Ladies and gentlemen, good day and welcome to Q2 and H1 CY25 earnings conference call of International Gemmological Institute, India Limited, hosted by MUFG Intime. 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 this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumeet Khaitan from MUFG Intime. Thank you, and over to you, sir.
Thank you, Palak. Good evening, everyone. I welcome you all to the earnings conference call to discuss Q2 and H1 CY25 results of International Gemmological Institute, India Limited. To discuss the result, we have from the management Mr. Tehmasp Printer, MD and CEO, and Mr. Eashwar Iyer, CFO. They will take you through the results and the business performance, after which we will proceed for question-and-answer session. Before we proceed with the call, I would like to mention that some of the statements made in today's call may be forward-looking in nature and may involve risks and uncertainties. For more details, kindly refer to the investor presentation and the other filings that can be found on the company's website. With this, I now hand over the call to the management for their opening remarks. Thank you, and over to you, sir.
Thank you, Sumeet. Good evening, ladies and gentlemen. I would like to welcome you all to the Q2 CY25 earnings call. I trust that everyone has had a chance to review our financials and investor presentations, which have been made available on both the stock exchanges as well as our company website. It's a pleasure to connect with you all and share insights into our business strategies and outlook. To recap, we are the largest independent accreditation certifying services provider in India, with over 50% market share. Globally, we are the second-largest player, with 33%, and in lab-grown diamonds, we have over 65% of the global market share in certification. We serve nine out of 10 retail jewelry chains in India, and we expect to continue to leverage our position to expand our global presence and establish IGI as a laboratory of choice to the large retailers and brands.
We are present across 10 countries, and we have 31 laboratories, 12 in-factory laboratory setups, and 18 schools of gemology. We are present across the entire jewelry value chain. Our multiple service delivery formats are in the form of IGI laboratories, in-factory laboratories, mobile labs, which essentially strengthen our customer relationships and drive a distinct advantage for the company. Our school of gemology provides awareness, knowledge, and information to help us drive the brand awareness, market expansion opportunities, and new customer acquisitions. I'm happy to report that the company has seen a strong growth momentum across all its business segments in Q2 of 2025 as compared to Q2 of 2024. The business, on a consolidated basis, has done exceptionally well, with 16% growth in revenues from operations and 37% growth in EBITDA on a year-on-year basis.
The business has delivered a volume growth in Q2 2025 with 3.03 million reports, a 21% growth over the previous year. The business has seen strong growth across its segments. Lab-grown has grown by 24%. Natural diamonds have grown by 14% over the previous year. For the first half ended in June 2025, the business has delivered revenue from operations growth of 13% and EBITDA growth of 23%. The volume over this period grew by 24%, with strong performance across all our business segments: natural diamonds, lab-grown diamonds, jewelry, and color stones. Going forward, we expect this demand to continue both across the natural diamonds as well as lab-grown diamonds. Further, with demand for jewelry certification on the rise, we expect the jewelry segment to drive a significant proportion of growth in the quarters to come.
Finally, with increasing adoption of lab-grown diamond jewelry in India, we expect the revenue from this segment also to increase significantly in the future. With the industry evolving at a rapid pace and certification becoming a key enabler of consumer trust, IGI is focusing on strengthening its leadership position by expanding its presence, embracing innovations, and enhancing the overall customer experience. As demand for both natural as well as lab-grown diamonds continues to grow, IGI is strategically positioned to capture the immense opportunities ahead. The company is also embarking on a digital transformation initiative as we seek to enhance the quality of our service delivery as well as reduce the turnaround time for our services. Overall, we are confident of maintaining the growth momentum, delivering revenue and EBITDA growth this year in line with our historical performance.
We remain committed to enabling growth for our partners, delivering long-term value to all our stakeholders. With that, I now invite our CFO, Mr. Eashwar Iyer, to take you through the financials and operations performance for the quarter. Over to Eashwar.
Thank you, Tehmasp, and good evening, everyone. Thanks for taking the time for joining today's conference call. As Tehmasp just articulated, we are extremely delighted to have each of you with us. As many of you know, our company follows a January to December reporting cycle, and we are therefore excited to present the results for the second quarter for calendar year 2025. I will start with an update of the quarter two performance before providing an update for the half-year performance as well. On a consolidated group performance standpoint, I'm happy to report that the group consolidated business has maintained a very, very strong growth momentum in quarter two 2025. In terms of revenue, certification income for the current quarter stood at INR 292 crores, which is showing a growth of 18% over the same time last year. Correspondingly, the volume growth was at 21%.
This was primarily driven by strong revenue growth across all our core segments, namely 14% growth in natural diamonds, 24% growth in lab-grown diamonds. Total revenues for the quarter, therefore, stood at INR 314 crores, registering a growth of 20%. In terms of reported volumes during the quarter, we delivered 3.03 million reports compared to 2.5 million reports in quarter two 2024, registering a growth of 21%. Driven by strong revenue performance, continued cost optimization in some of our global offices, we have delivered a PAT of INR 127 crores, marking a growth of 63% compared to the previous quarter. PAT margins stood at 42% for this quarter. EBITDA stood at INR 174 crores, reflecting a growth of 37% compared to the previous quarter. EBITDA margins stood at 58%.
Coming to the half-yearly update on a consolidated group performance standpoint, for the half-year ended June 2025, we have delivered 6.16 million reports compared to 4.97 million reports in the same period last year, marking a robust year-on-year growth of 24%. In terms of revenue, certification income stood at INR 588.8 crores, growing at 14%. This was driven by strong growth across all our key segments, be it LGD, which is growing 16%, natural diamonds 7%, and LGD jewelry 35%. Total revenues, therefore, for the half-year stood at INR 627.8 crores, registering a growth of 14% year-on-year. Driven by strong revenue performance and continued cost optimization, the PAT delivery for the half-year stood at INR 267 crores, marking a growth of 31%. PAT margins, therefore, for the first half was at 44%. EBITDA at INR 369.2 crores showed a growth of 23% with a margin of 61%.
Looking ahead, the company is actively ramping up its infrastructure to support the volume growth, and we remain confident in delivering a strong performance in 2025. With that, I conclude my remarks and open the floor for your questions. Thank you very much.
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 remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Sheela Rathi from Morgan Stanley. Please go ahead.
Yeah, thanks for taking my question. Eashwar, my question was with respect to when we look at consolidated minus standalone numbers, this particular quarter we have seen about a 6% growth. When we look at the margin profile, the margins are low single-digit versus what we have seen in the last three quarters. Of course, this is up year-on-year, but just that the trend is significantly lower. And then even below the margins, also the number seems to be much weaker. Just wanted to understand the significance of this quarter with respect to the international markets.
Okay. I think the international markets have performed very well from a Netherlands business standpoint. Okay. Obviously, we still are seeing some softness both in the U.S. as well as the Belgium business, driven by obviously the factors that are affecting the U.S. business specifically thanks to the tariff, etc. But our business in Netherlands is still growing over 20%. So there is an extremely strong performance both from the Dubai as well as the China markets, and we continue to see that momentum carrying forward from quarter one. Obviously, the performance versus the previous year is still better, and we are therefore hoping that we see a turnaround probably in quarter three, quarter four as far as the U.S. business is concerned.
Okay. And in terms of the mix, is the mix very different in this quarter versus what we see in the other quarter? And I mean, just trying to understand why margins in general are lower in this quarter.
Versus the sequential quarter, is this what you're saying, Sheela?
Yes. Yes, Eashwar.
Okay. See, from a margin standpoint, I think we delivered at the consolidated level from 64%. Against that, I think we are now at just give me a minute. I think we reported 58%, right? That's what we reported for this quarter. And I think this is in line with what guidance we had given as part of quarter one as well. I think we had a significant ramp-up of ND jewelry in quarter one. We've seen a slight slowing down as far as ND jewelry is concerned in this quarter. We delivered around 3.03 million reports versus 3.12 million. So there's been a slight slowdown in jewelry this quarter, which is the normal trend. Normally, we have a huge ramp-up in quarter four and quarter one. So that is one of the reasons.
Additionally, I think you will also notice that we are making some significant investments to build up an AI architecture in the organization. So there is a bit of one-off expenses that have got booked in this quarter. But again, that is very important for the company. We are making some strategic investments as far as building AI capability within the organization. So that is the reason there's an investment that is being done from a long-term standpoint. And that is the reason why you see a slight dip in the EBITDA margins. But we will remain with what we had forecast at the beginning of the year, between 57%-64% EBITDA margin is what the company will deliver this year.
Yeah, just one follow-up here, Eashwar. Again, this is to do with the consolidated minus standalone EBITDA margin. The 3.9% number vis-à-vis June 24, 3% versus the double-digit trend we have seen in the last two quarters. Just want to understand that in June quarter, when we look at consolidated minus standalone, is there any specific mix here which results in such lower margins, or this is just a one-off and we should see an improving trend?
No, I think it's just a one-off. And I think from a mixed standpoint, there's not been too much of change across segments. So I think we'll just see some improvement as we get along the road because the business in the U.S. hopefully should pick up now that we are into the season as far as the U.S. business is concerned.
Understood. All right. Thank you.
Thank you, ma'am. The next question is from the line of Harit Kapoor from Investec. Please go ahead.
Yeah, hi, good evening. So the first question was on this ASP movement. So if you look at it, there has been some improvement sequentially on the ASP side. It just gives you a little bit of a sense that it seems like your ASP levels are stabilizing versus Q1 where they were down by about 12%. Eashwar, I just wanted to get a sense on pricing. Do you look at the fact that now barring mix, ASP levels will have stabilized at this broad range of levels, at least for the near to medium term?
That's right. I think what we had discussed during our quarter one call as well, quarter one, we were cycling the price effect of April, May on LGD, which we had spoken at length. The company is cycling that. So that's the reason why you see sequentially the ASP is actually improved by some 3%-4% at the India level, which is the key driver of the global revenues as well. So I think we're seeing a lot of stability in the last three or four quarters. So we don't foresee any dilution as far as ASP is concerned over the balance of this year.
Understood. Understood. And the second part was you did touch upon in the earlier question about some tariff-related things on the Belgium subsidy. But U.S. as a market affects everything, including your standalone business. Just wanted to get a sense of how you are seeing the situation currently. Could there be in the quarter going forward some kind of volatility in revenue, given that there may be a stop-start situation as far as this is concerned, or do you have another kind of view on that?
No, see, the last two quarters, especially this quarter versus the previous year, I think the tariff discussions happened sometime in March, April. We have seen stability. We have not seen any massive disruption. But we're just hoping that there is some progress that happens on the trade deal because at the moment, there is an additional 10% levy, right, on the stones as well as the gold that goes out. So hopefully that stabilizes, it just clears out whatever little worries that the industry might therefore be facing. So we're keeping our eyes open in terms of where that discussion is going between the two governments. But otherwise, between the two quarters, there's not been anything that has actually caused any disruption as far as certification goes for our business.
Got it. The other one was on LGD jewelry. I think Tehmasp has in his opening remarks, you mentioned that you are seeing a pickup even in India market. So if you could just give a sense of what are you seeing in the India market in terms of LGD jewelry pickup, what is the kind of pace of increase there, and your role as certifier, is your share almost as high in stone certification as well as jewelry certification in the India market? Just a little bit of sense of what's happening in the India market for you.
Okay. The thing is, LG jewelry is now the new growth factor that we are looking at. India has been a little slow on the acceptance of LG jewelry, but it is gaining momentum very, very fast. I mean, sorry, U.S. has been the first continent to have accepted LG. Last year, U.S. reported over 50% of all bridals with LG stones. Today, what we are doing here is now we are creating an awareness among the Indian continent to see increasing awareness creates transparency and knowledge, and that makes the consumer take a buying decision. We grade diamonds, and we give you the origin, whether it is lab-grown or it is natural. Certification becomes a very important factor that if you are buying natural, you need a certification to know for sure that it is not a lab-grown.
And if you are buying lab-grown, you need to be sure that it is not a piece of glass. So here IGI is policing the entire market and giving the consumer the value for the money that he or she is putting in. And we see this momentum growing. I think we saw some significant growth in the LG. So what is that percentage?
It is on a happy basis, some 6%-7% LGD jewelry versus previous year.
No, no. But over the previous year?
Over the previous year for the quarter. Quarter two is on 35%, right?
35%.
Yeah, 35%.
35%. So every quarter, the awareness is increasing, and the LG jewelry acceptance is also increasing, and we are in the game. We are the largest.
Okay. Got it. Got it. And one last question before I come back. Eashwar, is there any one-off in the other income this quarter? It seems pretty high on a year-over-year. Is this the cash balance impact?
Yeah, I think this has basically got to do with the accumulation of cash over the last 12 months. I think so that is the reason why you're seeing an increase in interest income for this period. I'm presuming you're looking versus previous year, right?
I am. I am.
Which is obviously the case because we generate like INR 300 crores every year. So that is what is giving this impact from an interest income standpoint.
All right. I'll get back tomorrow. Thank you. Wish you all the best. Thanks.
Thank you.
Thank you, sir. The next question is from the line of Aaron Armstrong from Ashmore Group. Please go ahead.
Hi, good evening. Thank you very much for taking the question, and congratulations on a very good set of results. Firstly, could you expand a little bit more on the tariff side of things, please? So when you serve the U.S. market, could you talk about whether you do that from your assets in India or internationally, or do you serve that domestically within the U.S., and how tariffs affect you in terms of either your competitiveness or in terms of kind of revenue and pricing?
Aaron, everyone is holding their breath on the tariff issue. They're waiting for the announcement. And I mean, tariff is something that is here to stay. I mean, there's no two ways about it. And the entire industry is looking for innovations and ways to surmount this obstacle that is there, but the business is carrying on. Having said that, what happens is India is the center of manufacture. And my New York offices, my offices in Europe, they are the marketing arms for us. So they provide us the information of the market sentiments in the U.S. or in Europe or wherever. And based on those requirements, we grade and certify the jewelry or diamonds, whether lab-grown or natural in India. So while all the marketing effort is driven from the Western source, the manufacturing and the cumulative collection and invoicing is done in India.
You may see a little difference, but essentially, it is because of these global offices that we have. We are able to certify, manufacture, and certify in India where we are very strong.
Got it. Thank you. And so do you think you'll be able to pass on tariff costs, or are you currently passing on tariff costs to your customers?
No. No. See, the tariff cost.
Aaron, there is no implication for IGI from a tariff standpoint. So that, I think we have to just clarify to you. I think it's a play between the manufacturers and the retailers. So IGI per se is not affected by tariff.
Yeah, per se. But it'll be distributed between the manufacturer, the retailer, and probably in the end, the consumer. So it's a game that these guys have to play. We are certifying the goods that are being exported.
That's great. Thank you. And then a couple of other questions, if I may, please. Just firstly, on the other operating income line. So I can see for this quarter, it was at INR 88 million versus INR 117 million in the same quarter last year. Could you talk about that decline, please?
That decline is basically led by some slowdown on the sorting business that we do in Europe. So we have seen a slight slowdown there in terms of we have large retailers like.
We have large super brands.
Large brands, super brands who come to us for.
Do the screening in Antwerp. We do nearly on a year-on-year basis, we do 20 million stones. But now we know the super luxury brands have also slowed down a little. And from that perspective, the screening services has also got a little slowdown there.
Okay. That's great. Thank you. And then sticking with the consolidated numbers, if we look at for Q2 of this year, the cost control has been very strong, and you've had a decrease in cost on employee benefits expense, on your depreciation expense, and then on your other expenses line as well. Could you talk a little bit about where those cost savings are coming from and whether they're sustainable for the rest of the year?
I think the cost will be sustainable at these levels around for the balance of the year. Versus the previous year, we had taken a one-time charge in 2024, in this quarter of last year, consequent to a slight severance that we did in our U.S. business. So that's the reason why you see a flat expense on employee benefit or slightly lower cost on employee benefit than previous year. On amortization, this is more than a local GAAP requirement, which is about taking a charge on lease, offices, etc. We had actually two offices in lease in the U.S. at the same time last year. So we are coming to the end of the lease in one of the offices, the other offices where we will continue to operate. That's the reason why you're seeing a slight decline in D&A expenses.
The other expenses have remained more or less constant at the same levels as last year, and that trend should therefore continue as we get along the road.
That's great. Thank you. And then one point that I think you touched on, but maybe some more detail would be helpful, please, just on your average realizations. So the 963 number that you've posted for this quarter, down 3% YOY. Is that just mixed-driven? So are you making a lower average realization, say, on LGD versus ND or on diamond versus jewelry? Could you talk a little bit about that mixed effect, please? And on a like-for-like basis, do you see most of your pricing is stable right now for the rest of the year?
Yeah. I think the pricing has been extremely stable over the last two, three quarters, and we expect that to continue as we get along for the next two quarters. The slight dip that you're seeing, Aaron, is we've seen a large chunk of smaller-sized stones for natural diamond, which has come in during this quarter. So those are those dossier reports versus the full diamond reports that we give to natural diamonds. So that's the reason why if you look at my natural diamond business, it has grown 14%, and that is consequent to smaller-sized stones coming in for certification. And that's what is causing a slight dip in the average realization price, but the volume has more or less taken care of the slight dip as far as natural diamond is concerned, and the overall revenue has therefore grown at around 14%.
So I think that is the major reason why the ASP has actually declined by some 2%-3% over the same time last year.
That's great. Thank you. And one final question, if I may, please, just on the outlook for pricing as you look towards 2026. Do you think you'll be able to sustain current prices?
We hope to, too. Early in the day. But we're seeing a lot of stability in the market. So if things remain the same, I think we should therefore look at the same realizations as we get along into 2026.
That's great. Thanks again for the call, and look forward to keeping in touch.
Thank you.
Thank you.
Thank you, sir. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions, may please press star and one at this time. The next question is from the line of Harish Advani from Axis Capital. Please go ahead.
Hi. Thank you for taking my question. My first question was on the India LGD business. So we have seen a pretty strong pickup sequentially. So this 24%, can you break it down into how much of this has been volume-led and how much of an impact we had from the pricing because we took pricing cuts last year this time?
See, I think the volumes have grown more or less in sync with revenue. Both of them are growing around 24%, and that's what you see in the financials as well. And as I mentioned, we are now back to the same price levels versus the same time last year. So the revenue growth has mirrored the volume growth during this period. So it's around the same levels. 24% is the volume growth as well.
Okay. Perfect. Thank you. And if I were to talk about the subsidiary business, which is console minus standalone, you kind of indicated that this quarter there was a bit of pressure, and that's why the margin has come up from 20% to about 4%. But we had a similar kind of an impact last year where the margin was about 3%. So is this more kind of a seasonal thing? And if that is the case, what should we kind of build in for the rest of the year on the full year CY25 for the international business?
Yeah. I think you must build in whatever we have seen as the first-half growth. We hope that the U.S. business will start to move and move the needle up, but the Netherlands business is continuing to grow over 20% as we speak. So you can build in the same levels of growth as we get along for the balance of the year. But overall, as we've mentioned earlier as well, the company had given a forward-looking statement of a 15%-20% growth from a revenue standpoint, and this quarter performance has been an 18% revenue growth, and that has brought the first-half growth to close to 15%. So we are confident of delivering to what we had committed at the beginning of this year, which is a 15%-20% revenue growth.
Perfect. And just one last question. So if I were to look at the consolidated margins of last year of about 49 odd percent, can we say that this margin which we delivered in 2018 has more or less come off a low base, and ideally, margins should remain in the ballpark of 57%-64% that you mentioned? Is that a fair assessment?
Yeah.
Okay. Thank you.
I think we should look at that range. Yes.
Okay. Perfect. Thank you. That were my questions.
Thank you, sir. The next question is from the line of Angad Katdare from Samiksha Capital. Please go ahead.
Hi, sir. Thank you for the opportunity, and congratulations on the good set of numbers. Well, most of my questions have been answered. My follow-up question is just on the number of employees. What is the current count of employees currently, and how many gemmologists out of that?
So, I think globally 1,300. Around 1,300 people would be the total employee strength. And I think all the lab facilities will close to 1,000. Lab, back office, everything put together. Yeah. I think all of it would be close to between 900- 1,000 people.
Got it. Thank you.
Thank you, sir. The next question is from the line of Harsh Shah from Avener Capital. Please go ahead.
Hello. Am I audible?
Yes, sir. Yes, sir. Please go ahead.
Yes. Yes, you are.
I'm thankful for taking my question. Just wanted to know about the demand trends in the third quarter, like already the first month has passed.
We're not seeing anything very different. Harsh, we're not seeing anything different in July versus the performance that has been seen in quarter two. Early days for the quarter, but the business continues to be stable.
Okay. Okay. And the rest of my questions have already been answered. Thank you.
Thank you, sir. The next question is from the line of Naitik from NV Alpha Fund. Please go ahead.
Hi sir. Thanks for taking my question. So I just wanted to understand our employee costs a little better. While I appreciate that year- over- year, it has fallen, but if I look at it sequentially, the range had been INR 65 crore per quarter, roughly, which is gone to INR 71 crore. So just wanted to understand where does this stabilize, and are there any one-offs in this INR 71 crore?
Okay. See, the INR 71 crore versus INR 65 crore is consequent to two things. One is the annual increment impact, plus we had mentioned in the last call that we've added some 250, 300 people over the course of the last few months. So that is the reason why this cost has actually gone up. We expect this cost to remain at the same level for the next two quarters because I think we are again in cycle as far as recruitments are concerned. So I think we are now back in as far as meeting customer expectations from a timeline standpoint. I think we are now adequately resourced to manage the volume growth, at least for this year.
Nice. And, sir, you mentioned you have done some one-time investments which are sitting in other expenses. So just wanted to understand that also because even that, if I see sequentially on a similar revenue base, that has also gone up substantially. So just wanted to understand that.
That will probably stabilize slightly lower in the subsequent quarters because this is just a chart that we've taken this month for the project that we are embarking on. I think we are at around INR 56 crore.
Can you quantify?
INR 56 crores. I think we should probably get back to the INR 50 crore level.
Right. Got it, sir. That's it from my side. Thank you.
Thank you, sir. The next question is from the line of Shravan Vohra from Morgan Stanley. Please go ahead.
Hi, sir. Thank you for the opportunity, so I had two questions. First one, you mentioned briefly about capability building to handle higher volume, so could you talk briefly about that? What kind of capabilities we are building on the AI side and the gemologist side?
This is basically recruitment of gemmologists that we did in the first four or five months of this year. These are basically gemmologist graders that we have recruited. Plus, obviously, we have also built up some capability or number of people both in our back office as well to manage the business growth requirements.
Got it. And secondly, sir, if you could talk about your brand-building initiatives that you had spoken last time also, both in India and in the U.S., to get more retailers on board in the U.S. So any updates on that?
So most importantly, you will know that the India exhibition, the largest exhibition in India, has just started today, in fact. And we are showcasing our new different services at the exhibition. And of course, we are in the routine business of creating a brand awareness where the IGI is concerned and also to enhance the services that we provide. So it's a cumulative exercise that we are doing in a holistic manner. So we are getting to the entire supply chain right from the manufacturer to the wholesalers to the retailers to the consumers. And that is what we are doing currently. And more importantly, in the India market, we are trying to create more awareness and transparency regarding diamonds.
There's a lot of negative chatter going around, but we say that both LG lab-g rown as well as Natural, both are diamonds, and it is extremely important to identify the origin, and we have the capabilities and the scalability of identifying this origin, and that is what we are depending on.
Right. Perfect. Thanks a lot, sir.
Thank you.
Thank you, sir. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions, may please press star and one at this time. The next question is from the line of Sumit Sarda from Compound Everyday Capital. Please go ahead.
Yeah. Hi. I'm audible.
Yes.
Yeah.
Yes, sir.
Yeah. Yeah. I have two questions. First is, what is the net cash on the balance sheet? And it was mentioned that generally, we generate around INR 3,300 crores of cash every year. So how do you plan to allocate it? A, in, for example, growth, also returning to shareholders, if any? So that is the first question. Second question is, you mentioned that you are investing in AI capabilities. A larger question is, how does AI improve accuracy, cost, etc., certification, and what are the early trends we are looking at? Can it be a game changer for our business? Third would be, would you maintain that 15%-20% volume guidance for the year? Thank you.
Yeah. I think so. There are three questions that you've asked, Sumit. Number one, the cash balance, I think, is in excess of INR 750 crores now in the company. And as we have indicated earlier as well, we will be seeking guidance from the board as far as dividend declarations are concerned. That is actively in consideration for the management. And number three, in terms of the growth, which I had earlier articulated during the call, I think we will stick to the guidance of 15%-20% revenue growth for this year.
Just to follow up on the capital allocation, how do you want to invest it in the business? Are there a lot of opportunities, for example, setting up new labs, new kinds of labs?
Which we are doing currently. We have opened a couple of labs in the last couple of months. But then again, from a larger context, I think the company continues to evaluate opportunities for acquisition, etc. I think that is always on the radar in terms of how we could therefore deploy the capital that we have for bringing in some inorganic growth. So those considerations will continue to be evaluated.
Okay. The last question was on AI and its impact on our business.
AI? Oh, yeah. Of course. I think I missed that. Sorry. I think that's what we want to engage in that journey just to ensure that we are aware of the development that's happening in the global environment as far as AI is concerned, and we don't miss the bus in terms of some of the opportunities that therefore exist. So we are commencing a project there. We'll see how that goes. It's more about discovery and therefore implementing some of those automation stroke AI measures within the organization for effective delivery and improving effectiveness as an organization.
Shortening our service delivery.
Yeah.
Got it. Just final question on the effective tax rate, which is around 28%. Should we maintain that, or it can be lower for the year?
Yeah. It's the same. Nothing. I think just maintain. I think there's nothing that's going to happen significantly different in the balance of the year. I think we just continue to maintain at the same percentage.
Perfect. That's all. Thank you. All the best.
Thank you, sir. The next question is from the line of Raman from Sequent Investments. Please go ahead.
Hello, sir. Can you hear me? Yes.
Yes, sir.
My question is with respect to the recent steps taken by GIA with respect to 4Cs grading for lab-grown diamonds. I guess they have stopped 4Cs grading for lab-grown diamonds, which is so I just wanted to understand what is the market opportunity for someone like us with respect to this, the competition being one of the key competitors stopping this particular service?
Raman, this is a very good question. See, right now, understand one thing. Lab-grown is the biggest disruptor which has happened to the industry in the last 100 years. Okay? 4Cs is the analysis which has been there for the last century. Okay? Now, we at IGI are principled to be an independent certifier. We are not governed by any external influences. We are able to certify a diamond, and we give the origin. Today, we not only give the 4Cs on both natural as well as on lab-grown because that is what the diamond is, and that is what the consumer understands. It is very important to know the origin because if you're buying a natural diamond, you want to assure yourself that there is no lab-grown in it, and IGI does that.
If you want to buy a lab-grown diamond, you want to be sure that there is no piece of glass, and IGI certifies that. So our stance is that we are a neutral body. We do not want to have any preferences or biases against any gemstone or diamond. So we will continue to keep to our independent status and continue to educate and inform the consumer that a spade is a spade, period. Something like that. Hello?
Yes, sir. My understanding is, I just wanted to understand what is the total market size with respect to 4Cs grading for lab-grown diamonds?
So we have virtually 65%-70% of the lab-grown diamonds which are graded against the 4Cs today. Yeah. So it is still I cannot.
So you can improve your global market share in terms of lab-grown diamonds certification if I'm correct?
Of course. Because we give what the consumer wants. We are not, I mean, opinion makers. I am giving you consumer wants, consumer is familiar with, and that is what we are doing.
Okay. Yeah. I understood, sir. So my second question is with respect to the average cost of lab-grown diamonds. You have said it has been stable for the past two to three quarters. So I just wanted to understand the scenario whether there is a possibility of the lab-grown diamond prices going down further or the manufacturer won't be able to produce the lab-grown diamond if there is any further declining in the prices?
I think we have articulated this in the past as well, Raman. I think at the current prices at which it's trading at the wholesale level, we estimate that their returns on their investment is between 8%- 10%. That leaves them with very little room to further drop prices, and that's why we have also seen that sort of stability in the last couple of quarters, so I think we are seeing the end at the bottom end as far as pricing correction on lab-grown diamonds is concerned.
So there won't be any further pricing correction, which will necessarily mean we don't really have to take any other average realized price for us won't be affected.
Yeah. That's what I just indicated in my call.
Thank you.
Thank you.
Thank you, sir. Ladies and gentlemen, to ask a question, please press star and one now. Participants who wish to ask questions, may please press star and one at this time. The next question is from the line of Smith Gala from RSPN Ventures. Please go ahead.
Yeah. My first question is average revenue per certificate. Should we look at the number sequentially or year- on- year?
You can look at it both ways, Smith. The reason why we talked about the year-on-year number is because there was a pricing correction that happened last year. So there were a lot of queries in terms of the ASP performance in quarter one versus the previous year where we were cycling a price reduction of quarter two last year. So you can therefore look at it from that standpoint. Also, from a sequential standpoint, we have mentioned this in the past. While the overall volumes remain more or less stable across quarters, there is obviously a mixed element that comes into play. There are quarters like the Diwali quarter where we have a spurt in jewelry certification. There's a first quarter of every year which sees a larger LGD mix. So those impacts on the ASP will continue.
But otherwise, from a pure realization standpoint, if you were to disregard the mixed impacts, we are seeing a lot of stability as far as the price that we charge to our customers.
Okay. Thank you. That was helpful. That's all from my side.
Thank you.
Thank you, sir. The next question is from the line of Chintan Sheth from Girik Capital. Please go ahead.
Hi. Hi, Eashwar. Am I audible?
Yes, sir.
Yes, Eashwar.
Yes, Chintan. Hi.
Yeah. Hi. Hi. So the question is on the follow-up on the IGI strategy to move standardized LGD. Do you foresee any risk on the full-fledged certification demand to move to a minimalistic dossier certification and that impact our overall realization in the future?
Hey, Chintan. We were the first to adopt lab-grown certification. Okay? You were the first to adopt the lab-growns. GIA, in fact, didn't want to certify lab-growns initially, and then they saw the market volume, and they also got into lab-grown certification. Okay, and they have been also doing, but I think that they couldn't match up to the IGI standards. See, IGI has the expertise to identify the origin and the scalability. See, to identify the origin on a scale of lab-growns is immense, and we have developed that scalability, so when they saw, I mean, suddenly they've taken a U-turn that we will stop grading. Okay, so I cannot say anything much, but I can only use it to my advantage, which I'm doing.
Got it.
The consumer has the right to know the choice to decide. It is not a laboratory. Laboratory is an independent entity which gives you the analysis. Period. It will be stigmatized.
Right. Okay. But how is the price differential between our full-scale certification and the dossier certification if one has to just compare?
I didn't.
Other price differential between full-scale certification versus dossier minimal certification, which we do internally as a set of price?
See, GIA has not announced any indication of what they're going to price. All they have announced is their indication that they will henceforth do a premium or a standard or minimal. See, this is essentially minimizing a category, and we don't believe in that.
No, no. I am asking within yourself, IGI report, within IGI report, there is a full certification which also includes the laser inscription and the diamond, right, versus a minimal certification which is more dossier-driven certification, which still carries 4Cs certification but doesn't provide more details on the laser imprints and the stones. What is the price differential between these two reports?
See, no, the price differential, Eashwar will explain to you. But the thing is the analysis is the same. Whether it's whatever the format of the certificate, we do the analysis. We also do the laser inscription on both. You understand?
Right. Right.
So it's the format which is different, but the basic analysis is the same. And the dossiers are generally used for smaller diamonds. And that is where a dossier fee is less than a full diamond report fee. So that is the advantage that when you're doing smaller diamonds, you take a dossier.
Eashwar, anything on the price differential if you can have it?
I think we have mentioned this in the past. I think our jewelry certification realization is around just under $4, which is basically dossiers, and natural diamond price would be just above $40, so I think we talked about it in the past. Yeah.
Right. Right. Thanks, Eashwar, and all the very best. Thank you.
Thank you, sir. The next question is from the line of Harish Advani from Axis Capital. Please go ahead.
Hi. Thank you for the follow-up. So my question was in continuation to the question which was asked by the earlier participants about GIA kind of withdrawing from the 4C certification of LGD. So I just wanted to check with you in your conversations with, say, clients, how have they viewed this, and are they now beginning to initiate conversations with you for a more complete kind of a certification? That was my question.
See, the thing is they have always been exposed to the 4Cs. The retailer knows the 4Cs. The consumer knows the 4Cs. And this is a new entity which GIA has introduced, and people are uncomfortable and confused. IGI, there is no confusion. We give you the standard 4Cs, and we give you the origin, which is the most important. Today, origin has become even more important than the 4Cs because the 4Cs continue to remain the same for lab-grown diamonds as well as for natural. However, origin is of paramount importance, and that is where we have the expertise to differentiate.
Okay, so just to sum it up, are any clients looking to switch over from GIA to IGI?
We are seeing that trend. Those are a very small number because we have the bulk of the certification in LG.
Okay. Perfect. Thank you. Thank you.
Okay.
Thank you, Tehmasp. Ladies and gentlemen, in the interest of time, that was the last question. I now hand the conference over to management for closing comments.
Okay. Thanks, everyone, for taking the time. And I see that we still have a few questions unanswered. You are open to reach out to us on email, etc., and we will be happy to take those clarifications as well. So thanks again, as always, for your active contribution and participation in these calls. Thank you very much.
Thank you, everybody.
Thank you, sir. On behalf of International Gemmological Institute, India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.