a new B2B sales office, Sky Suit Jewelry Trading LLC in Dubai, UAE. This move is aimed at strengthening our foothold in the Middle East, a region identified for its robust demand for premium jewelry, particularly in UAE. The strategic presence in Dubai position us closer to key markets and enhance our responsiveness to the regional demand.
I am pleased to share that our exports have doubled this quarter, reaching around INR 150 crore, reflecting the early success of this initiative and reinforcing our confidence in continued global growth. To support our growth, we have strengthened our team by promoting Mr. Siddharth Sipani as CFO, who previously headed the finance department as a group finance controller and brings over 16 year experiences of expertise in finance and accounts, global fundraising, due diligence, compliance, auditing across diverse industry sectors. This will help me to focus on strategic business initiatives. In order to strengthen our brand, we onboarded Mr. Virupakshi Kole as Independent Director, who headed gems and jewelry segment for Kotak Mahindra Bank. He brings with him 36 years of extensive banking expertise across different banking verticals.
During the quarter, we reinitiated our GML program. The program is taking longer time than anticipated due to delays in documentation, supply constraints. This initiative marks a significant step in optimizing our financial structure, as GML offers a lower cost of alternative to traditional working capital facilities. Our target is to scale up GML utilization going forward, reinforcing our commitment to prudent finance management and operational eligibility. During the quarter, we realigned the accounting policy for depreciation across Sky Gold Group. The same has been realigned with WDV to SLM, so far, so as to better match the reservation expenses with the expected pattern of usage of assets. This change has resulted into currently half year PAT to be higher by 0.00808%. I will discuss our Q2 H1 FY 2026 financial performance.
The consolidated revenue for the quarter stood at INR 1,484 crore versus INR 768 crore, thus registering a growth of 93% year-on-year. The gross margin was 8.2% as compared to 6.5% on Q2 FY25. EBITDA for the quarter was INR 99 crore compared to INR 38 crore, showing a growth of 157%. EBITDA margin for the quarter stood at 6.7% as compared to 5.1% of Q2 FY25, improved to 163 point basis on year-on-year basis. PAT for the quarter stood at INR 167 crore as compared to INR 36 crore in Q2 FY25. PAT margins for the quarter stood at 4.5% as compared to 4.8% in Q2 FY25, hence reducing to 0.26 basis on year-on-year basis. The consolidated revenue.
Moving to the FY financial performance, the consolidated revenue of H1 2026 stood at INR 2,615 crore versus INR 1,491 crore in H1 FY2025, thus registering a growth of 75% year-on-year basis. The gross margin is 8.1% as compared to 6.4% on H1 FY 2025. The EBITDA for H1 FY 2026 was INR 171 crore compared to INR 76 crore in H1 FY 2025, showing a growth of 121%. EBITDA margin for H1 FY 2026 stood at 6.5% as compared to 5.1% in H1 FY 2025, improving to 145 basis points on year-on-year basis.
PAT margins for H1 FY 2026 stood at INR 110 crore as compared to INR 57 crore in H1 FY2025. PAT margins for H1 FY26 stood at 4.2%, as compared to 3.9% in H1 FY25, hence improving 20, 34 basis on year-on-year basis. We have delivered a strong performance for H1 FY26 and remain on track to achieve our target revenue of INR 5,400 crore by 2026, driven by new client acquisition, operation efficiencies, and enhanced management capabilities. Now, I request the moderator to open the floor for questions.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all the participants that you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question.
We're not able to join the queue. Thank you. In the Q&A queue. Thank you.
Hello.
A reminder to all the participants that you may press star and one to ask a question.
The first question comes from the line of Chandan Mishra from Finvestor. Please go ahead.
Good evening, sir. First of all, congratulations on very good set of numbers.
Thank you.
Sir, my first question related to revenue sales from after acquisition of Ganna Gold, sir. How much contribution did Ganna Gold have in our revenue share?
We acquired this. We renamed it as Speed Bangle. We completed the acquiring August mid. We got 25, 30 days to work. We got 41 kg something sales in this quarter. Next quarter it will be 50 kg per month.
Your sir, 50 kg per month. Next question, sir, related to volume. Current volume of export order after establishing UAE official.
We already opened the way official opening was 7th, 8th November. We opened last month only in October. This quarter will be full plus sale will come, we reached INR 150 crore sales this quarter by numbers in by exports.
Sir, current run rate of volume, sir?
Volume, totally?
Yeah, total.
We have done a 554 kgs of volume per month basis versus 455, 454 kgs last quarter. We have grown by 20% in volume.
Are we on track to achieve 620 to 700 kg?
Yeah, we are on track. In the second quarter, Speed Bangle 50 kg per month will also be added, so we are on track to reach 630 kg in next quarter.
Thank you, sir. I will join the queue for further follow-up session.
Thank you. The next question comes from the line of Deep Shah from Equirus Securities. Please go ahead.
Hi, sir. Thanks for the opportunity and congratulations on strong set of numbers.
Thank you.
Sir, a couple of questions from my side. First is on the festive shift side. This time around, Navratri and Diwali were bit early, and when I see your export revenues, on a sequential basis, it was largely flattish, which means the growth was largely domestic business driven. Should we consider this time around, there was some pre-ponement in terms of revenue booking? Third quarter around, we should, on a sequential basis, should we see some moderation in terms of revenue? An additional question attached to it is around inventory. If you see inventory days has improved, is it again because of the pre-ponement of festive or am I missing something over here?
Again, about the first question that this quarter, Diwali was earlier, so we enjoyed the sales in September and on. This quarter we are having a good orders of wedding season is going on for January, February and on. This quarter, wedding orders are very nice placed by the customers. This quarter also is very good by volume also and revenue also. Again, the export side, we stopped the October month, we stopped direct export to the customers, and we told them that you can procure from the office. This was a transition period of 15 days. Now, from November month, they are taking directly from our office, the dispatches and all. You can see in this quarter, exports will be very good.
We direct export stop in October month for 15, 20 days. Again, inventory days is a normal, decent days, which it is not about the pre-dispatch or something. This will continue in next quarter also and coming quarter also. Inventory days will be at this run rate only because we have the ERP system and we have done better in the inventories aligning and on. You can see revenue for next quarter. Marriage season is very good. Export, you will see the offices starting from October month. We have officially opened on seventh or eighth. We have kept the opening there and our client, all the bosses of the corporates also visited our. They have given the testimony also for us. November, this quarter, the export sales will be very good.
Okay. On a sequential basis, this quarter around, we did INR 300 crore of top line on consolidated basis. Next quarter onwards, third quarter onwards, should we see sequential growth in this INR 1,500 crore revenue base as well? One more thing to it, any update on revenue guidance? We have seen a very strong first half of the year. What will be the guidance for 2026 and 2027, both on top line and margin?
We cannot talk on the numbers perfectly, we are not allowed to talk, but.
Okay.
We are very good, and we are expecting Q3 to be the best of our quarter, this quarter, on the revenue side and the volume also. Export, you can expect 10%-12% of the overall sales from next quarter onwards, and again going ahead to 15%-20% by 2027 March.
Any update on guidance for 2026 and 2027 top line and margin guidance?
Already we have given the guidance of INR 5,400 crore and INR 7,600 crore, and a PAT margin of 4.25%. 4.25%, we will be conservative, saying the 4.5%. Yeah.
Okay, thank you.
Thank you. The next question comes from the line of Palash Kavale from Nuvama. Please go ahead.
Yeah, thank you for the opportunity, sir, and congratulations on very good set of numbers. My first question is on margins. What was the driver of such a good margin expansion, and is this sustainable?
You can see we have improved our gross margin by 0.20 basis. Our advanced gold business has improved from 5% to 7%, and our studied natural diamond jewelry has gone up from 0.7% to 1.5%. It is double the sale in this quarter. That's why our gross margins has gone up.
Okay, sir. Sir, again, on PAT, if I look at your PAT margins, for this quarter, PAT margins are already at 4.5%, and gold metal loan has not started kicking in. Do you expect these margins to go up going forward again? Because the contribution from advanced gold and studied business will also increase. Is that the right assumption?
We have implemented 8%-10% advance gold business. The little bit impact is there of GML in this. 8%-10% loan is shifted to gold metal loan. Again, the depreciation format has been changed. That's why 0.10 basis was the format impact, because we have leaned on WDV to SLM system. Again, some GML benefits is yet to come. 60%-70% is going to shift in two quarters or something, because that process is going slowly because there is some availability concerns and documentation process going on. Other than that, you can assume we can be at 4.25 points, conservative 4.3 points, and GML benefits is still yet to come, little bit.
Okay. Yeah, and sir, will we see more acquisitions coming in? Because there might be more consolidation happening in the industry as there is a shift from unorganized to organized. Are you looking at more acquisitions going forward?
Right now, there is no need for any acquisition in the company for coming forward two to three, four years, because already we have all the products on board. We are into 80% product, which is holding the retail store. We don't want to be 20%, 25%, which are very heavy, which are bridal jewelry or Kundan Polki Jewellery, which is not our inventory, which are INR 5 lakh, INR 10 lakh, INR 15 lakh inventory. Again, we were lacking [the niche] , so that's why we done a small acquisition, small company, because to onboard the largest retailer of the industry, which this company holds. I don't think there is any acquisition plan in future for two, three years.
Okay, sir. Sir, again, on the gold realization, if I consider your Q2 realization and just calculate on the basis of 900 kg per month that you guided for next year, your revenue looks very big, that is very big from your guidance. Even if I consider some advanced gold business, contribution going up, still INR 7,600 looks lower than because of the gold price rise. How should we look at this?
This is the last quarter exit quantity we have told, 650 or something kgs, and exiting in the March quarter. We have taken an average rate of INR 90,000-INR 95,000 based on the. Let's see how the rates go, then we have taken a conservative number, and we'll stick to that, and let's see how the gold rates goes. We have taken a conservative number, and 650 is our exit number for March quarter.
Sir, I'm talking about next year. Next year, you have guided for 900 kg, right?
Yeah. We have taken the average rate of INR 90,000-INR 95,000. If rates goes up and stand to INR 1,20,000-INR 1,25,000, then the numbers will go up. Let's see how the gold rates go, it's come down or whatever, how it plays.
Okay.
When the stability come, but we every time take the conservative number, and we'll stick on to 7,600.
Okay. Sir, any data on number of pieces shipped? As your product mix changes, I think, amount of gold required would be lesser for lower caratage ornaments, number of pieces shipped must have grown higher than the gold volume. Is that assumption right?
I remember number of, what you are telling?
Pieces.
Pieces. Okay.
Yeah.
Okay. Lower caratage, lower caratage is very low volume. You can see India, 80% is 22 ct, 15% is 18 ct, this 9 ct, 14 ct is below 1%. It will take time to grow, five to 10 years to come up at 4%, 5% of the sales. Right now we are at 14%, 15% on 18 ct sale 80% at 9, 22 ct sale. This 9ct and 14 ct volumes are very low. It's growing up, it will take five years to grow. Again, 22 ct is the major leader in India.
Okay, okay. Sir, last question, how do you see gold prices in next 1 year?
I think we are seeing from last 20 years, we have seen a huge amount of investment by route of ETF and Sovereign Gold Bond, which was not there five years, 10 years back. ETFs was not there so much. ETF is buying like 150 tons-200 tons per year, and central banks are buying. I think gold is, I think will appreciate it. I am seeing in next three to four years, gold appreciating by 20%-25% yearly basis.
Okay, sir. That's it from my side. Thank you for your answers and all the best for upcoming quarter. Thank you.
Thank you.
Thank you. The next question come from the line of Sunil Jain from Nirmal Bang Securities. Please go ahead.
Yeah, thanks for this opportunity and congrats on good result. Definitely we are seeing some improvement in the inventory, but still the working capital, this operating cash flow continue to remain negative. It's over INR 100 crores. Can you give any indication when it is likely to neutralize or come into positive?
Surely we will be cash flow positive after 27 March. We'll be short in 27 March by INR 70 crore, INR 80 crore, INR 100 crore. That will, we have already raised the dates for that. We'll be surely cash flow positive after 27 March, when our cap will be above INR 300 crore and above.
You want to say 26 will be negative and 27 will also be...
Seven March, after 27 March, we'll be positive 100%.
Okay. Okay, fine. This metal loan is this likely to help it to improve this negative cash flow, and how much it can improve?
Gold Metal Loan is just a change from CC limits to cash limits to gold metal. It will not change the cash flow, structure, but it will help us to reduce our, the interest cost and borrowing cost.
Okay. Okay, okay. The advanced metal, that is.
Yeah, yeah.
That's the, basically job charges, not the full revenue?
Yeah, only job channel, that will again help us to improve our working day cycle and cash flow positive. That's why we are telling that we are targeting to be at 10%-12% by 27 for advanced gold business, and that will again help us to reduce our working cycle and we will be cash flow positive by 27 March. Again, export business is as of later, less credit and that will also help us to improve our working cycle. Advanced gold, in advanced gold business, only the making charge is done by the billing, and that will only add up to revenue, that will help us to add our gross margin and EBITDA. That's why our gross margin this quarter also was better because of advanced gold business-wise.
Just to clarify, this Ganna Bangle was 41 kg per month in the second quarter, and this will increase to 50 kg per month?
Already we got 25, 30 days to work after acquisition. We have done 41 kgs in 25-27 date, but average will be per... Next quarter, 150 kgs will be added.
Okay. 14, we had only, 21 days consolidation in the-
25 days, yeah. Consolidation was, two months, but we got 25 days where we had transition period and all.
Right. Okay, sir. Thank you very much.
Thank you. The next question come from the line of Smith Gala from RSPN Ventures. Please go ahead.
Thank you for the opportunity. Congratulations on a good set of numbers. I just wanted to understand more about the gold metal loan. How does it work? What sort of margins does it require? What sort of limits do we get? What is the maximum debt we can get on so on the leverage that the balance sheet will provide us?
We are in the net debt of INR 450 crores, we can go up to 70%-75% or 80% of limit, that is INR 350 crores. That will help us, where gold metal is available for 3%-3.5% of interest cost, and other expenses will come up to 4% versus 9.5% for the CC limits. We'll save 5.5% of interest going ahead on the borrowing cost. We can go up to 75%-80% of the limit of gold metal loan, and we have to keep a 10% margin for that to avail from the CC limit we have.
We can, if we have INR 350 crore of limit of gold metal loan, we can use up to INR 300 INR 310 crore of, INR 320 crore of gold metal loan. Again, we can improve 0.25 or 0.2 basis of that margins when we avail. Already we have availed 8% of gold metal loan in this quarter. That's why our little bit that margins have improved, but coming quarters, we will be availing the other. We are saying it from long time, I think, but, in this point, we are little bit delayed because of the availability and documentation and all, and, there is a process and availability, sometime availability scarcity is there, so we have to go up again to the CC limits and all. slowly, we go up to GML by 75, 80%.
Just I missed it. Just to reconfirm, what will be the total debt which can take with gold loan and the other debt which we can take on our balance sheet?
I will repeat from, if our debt is INR 450 crore, we can go up to 80% of INR 450 crore to gold metal loan, which will be approximately INR 330 crore or INR 350 crore.
On the-
So-
I am talking about-
Total
total debt.
Yeah.
With gold metal loan and other debt also. At the moment, INR 450 is a net debt.
Yeah.
where this 450 number can go maximum?
80% we can avail gold metal moan, 20% banks keep a gap of CC limits. I hope you understand. 80% of the limit We can convert into gold metal loan. Whatever limit we enjoy, 80% we can shift it to gold metal loan.
Yeah, I'm talking about the limit. What is the limit that we enjoy?
Yeah. I will add. At this point of time, we have got INR 170 crore of sanctioned GML facility. We are negotiating with other bankers as well to sanction the GML facility. We expect that this INR 170 crore, considering the current set of bankers, can go up to INR 350 crore, that change in the banking terms takes some time, the talks with the bank is ongoing. I hope I have answered what you were trying to ask.
Yeah. Next question.
Thank you.
From my side is, how is the progress on the new facility that we are developing, going on? Yeah.
We are planning to start the construction of this facility in April 2026, and it will take three years to make the facility. In 2028, we are planning to open, end of the 2028, when our 1.2 ton of facility will be exhausted. Personal planning process, we are taking the quotation and all, it will take four to five months to plan, and we are planning to start making the facility from April 2026.
To manage the funding, et cetera, for the construction, are we on track for the? What are the plans for funding for the same?
We'll need INR 150 crore for construction basis and INR 100 crore for furniture, fixture and machinery, which will be needed in 2028. In three years, we'll put INR 50 crore from internal across, as we are expecting INR 50 crore cap for each, in each year, because so much acquisitions we have done and again, new products we have started. We are expecting, we have onboarded Shri Rishabh Gold also and, which is also an advance gold model, Wheel Bengal also. What we have given guidance, we are expecting INR 50 crore extra profit each year. From this, we'll fund our construction part. In three years, we'll, every year we'll remove INR 50 crore and invest in that, and in 2028, we will need INR 100 crore for furniture, fixture, and machinery.
That is when we'll open after the 18 floor, we'll open nine floor first, and in four years we'll open remaining nine floors. we'll take term loan for that furniture, fixture and machineries. that interest cost will be on the bench, but our sales will be 1.5 ton or 2 ton that time.
One final question from my side. We have enabled a higher borrowing resolution in the board meeting, so what was the rationale behind it?
It is more to do with the operational part of it, because as per the Act, we need to have the approval of the shareholders per se, and that's why we have gone for a higher value per se, because this is from, more from a long-term perspective.
Okay. Okay, thank you. I'll join back the queue. That was it.
Yeah.
Thank you. The next question comes from the line of Ankush Agrawal from Surge Capital. Please go ahead.
Yeah. Hi, sir. Thank you for taking my question. Sir, can you give a split of the volume that we have done during the quarter between standalone export, Star and Sparkling? Ganna, you have told that you have done 41.
Yeah. In terms of volume, we have totally done 544. Out of that, in Sky it is 400 odd. In Star and Sparkling, it is 55 each.
55 each?
Yeah.
Okay. Out of this total, how much would be export volume-wise?
In terms of export, since export is 10%, I don't have that number, but broadly it should be close to 40 kgs per se.
40. Okay, okay. That was all. Thank you.
Yeah.
Thank you. The next question comes from the line of Agastya Dave from CAO Capital. Please go ahead.
Am I audible?
Yes, sir, you are audible to us.
Thank you very much for the opportunity. Excellent execution, sir. Your numbers have been very, very good. Sir, I had a question on CapEx, which you have answered. The only other question that I have is, when the results came out, last quarter, there was a lot of selling from the promoters. It was executed in a very distractive manner. It was done very aggressively and it completely decimated the stock price for a few months. Sir, it's your shares, I don't have any say in that. Is there any other plan, sir, another round of selling from the promoter side, or are we done for the time being?
We have already done for two, three years or five years from here. We have appointed a good branded merchant banker for the execution of last two quarter before, but there was some execution lack from the merchant banker side.
Right.
I accept that and apologize for that, but there is no plan for...
It's not your fault. It's not your fault, sir. If the execution, screwed up.
I understand. We apologize again, and there is no plan for three to five years for any dilution from the OFS also, and for the dilution also, because we are nicely funded.
Right.
We'll develop this facility from extra, what we have guided the PAT, we'll make extra. We are expecting good PAT extra from these three years with the acquisition we have made, and we'll take out every year 50 crore fund from each year from this extra income we'll make.
Right
I n deploying that. There will be no outflow from the guidance PAT, we assure that.
Understood.
Again, the... Yeah, this is the...
Understood. Just, just for, again, just for the sake of repetition, you said INR 150 crores will be the total Capex for the new facility, and it will be INR 50 crores per year for the next three years, right?
Yeah, yeah. 26, 27, 28.
Perfect, sir. Thank you very much, sir, and all the best. Sir, again, sir, on the operational side, the execution has been very, very good. Congratulations on that.
Thank you, sir.
Thank you, sir. Thank you, sir.
Thank you. The next question comes from the line of Deepanshu Suman from Sattva Ventures. Please go ahead.
Hello, sir. First of all, congratulations for fantastic result. I think half quarter-on-quarter, we are executing very well.
Thank you very much, sir. Thank you, sir.
Double check, that industry has declined by about 15%-25% in terms of volume, and we have increased by almost a similar rate. What kind of contribution are we getting from the new clients, what we have acquired in last few months, like Indriya, Aditya Birla, The Indriya Guy, the CaratLane, and Reliance and P N Garg, et cetera. What kind of the volumes these guys have started to contribute?
Again, CaratLane is at 10 kg per month, 10-12 kg, Aditya Birla started with three to four kg per month. Reliance is yet to start because the process is getting over and orders are getting to come, because we are already onboarded, we have done the agreement phase and all. P N Garg also, we are at, I think, six to seven kg per month, started from one to two kg and now we are six to seven kg. We are getting the volume from the new client also, and the existing client is the major leader to give this growth and all. We have, we are onboarding new clients every quarter, this is also helping us to gain the volume and existing client also help taking the lead.
Okay. can you give the number for your top three clients, how much they are contributing in percentage and how much are coming from top five?
T op three is 25%-27%, and top five will be 30% or 32%, something.
35%.
Okay. The top five guys are contributing what? 35%.
32% . 32%, 32%-35%.
Okay. Okay, understood, sir. On this new acquisition, what we have done for this Rishabh Gold, it seems that you have acquired 51%. There are two parts on this. One thing, what I saw that this guy does about INR 49 crores of revenue annually, but about INR 3.5-INR 4 crores of EBITDA. On Advance Gold business, why the EBITDAs are so low? Have we seen their numbers, et cetera? Why the EBITDA is so low? Because if they are doing Advance Gold, it should be higher.
Basically, with Sri Rishabh Gold per se, say we are expecting that the operational efficiency to flow in the long term, per se, that's why we have done this acquisition.
This is, this company has India's largest jewelry brand on board in this company, and as a volume of 40 kg, 50 kg of the largest brand. This will come under our umbrella, and, this will help us to improve our Advance Gold business much better.
Okay, understood, sir. Do we have any plans to increase the stake? Because we have acquired 51%, are there any plans that we can go to, say, 100%?
Yeah, we have just acquired. This will take also three, four months. Let's we work for one year and we'll see in future we'll acquire 100%.
Okay, the promoters are intending to sell up to 100% also?
In future we'll take the decision. Right now they were intending to sell 51%, because small manufacturers are not able to cope up on the designing part and the larger facilities they want to work. We have a large facility at Sar Mangalsutra, and they will come to our facility. We'll shift this facility to our facility, and the larger brand of India will be on boarded by us.
Your Advance Gold business, I just missed the percentage. How much percentage of our revenue has come from Advance Gold? What is the exact number? I think it's about INR 20 crores-INR 22 crores there, Advance Gold.
In terms of Advance Gold business, in terms of volume, it is 6% of the total volumes.
Okay. In terms of our revenue?
Revenue, in terms of that... Mm-hmm.
You mentioned-
Around INR 8 crore in terms of absolute revenues.
Okay, INR 8 crores from Advance Gold has come in. So about-
Yeah.
say 60, 70 basis point and gross margin improvement might happen because of this Advance Gold. This is about.
Only already we were at 4%, we came up to 6%. That's why our gross margin has gone up by 0.2 basis.
Okay.
Because of the diamond jewelry sale has expanded and the Advance Gold business has expanded.
Understood, sir. Your INR 170 crore GML facility, what you have got, how much of that you have utilized, and at what rate this GML facility is coming in?
Out of INR 170 crores, currently we are utilizing close to INR 40 crores.
Okay.
It comes at a overall cost of 4%.
Okay.
At the time that came. Yeah.
Okay. so can we utilize the entire INR 170 crore in this financial year?
Yeah, we are targeting that. We will ramp up the GML utilization, and we expect to utilize INR 150 crore-INR 170 crore by the Q4 of 2026.
Are there some, say, hindrances in this? Because if the sanction has already happened, then we can move into that number quite fast.
Basically there are two hindrances. The sanction has happened, but the bank documentation is taking significant time. That's one thing.
Okay.
Secondly, there are also supply constraints, because we have to order the GML and they procure the metal from their suppliers in the. There are supply constraints.
Okay.
That's why the offtake has been a bit slower, as we have already indicated in the past, that we endeavor to increase the-
Okay.
Gold metal loan utilization, because it is a PAC accredited proposition. We are working on both fronts. One is, faster conversion of the current limits to GML facility. Parallelly, we are also talking to the current bankers as well, and trying to get the additional GML limits as well.
Okay, understood, sir. Last point from my side, we have announced a very large order from the Malaysian client. How we are moving on that, is it not going in the way what we were thinking?
No, it's going properly. We were just waiting for our Dubai office to be started, because there were some gold prices differences between India and Malaysia, and Dubai prices are same. India prices are much better, higher, $10-$15. Reducing the import duty also. That's why they were waiting for 25-30 days. We took some time, because Dubai has very strict norms to open the office, and we took three to four months. We were expecting two months, we took four months to open. Now from November, you can see the average of the Malaysian cargo, which was 30 kg or 35 kg, in two months, it will go up to 40 kg per month in this quarter. Because they were also waiting that we can avail the goods from Dubai office, that will benefit them.
The Dubai office was open in October month, but it was fully functional by 7th, 8th October, we kept the official opening also. I think we will be, by March, we'll be at, I think 50 kg, 60 kg or 70 kg per month. Let's see. Now the office has opened and very easily we'll operate, and it will be easy for them also to take the deliveries and all.
Understood, sir. That's fine. Just on this thing, on Dubai opportunity, what kind of, say, market size under this particular market has? I know that you can move from Dubai to other areas also, but in terms of just the opportunity size, what can be our opportunity size from this particular market in terms of the overall market, and how much we can reach into, suppose, say, three, five-year kind of time period?
For UAE market per se, we are very optimistic. We have identified UAE as a strategic growth market, our export target of reaching to 15%-20% was based off on our presence in this segment. Our strategy is to be closer to the customers per se, we expect that we are on track to reach 15%-20% of the sales per se by end of 2027.
Again, I will add that we will serve Singapore, Malaysian client also from UAE office, so we can serve all the UAE country and again Singapore, Malaysia. Our sales head and team has already started promoting our sales and we kept an event in UAE on 9th of November. We sponsored a yearly award, and we distributed award to all the major clients. We sponsored that, and 7th, 8th was the opening of the... We expect to be 20% by 2027 March.
Understood, sir. In a way, what you are saying that, there can be an export opportunity of about INR 1,500 crores as by 2027, and out of that, because you are opening this, new facility, so that might contribute 50%-70% of increment. Whatever the we export, we do, right?
15%-20% we expect by 2027 March. When new facility will be open in 2028, we'll analyze how we have reached, how the market is going, and we'll give the guidance after opening the new facility, what the export will play much in 2020, 2021, 2030. Again, this will be a play a key role in our vision and our dreams to achieve 4 , 5 ton in 2031-2032.
Okay. Thank you, sir.
Thank you. The next question comes from the line of Nilesh Jain from Astute Investment Management Private Limited. Please go ahead.
Hi, thank you for the opportunity and firstly, congratulations on a great quarter. I have only one question. Can you help me understand, why is there an increase in capital work in progress, by almost INR 100, INR 110 crores? Is it for the land, for the new plant, facility, or what is it?
Yes, this is for the new project. As of March 27, this balance was parked in other assets per se, because we have just given the advance while the final, sale agreement was not executed. This, the sale agreement got executed in the H1 of 2026, that's why the amount is showing in capital work in progress.
Okay, sure. Thank you so much, and I wish you all the best.
Thank you.
Thank you. The next question comes from the line of Sajal Agarwal from Clearview Equity. Please go ahead.
Yes. Sir, I have a couple of questions. The first one is regarding the EPS. As per the latest earnings release, your Q2 2025 EPS was 3.37 on a standalone basis, which has only increased by 6% to 3.59 in this quarter, while the PAT has increased by almost 53% over the same period. We know that you have diluted some equity around 10%-15%, but this is a huge difference. Can you explain the reason behind this?
EPS is based on the total shares outstanding per se. For the Q2, we have done the weighted average of the total number of shares which was outstanding. That is why you are seeing this EPS to grow only from 3.37 to 3.36, because of the increase in the base of equity shares.
Sir, is the increase this, at this quantum? Because, from my understanding, you have diluted around 10%-15% of equity over the last one year, right?
It is based on the number of shares outstanding and the total number of days it was outstanding. This is a weighted average per se. You are asking from Q1 26 to Q2 26, or which period are you asking?
Last year, Q2 2025 to this year, Q2 2026.
Q2 2025-2022. The impact was on account of the weighted average, and secondly, also on account of the bonus shares, which was which was approved in Q2 FY2025, per se. The impact of the bonus shares have also came. That is why there is a.
Okay, sir. Sir, my next question is, as in the last earnings call, we discussed that our margins and revenue dependent on both volume and price of gold. I just want to understand, what if the gold prices fall by, say, 20%-25% in the next two years, how it will impact our margin profile over the next two years? In case we say that the gold prices fall from INR 1 lakh to INR 80,000 over the next two years.
You can see our margins are on percentage basis, you are telling perfectly, gold is appreciating in the sales from last 15, 20 years. We see 10%-12% appreciation is there. Whenever it is a fall, gold falls by 5%-10%, this does not change our margin. When gold falls by 25% or 20%, we revise the quotation with the customers for six months or 12 months. Whenever gold comes to the normal price, we revise the quotation. Whenever it is, initially in COVID only, gold came down by 15% or 10%, I think. You can normally say, you can see gold is appreciating. Whenever gold, if gold falls by 20-25%, we revise our quotation with the customers. Customers also know that when the gold price comes down, the quotation will be revised.
Okay. That is the near term, you say one or two quarters when it impacts our margin, in that case?
Not because gold is, again, it is from INR 1 lakh to INR 1.20 lakh, INR 25,000, INR 30,000, moving around INR 1.20 lakh to INR 1.30 lakh. The 5%-10%, we, and customer know that there is no change in the quotation, and margin also will not change.
Okay. Thank you, [okay] . That's it from my end.
Thank you. Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Raj Saraf from Finvestor. Please go ahead.
Congratulations on brilliant sets of numbers.
Thank you, sir.
Sir, I have a question regarding the guidance, though you refrained from giving it, but what I mathematically calculate, our guidance of INR 5,400 crore and INR 7,600 crore for a 5.6 and 10.47 is given, for the gold price is INR 90,000-INR 95,000. Right now the gold price is above INR 1.20 lakh. If I calculate the revenue, even at 650 kg volume, which we intend to achieve by this financial year, and by subtracting 10% of Advance Gold business, which we might be intending to do by this end year. The revenue easily can close INR 8,000 crore. Even at the current run rate of INR 544 crore per month, we are even overachieving this year's guidance. How to look at the whole scenario, sir?
You can see we have taken the INR 90,000-INR 95,000 of 22 ct. Gold, you are telling 12, 20, like INR 20,000-25,000 is a pure rate. 22 ct, it will come to INR 1 lakh or something. There is a gap of 10%. I agree that gold has gone up, but carats are also changing. We have now 9 ct, also 18 ct percentage is also going up. We have conservatively taken INR 90,000-INR 95,000. Again, if gold goes in this moment and remain at higher level, your... I agree that the revenue amount will change, but again, some carats are changing, 18% is gaining the share. That's why we have taken the conservative number of 7,600 gold. If the gold does not go down and keeps on moving on this rate, 100% there will be change in the revenue.
Okay. Right now we are having capacity of, standalone, I think, 750 and subsidiary star and.
1.2 tons per month we have the capacity.
including Ganna Gold, sir?
Yeah, that's renamed as Speed Bangles. Including the three subsidiaries, we have 1.2 ton capacity, which can be utilized in 2028. Yeah.
Okay. Sir, the gold prices has actually exceeded, I think beyond everyone's expectations. How confident is the management to reach the target of 900 kg by FY 2027?
100% we'll reach because as we were also expecting that gold prices are going up, Second quarter we are expecting, we were also seeing that how the customers behave. Customers was buying very aggressive because of the gold prices going up. Earlier you can see when our parents were there, 10 years back, when gold used to go up, there used to be a slowdown of gold by 25%, 30% because parents used to say that gold price is high, we can buy after six months or 10 months. Nowadays, there is data available with every youngster, apps are available. Everybody knows that gold is an appreciating asset. Customers, when they have money in the pocket, they want to buy at that time only.
Buying was very aggressive at the Diwali time in the customer level and before Diwali also, because everybody is in that mindset that gold is going to appreciate for next year, from three to four years or five years, because of the central bank buying and ETF has also entered into market aggressively. Customer faith level has gone up with very much higher, because six years back, customers buy the jewelry for INR 1 lakh, now he's getting INR 4 lakh after cutting the making charges. In six years, 4x or 3x returns as given by the gold to the retail consumers, mostly to the ladies who are buying. They are very confident and faith level has gone up.
We are seeing very huge demand in volume also and revenue also. We are very confident we will reach 900 kg.
Sir, Ganna Gold capacity or businesses is entirely of Advance Gold biz?
Yeah, yeah, totally Advance Gold.
Okay, right now we.
Giving the speed and then.
Yeah. Right now, sir, we are doing 6% of Advance Gold business. Am I right, sir, if I perceive?
Yeah, yeah.
Yeah. Going forward, if you are guiding that INR 50 crore, 50 kg per month.
Yeah.
Is going to come from Ganna Gold, and the same rate will continue or even go further. That means 10% of our volumes are coming from Ganna Gold, and the 66% is already we are doing, Advance biz. Can I perceive that more than 15% is going to be our Advance Gold biz by this end year?
We are giving conservatively 10%-12%, because 50 kg we are sure from Speed Bangle , and again, how the volumes come in next quarter, so we can conclude the percentage. You can assume 10%-12%, 100%.
Okay, sir. Congratulations once again, sir, and very much happening to see you even increasing our volumes on standalone basis also, and that's what we are actually looking for. Thank you very much, sir. Congratulations for these numbers and even wishing you best for the future endeavors and even on your export and all acquisitions further. Thank you.
Thank you, sir. Thank you so much.
Thank you. Ladies and gentlemen, in the interest of time, that was the last question for today. I would now like to hand the conference over to management for closing comments.
Thank you so much to our shareholders for supporting us every time. We management assure you the performance we are giving from last two, three years and going ahead, and hope you are with us for a longer time. Thank you so much.
Thank you. On behalf of Sky Gold & Diamonds Limited, that conclude this conference. Thank you for joining us, and you may now disconnect your lines.