Q1 25/26

Aug 19, 2025

Quarterly report

Summary

Q1 FY26 total income rose 5.94% YoY, while EBITDA and PAT grew 57.07% and 64.73%, respectively, with higher margins. FY26 growth guidance is 25%–30%; a Q2 flagship showroom is expected to add ₹150 crore in B2C sales.

Ladies and gentlemen, good day and welcome to Khazanchi Jewellers Limited Q1 FY26 earnings conference call hosted by Kirin Advisors Private Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Harshil Ghanshyani from Kirin Advisors. Thank you, and over to you, sir. Yes, thank you. On behalf of Kirin Advisors, I welcome you all to the conference call of Khazanchi Jewellers Limited. From the management team, we have Mr. Rajesh Mehta, Chairman and Joint Managing Director. We have Mr. Vikas Mehta, Chief Financial Officer. Now I hand over the call to Mr. Rajesh Mehta. Over to you, sir. Yeah. Hello, everyone. A very warm good afternoon, and thank you for joining us today. It is my pleasure to share an update on our performance, strategic initiatives, and industry outlook. Our company, Khazanchi Jewellers Limited, founded in 1971 and headquartered in Chennai, is a trusted name in gold, diamond, and precious stones jewelry. With a legacy spanning over 50 years, with BIS Hallmark certification and recognition as an authorized dealer of India International Bullion Exchange, the company serves both B2B and B2C market. In Q1 FY26, we sustained healthy growth momentum with a significant improvement in our revenue mix compared to Q1 FY25. With gold prices raising, we strategically focus on lightweight jewelry, hollow jewelry, lightweight diamond jewelry, and traditional close-setting jewelry. These initiatives contributed to an improve in EBITDA margin from 3.53% in Q1 FY25 to 5.24% in Q1 FY26, while PAT margins rose from 2.41% to 3.75% during the same period. This reflects our continued focus on higher-margin business, driving both revenue, quality, and overall profitability. As you all know, the first season, Akshaya Tritiya, the sale was very good, and due to which, there was a raise in our margin. Over the last two years, we have delivered exceptional returns, with revenue raising from INR 481.82 crores in FY23 to INR 1,772.53 crores in FY25, reflecting a CAGR of 92%. EBITDA increased from INR 16.78 crores to INR 64.92 crores, delivered a CAGR of 97%, while PAT grew from INR 0.56 crores to INR 44 crores, an impressive CAGR of 44%. These achievements demonstrate our ability to scale while new efficiencies. We remain confident of sustaining this trajectory as we strengthen our market position, expand our retail presence, and deepen customer relationships. Our flagship showroom in Sowcarpet, Chennai, continues to be the key pillar of our B2B business, offering a curated selection and addition of new product categories and adding 100-plus new designs in our design library. At the same time, our company caters to bulk buyers and institutional clients nationwide, ensuring both scale and liquidity. Looking ahead, our flagship showroom, 10,000 square feet showroom in Sowcarpet, Chennai, slated to open soon, will mark a major step forward in strengthening our B2C presence. We see this as a catalyst for margin improvement. Now I come to the financial highlights of this quarter. In Q1 FY26, we reported total income of INR 403.82 crores, up 5.94% year-on-year. EBITDA grew by 57.07% to INR 21.15 crores, with EBITDA margins of 5.24%. Profit after tax stood at INR 15.15 crores, up 64.73% year-on-year, with EPS raising 64.52% to INR 6.12. These results clearly demo our ability to deliver growth with improved margins, even as several industry players face margin contraction. I would like to conclude our strong Q1 FY26 performance combined with our dual B2B, B2C strategy, upcoming retail expansion, digital innovation, and favorable industry reforms position us for sustainable growth and improved profitability. We are confident that the pace of the growth achieved over the past two years will continue, and we aim to build on this momentum in the quarters ahead. I would like to thank our shareholders, customers, and employees for this continued support. Thank you so much once again. Yes, sir. Should we open up for question and answer session? Hello? Yes. Okay. Thank you very much. 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 withdraw 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. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The first question comes from Mahesh, an individual investor. Please go ahead. Hello? Hello. Can you hear me? We can now hear you. Can you hear me? The volume is not audible. Yeah. Can you hear me now? Yeah. Yeah. So, as the company grows rapidly, what steps are being taken to strengthen the risk management in terms of gold price volatility, inventory control, and credit risk in B2B clients? That's what. As the company is growing and since the management has a wide experience with regards to it, the fluctuation of prices have been happening in gold from a very longer period. The management has a very systematic plan for taking care of that. Regarding inventory part, we have always taken a special care to check what is required in the market, and we manufacture things accordingly, which are of fast-moving and which are high in demand. Okay. Something regarding the credit risk from B2B clients? That's what. The average credit period for B2B client, the average, the stock inventory cycle, what we give them, and manufacturing period all work out to maximum of somewhere around 55 to 60 days. The credit period what we provide to our B2B clients is 2 weeks to the max average. Okay, 2 weeks. Got it. My next question will be, with rising urbanization and disposable incomes for the people, are you considering expanding your product categories, such as lightweight daily wear jewelry or new age designs to target younger demographics? Yes. We are working on it, and we have already started production of lightweight jewelry, and it has been on high demand among our clients. We have already started that, and we are catering all categories of clients. We have product range for all range of people, all clients, for working women, for marriages, and for all type of festivals. Okay. We are already starting entering into that segment. Got it. Yes. That's what. We are analyzing the market as and when the things are changing, our requirement of the clients are updated. We bring up the product so that we can improve our sales. Okay, got it. Fine. The next one will be, how is our company leveraging its position as an authorized dealer on India International Bullion Exchange, to enhance sourcing efficiency or manage costs? That's what. Being a member of India International Bullion Exchange, we are getting bullion as, and we are occupied, we have been selected as a qualified jeweler. So, there is an allotment of gold which is quite a little cheaper compared to the market. Okay. Okay, so that helps us for cost management and all. Yeah, obviously. Correct. Yeah. Yeah, for now, that is it from my side. Thank you. Okay. Okay, thank you. Thank you for asking. The next question comes from Palush Kumar, our individual investor. Please go ahead. Okay. Thank you for the opportunity. Sir, your company has demonstrated strong B2B traction with 29% year-on-year growth. So, tell me, how are you looking to balance your B2B scalability with higher margin opportunities in B2C without straining resources? That is what the main criteria for improving the sales in the B2B sector or in the jewelry industry is the designing part and the consumer demand. As the prices are increasing, we have already been into the manufacturing of lightweight jewelry and latest minimalist jewelries also. And we are already into the, what they say, bigger type of jewelry which are meant for marriages and all. So in that case, as the demand in the market for which product is improving, we are focusing on that production. And as we have a very vast experience, so all our designs are highly approved by most of the B2B jeweler. Okay. And sir, with this increasing demand for lighter Hallmark jewelry and transparent pricing, how do you plan on capturing the market share against larger organized players in the industry? There has been competition in the jewelry industry for always, but those who produce a better product which are highly acceptable among the customers, then they are continuously growing. That is what I think. Okay. And sir, with EBITDA margin improving to 5.24% in Q1 FY26, what is your medium-term margin guidance and which factors will drive the further expansion? That is what we have been focusing on the production of lightweight jewelry, and even on the lower-carat jewelry, as 18-carat jewelers have started coming up in the South India also, the demand is gradually increasing. The margins are quite high in that. We have been focusing on manufacturing of diamond jewelry also. So we are catering all type of customers from, what they say, our daily use jewelry and on higher segment jewelries also. So the margins will gradually improve. Okay. And sir, digital innovation was mentioned as a growth lever. If you could provide more clarity on the digital initiatives being implemented and their expected impact on sales and customer engagement, it would be really helpful. Yes, sir. The digital platform is gradually, the demand for online customers is increasing. We have already been into customers' purchase plan that they can save in multiple rupees and then get the gold at the end of the period. That we are doing it. On the opening of our flagship showroom, we are going to have an online presentation of all our goods, which are going to add up an additional sales on it. Okay, thank you for answering that, sir. I will join back in the queue. If I have any more questions, I will join in again, yeah? Sure. Thank you. Thank you. Before taking the next question, we would like to remind participants that you may press star and one to ask a question. The next question comes from Sanchita Sood with RoboCapital. Please go ahead. Hi. Thank you for the opportunity. My question was that, over the past three years, we have been growing at a CAGR of almost 90%. Going forward, can we expect the same growth rate for the next, say, two, three years? We have been growing with a faster pace, but conservatively, we define that we grow at a pace of 25% to 30%. Okay. Sir, you mentioned that we will be seeing margin improvement gradually. Would it be possible to quantify what kind of margin improvement we will be seeing and by when? That is what on opening of our flagship showroom, since we are going to have a better B2C sales, and that has a higher margin. Say, along B2C sales when we are going for diamond jewelry, jadau, kundan, polki, and all premium items, then the margins are around 13%, 13%-14%. So in that case, and we have been focusing on various other lightweight jewelry which are of high premium jewelry in our B2B segment also. So the margins are gradually going to improve. Okay. All right. That is all from my side. Thank you. Thank you. Thank you. A reminder to all participants that you may press star and 1 to ask a question. The next question comes from Dhruv with Tiger Asset. Please go ahead. Hello? Am I audible? Yes, sir. Yeah. Sir, first of all, congratulations on your gold trophies. My question is, on the press release, I have seen that there is a strong presence in southern part of India by the both operations in wholesale and retail market. Sir, can you give me the split of the wholesale and retail markets, like for the revenue side, for the Q1? Yeah. On an average basis, we have 90% of our contribution from B2B segment and somewhere around 10% into B2C segment. Okay, sir. Okay. Thank you so much, sir. That is my question. Thank you. Thank you. Participants, to ask a question, you may press star and one. The next question comes from Dinesh Sane with Invest4Edu. Please go ahead. Hi, can you hear me? Yes, sir. Hi, good evening, sir. Congratulations for good set of numbers in Q1. Thank you. My question was regarding your new upcoming showroom of 10,000 sq ft in Chennai. Can we know that the operations will be commenced? That is what, it will be shortly. We will declare the date of opening very shortly. Correct. In the last call you mentioned about it will be in Q2 FY 2026. Can we expect in this month or maybe next month? Yeah, yeah. We are working on it. There was some delays in approval, and since we are making it an exclusive showroom, initially it is taking up time, but it would be surely in the second quarter. Sure. Overall, the revenue which you mentioned of INR 150 crores for this showroom, can we expect that it will be the same revenue for FY 2026? Yeah, sure. Already, possibly we have. Yeah, we have defined at a very constrained level. We will surely be achieving better than that. Sure. One question is on the recent partnership. You have partnered with Malabar Gold & Diamonds. Can you specifically tell us what will be the impact on your B2B revenues? If you can quantify it. No, no, the revenue part and all, we cannot declare it, but we have just added him as our client. Sure. One last question from my end. Can you tell us about your plans to invest your increased profitability to expand your retail footprint over the next year, maybe 2-3 years? That is what, after opening of our initial flagship showroom and working with it and getting good numbers of revenue from that showroom, we have an expansion plan which we have already clearly defined. Sure. That is it from my end, sir. Thank you. All the best. Thank you. The next question comes from Palush Kumar, an individual investor. Please go ahead. Yeah. Sir, you have delivered a pretty good CAGR across revenue, EBITDA, and PAT over the last two years. Yeah As you scale further, what structural growth levers will help sustain this trajectory, and what do you see the inflection point for operating leverage kicking in? That's what, we have given a very good performance in past two years, but conservatively, we always define that we grow at the pace of 25%, 25%-30%. Okay. Sir, this upcoming 10,000 sq ft flagship showroom in Sowcarpet, it is expected to be a major growth catalyst. What is your broader roadmap for retail expansion? Do you intend to replicate this flagship model in other tier 1 and tier 2 cities and Yeah, we do. Yeah, we do have an expansion plan, but everything will be decided after opening of this showroom, and we get a good set of revenue numbers from this and later on. Okay. Sir, what incremental revenue contribution do you project from this format? That is what, conservatively, we define that we will have an additional B2C sale of INR 150 crores. Okay. Sir, with consumer preference shifting towards lightweight Hallmark jewelry, how are you innovating in designs and product categories? Yeah, we already have a design team who have been working on it, and day-to-day, we get lots of inputs from all the factories from which we are working, and we are getting a design update, and we are already into the production of lightweight jewelry. I can see there is an increase in ornamental segment, so by 88% year-on-year in Q1 FY26. What specific strategies or customer engagement initiatives are driving this growth, and how sustainable do you see this momentum in the coming quarters? We have improved and good customer base, and we have been producing goods which are in high demand for them. And gradually, we are focusing in production of lightweight jewelry. And we have improved in our marketing, so we have able to reach that. Okay, sir. I'll once again join back the queue. If I have any questions, I'll just join in again. Okay. Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star and one. The next question comes from Harsh with Shree NS Jewellers. Please go ahead. Sorry to interrupt, sir. Harsh has left the queue. We will move on to the next question, it is from the line of Prajakta Khadam, an individual investor. Please go ahead. Hello, sir. Very good afternoon. Good afternoon, ma'am. My question is, the company has achieved a strong PAT growth in Q1 FY26, and how much of the profitability improvement is structural versus seasonal? Can we expect similar levels going forward? Yes. There is always, in every quarter in South region, if you see, there is a season. In the first quarter, you can see Akshaya Tritiya, second quarter, there is Navratri and Rakhi, and third quarter, we have got Diwali, and fourth quarter, Pongal. So every quarter, there is a season, and along with that, marriage seasons are there. We have been focusing on the lightweight manufacturing and lightweight jewelry also. It would be equally distributed in all quarters. The growth will be the same as projected. Okay, sir. I have another question. With the retail showroom in Sowcarpet already playing a key role, how do you plan to replicate this model in other urban centers, and what criteria will guide your location strategy? That is what initially we have been, since we have been in this area for a longer period of time, we have plans to open our flagship showroom here. Based on the success of this flagship showroom, we will always expand as per the analysis of the management. Okay, sir. The jewelry sector is seeing a gradual shift towards the branded and organized players. What steps are you taking to strengthen Khazanchi Jewellers' brand recall and customers' loyalty? That's what, since we are there in the past five decades, we have been operating in this area. We have got a huge customer base and goodwill, and we have been following all the government norms, and we have been giving up all certified jewelries. In that case, we are always on the right path and growth. And sir, B2B sales remain the largest revenue contributor for our- Yes Khazanchi. And how exposed is the business to fluctuations in wholesale demand cycles, and what safeguards do you have to mitigate these risks? That's what, we have been manufacturing all different type of jewelries which are required by all our B2B clients. Based on their requirement and based on the experience of the management, it has always been accept, our designs have been widely accepted. We are also producing jewelries which are of high margin, and we have been on the marketing on day-to-day basis, and we are updating our designs accordingly. So, we are getting a better B2B client range, and our products are widely accepted. Okay, sir. And sir, our financials show a steady improvement in EPS. Do you have any plans to enhance shareholder returns through dividend or a buyback in these new term? Yeah, the management have some discussions regarding it. Not yet decided, but it will be updated shortly. Okay, sir. And sir, gold price volatility is a structural industry challenge. Beyond hedging, how are you planning to insulate your business model from such fluctuations? Perhaps through product diversification, branding, or customer financing schemes? Regarding fluctuations, the jewelry industry has been on a fluctuation segment from a very long time, and the management has a very wide experience of managing that. We have gotten what they say, as per the business model to reach our target, we have been always working on design. For our B2C expansion and good customer base, we have been working, making on marketing. Okay, sir. And sir, the company has shown strong margin expansion with EBITDA margin improving to 5.2%. What is your medium-term to long-term margin expectations or target? And what specific operational or product mix improvement will drive it? That's what the margins have improved since we have been. No, no, margins are improved, and for every quarter, we will be working at this pace, and margins are going to improve since we are going to produce, we are into diamond jewelry for B2B, and all premium segments also we have started in B2B. Okay, sir. As an organized retailer, semi-fiction rises in the jewelry sector. Competition is intensifying from both national chains and regional players. What differentiates Khazanchi Jewellers brand propositions, and how do you plan to gain a share in this competitive landscape? Anyway, we have a strong presence here, and all our products, what we have been manufactured is widely accepted by all our B2B clients. And we have been always understanding customers' requirements and manufacturing goods accordingly. So, the competition has been lasting forever in all sectors, but we have been overcoming with all our experience and our product line. And sir, digital innovation was mentioned as a growth lever. Could you elaborate on your digital strategy, and are you looking at e-commerce, omnichannel retail, or technology-driven customer acquisition models to expand beyond physical presence? Yeah, we have been, as the opening of new or flagship showroom, along with that, we are going to represent all our products online. For the development of B2B segment, we have been participating into various exhibitions, which are very popular in South India, and expanding our B2B presence. And sir, can you provide a revenue guidance for FY26? FY26 is going to be a very good year, as the demand in the first quarter, when even the prices are high, we were able to achieve an higher margin and good business. It is going to grow, the conservative basis, we can define that it will grow at 25%-30%. Okay, sir. Thank you, sir. That's it from my side, and all the best, sir. Thank you. Thank you. The next question we have from Palush Kumar. Please go ahead. Yeah, thank you again for the opportunity. Sir, I have some last couple of questions. The first one is, are there plans to diversify into adjacent categories, such as silver, platinum, or even luxury watches to capture wallet share and mitigate concentration risk on gold? Yeah, the company do have plans to expand to silver jewelry, as the demand for silver jewelry is gradually increasing. But the major portion would be gold only. We will be focusing on gold only. Okay. Sir, with the profitability improving sharply, do you have plans to reinvest aggressively into growth? Buying new stores, branding, or digital platforms? Or will the company focus more on strengthening balance sheet metrics and shareholders returns? That is what, whatever the profit-making is reinvested into the company only, and the company is always focusing on expansion plans, and it is going to expand its digital presence after opening of the flagship showroom. Okay. That is it from my side, sir. Thank you so much. Thank you. A reminder to all participants that you may press star and one to ask a question. The next question comes from the line of Mahesh, an individual investor. Please go ahead. Hello. Can you hear me? Yes, sir. Hello? Yes. I had some couple of more questions. First of all, could you elaborate on how this strategic shift is impacting your overall working capital requirement and profitability profile? That is what requirement of working capital, we have been always working with the existing capital only. Whatever the earnings, the company reinvests into the, for the betterment and progress of the company. Okay. My next question will be like, our upcoming flagship showroom, which is of around 10,000 sq ft in Ashok Nagar, Chennai. What incremental revenue contribution and margin uplift do you expect from this expansion? That is what I defined you. It is on constraint basis. We see that there would be a B2C sale improvement of somewhere around INR 150 crores, and the margin ratio, what we are predicting there is somewhere around 13%-14%. Okay. Gross margin. Got it. Okay, okay. Gross margin. Got it. Yeah. If we see that there are like, CAGR of revenue, which is at around 92%, and at CAGR around 140% to 144%, for the last three years. How do you plan to sustain such high growth rates at, base, like, base gets larger? What will be the key driver moving forward? Yeah, we have been performing good, and we have got good results for the past two years. But on the constraint basis, we always, as a management, we define that we are going to grow at a pace of 25%-30%. If something is better in there, it is always there. Okay, got it. Fine. Thank you. Thank you. The next question comes from Priya Jain with Green Capital. Please go ahead. Priya Jain, your line has been unmuted. Please go ahead with your question. Yeah. Hi. Am I audible now? Yeah. Hello. I am actually new to the company, but very interested to track, looking forward. I have few questions with me. With rapid urbanization in tier 2, tier 3 cities are becoming more jewelry consumption now. How does Khazanchi have plan to expand into this geographies, and what would be your preferred entry mode, like company-owned showrooms or franchises? That is what immediately since we have a very strong presence in the area where we are here we are going to open our flagship showroom. Based on the success of this flagship showroom, we are going to diversify mainly in this southern part of Tamil Nadu. Are you, like, exploring a multi-brand strategy to address both the premium and mass market segments? Organized player are increasingly, rapidly launching sub-brand to tap into different price point and demographics. That is what we have been already into the both premium segments and regular items. We are into both. We have been supplying premium items to most of the B2B jewelers also. On a future, after opening up our flagship showroom, expansion plans will be declared accordingly. Also, you have a good, balanced growth. Do you see opportunities for inorganic expenses such as acquiring regional jewelers to expand retail presence faster? Because, penetration can happen that way. That is true. The management always defined a constraint level of growth, but expansion plans are short there. Mm-hmm. Gold is an investment is deeply embedded in Indian household. Is Khazanchi exploring gold savings scheme, exchange programs, or digital gold offering to build recurring customer engagement and deepen Yeah the retail relationship? Yeah. Already we have a purchase plan that the consumer can purchase gold and convert fixed prices accordingly, and then finally, on renewal, they can buy gold. Also, sir, we have upcoming wedding seasons, which is a festival in India, as you know. Do you think this monsoon, heavy monsoon will affect in any way? No, always- In a- the second quarter is always good because lots of marriages are happening and various festivals are also there. It is always a better route. Yeah, but do you think this harsh monsoon will have any adverse effect? I don't think such, because there is not much impact of the monsoon here. Because marriage season, everybody is already, they purchase jewelry based on their savings, and they do not depend upon the constraint imitating them. Mm-hmm. Any focus on catering, like Gen Z people? Any particular brand you would launch or something? Like, we have a lot of fancy jewelry brands coming out and which sells gold jewelry and, like, silver jewelries, but in a very fancy, very Gen Z focused. Are you planning to do something like that? We have been working with all our traditional jewelry and all lightweight jewelry which is required for both our B2C and B2B client. We are majorly focusing on that, and we have good volumes for that, good demands for that. Mm. Good to know, sir. I think that's from my side. All the best. Thank you. Participants, to ask a question, you may press star and one. Thank you. As there are no further questions from the participants, I would now like to hand the conference over to Mr. Harshal for closing comments. Yeah. Thank you, everyone, for joining the conference call of Khazanchi Jewellers Limited. If you have any queries, you can write us at research@edelweissfin.com. Once again, thank you for joining the call. Thank you so much. Thank you. On behalf of Kirin Advisors Private Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Thank you.