Ladies and gentlemen, good day, and welcome to the Q4 and 12- months 2025 earnings conference call of International Gemological Institute (India) Limited, hosted by SMIFS Limited. As a reminder, all participant lines will be in the listen-only mode. 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 the conference is being recorded. I now hand the conference over to Mr. Sumit Khetan from SMIFS Limited. Thank you, and over to you, sir.
Good evening, everyone. I welcome you all to the earnings conference call to discuss quarter four and twelve months 2025 results of International Gemmological Institute, India Limited. To discuss the results, we have from the management, Mr. Tehmasp Printer, MD and CEO, and Mr. Easwar Iyer, CFO. They will take you through the results and the business performance, after which we will proceed for Q&A 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 risk and uncertainties. For more details, kindly refer to investor presentation and 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. Over to you, sir.
Thank you, Sumit. Good evening, ladies and gentlemen. I would like to welcome you all to the Q4 and the 12-month 2025 earnings call. I trust that everyone has had a chance to review our financial results and investor presentations, which has 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 strategy and outlook. While the company is presenting the 12-month financial update, it may be noted that the company is moving its reporting year from the current January to December cycle to April to March cycle. Accordingly, the company shall report the financial results for a 15-month year, 15-month period ending March 2026, in line with the regulatory requirements. The company has had an excellent 12-month January to December 2025, despite some macroeconomic headwinds.
The company has seen exceptional performance across all its segments, natural diamond loose stones, lab-grown diamonds loose stones, natural diamond jewelry, lab-grown jewelry. The growth in the natural diamond segment has been led by increased penetration and market share in this segment. On the lab-grown loose segment, the robust growth of the last two years continues in 2025 as well, and the volume growth is in excess of 21%. This segment has seen stability in pricing over the last 18 months and the evolving landscape resultant of grading principles adopted by the other players in the certification industry. IGI is confident of further penetrating into this segment. The underlying demand for the lab-grown diamonds continues to be strong, and the large manufacturers are making significant additions to their capacity as the industry expects to double the caratage in the next three years.
We remain confident of repeating the volume and revenue performance in this segment in the financial year 2026. While the momentum of natural diamond jewelry has continued over the past 12 months, we are continuing to see exponential growth in the lab-grown jewelry sector. Over the past 12-15 months, we have seen many new players entering the retail space for the lab-grown jewelry , with retail showrooms now over 1,000 across the country. We believe this industry is in its nascent stage, and with the adoption of lab-grown jewelry amongst the Indian consumers, this segment is poised to accelerate growth in the near future. All the evolving changes further reinforces the need for independent third-party certification, in addition to the 4Cs of grading and the need to identify the origin assumes greater significance for the end consumer.
IGI is an independent third-party certifying body that will play the lead in creating this consumer awareness as part of the strategy IGI initiated in its first reach out to the consumer program by co-sponsoring Women's World Cup, and you can expect greater brand building exercises over the next 12-18 months. I'm happy to report that the company has shown strong growth momentum across all its business segments. In quarter four of 2025, as compared to quarter four of 2024, the business on a consolidated basis has done exceptionally well, with a 21% growth in revenue from operations and 26% growth in EBITDA, with 3.21 million reports in the fourth quarter of 2025. The company has delivered a strong volume growth of 11% over the previous year. The business has seen strong revenue growth across its segments.
Lab-grown sector is growing at 35%, and the natural diamond is growing at 45% year-over-year versus the previous year. For the 12-month period ending December 2025, our volumes grew by an impressive 21%, with a robust performance across all the business segments, natural diamond, lab-grown diamond, jewelry, and colored stones. The revenue from the operations increased from INR 1,053 crores in calendar year 2024 to INR 1,229 crores in 2025, reflecting a healthy 17% growth. Equally encouraging, our EBITDA rose from INR 600 crores- INR 737 crores, making it a strong increase of 23%. With the strong fourth quarter performance, the company exceeded the guidance provided at the beginning of the year, 2025.
We remain committed to enabling growth to our, for our partners, delivering long-term value to all our stakeholders. With that, I now invite our CFO, Mr. Easwar Iyer, to take you through the financial and operational performance for the quarter.
Thank you, Tehmasp, and good evening, everybody. Thank you for taking the time for joining us on the call today. We are delighted to have you all. As many of you know, the company follows a January to December reporting cycle, and we are excited to present the results for quarter four, as well as the twelve-month period for 2025. I start my conversation with an update for quarter four results, before providing an update on the 12-month performance. On a consolidated group performance level, I'm happy to report that the group consolidated business has maintained strong growth momentum in quarter four 2025. In terms of revenue, certification income for the current quarter stood at INR 305 crores, growing on a yearly basis at 23%, supported by strong growth, strong volume growth of 11%.
This was primarily driven by strong revenue growth across all segments, namely 45% growth in natural diamonds, 35% growth in lab-grown diamond loose stones. Revenue from operations for the quarter stood at INR 320 crore, registering a year-on-year growth of 21%. Driven by strong revenue performance, we delivered a PAT of INR 135 crore, growing 18% compared to the previous year. PAT margins stood at 42.1% for the quarter. EBITDA reported at INR 191 crore, reflecting a growth of 26% compared to the previous year. EBITDA margin stood at 59.9%. The India business has seen a very strong quarter four performance.
While revenues grew 12%, certification revenues grew at 33%, driven by very strong growth in India loose stones of 53% and LGD loose stones, which grew at 47%, which has resulted in a 19% improvement on the ASP. Coming to the 12-month update on the consolidated group performance level, we've delivered 12.81 million reports, compared to 10.57 million reports in the same period, marking a robust year-on-year growth of 21%. In terms of revenue, certification income stood at INR 1,188 crores, growing at 18%. This was driven by strong growth across our key segments. LGD has grown at 22%, ND at 20%, and LGD grew at 22%. Driven by strong revenue performance, we delivered a PAT of INR 532 crores for the twelve-month period, growing at 24%.
PAT margins stood at 43.3%, which is up 270 basis points year-on-year. EBITDA reported at INR 737 crore, reflecting a year-on-year growth of 23%. EBITDA margin stood at 59.9%, up 300 basis points year-on-year. The company has ended the 12-month period with an extremely strong quarter four performance, thus delivering above the guidance provided at the beginning of the year. With that, I conclude my remarks and open the floor for any further questions. Thank you, everybody.
Thank you very much. We'll now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone 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'll wait for a moment while the question queue assembles. The first question is from the line of Sucrit D. Patil from Eyesignt Fintrade Private Limited. Please go ahead.
Good evening to the team. I have two follow-up questions. My first question is to Mr. Printer. With increasing complexity in global jewelry markets, including growing adoption of lab-grown diamonds, higher consumer focus on traceability and evolving retail requirements, how is IGI positioning its certification and value-added services to remain relevant and indispensable across the industry? Additionally, how do you see demand evolving across natural versus lab-grown segments? And what tactical priorities will shape IGI's growth and differentiation over the next coming quarters? That's my first question. I'll ask the second question after this. Thank you.
Okay, thanks, Sucrit. IGI is in a very dominant position, because we believe that as a third-party independent certification body, which certifies diamonds, the most important factor to date, apart from the 4 Cs, of course, is the identification of the origin. So just take it like this, that, you know, if you want to buy a natural diamond, certified by IGI becomes a real factor. Why? Because you want to know it is not a lab-grown diamond. If you want to buy a lab-grown diamond, certification becomes imperative because you want to know that it is not a piece of glass. So at every stage, IGI certification is the most relevant feature in the purchase of your diamonds and diamond jewelry. You know? We firmly believe that, you know, our certification makes lab-grown diamonds a diamond.
That is what the aspiration of a customer is. You know, every customer aspires to have a diamond, and today, IGI is giving that option to the buyer, which is now what I call it as a modern luxury, not even an affordable luxury. It is. Of course, it is more viable to the pockets of the millennials and the Gen Zs, but it is a modern luxury, which everyone aspires to have a diamond, and when it is certified by IGI, giving you the 4 Cs of the diamond, giving you the origin, it becomes conducive for purchase. So all over the world, we've seen, and the U.S. has taken the lead in adopting lab-grown diamonds. IGI has taken the lead in adopting the certification of lab-grown diamonds, because we believe that we certify diamonds and give you the origin.
That is the mainstay of IGI, that we are a third-party independent certification body.
Thank you. My second question is to Mr. Iyer. As IGI continues to scale its operation amid fluctuations in diamond volumes, pricing cycles and geographic mix, how are you thinking about margin sustainability and cost efficiency while investing in technology, capacity, and talent? Further, can you elaborate on the capital allocation philosophy and cash flow priorities as the business balances growth opportunities with, you know, financial discipline also? Thank you.
Okay. I think you've asked too many questions at the same time. Let's try to answer this one at a time. On the margin side, I think what we have, what we've been articulating over the last three quarters, I think India is where majority of the cutting and polishing happens. So from that context, because of our position in India for the last 26 years, we have established a strong connect with the manufacturers and the retailers here, which is enabling us to therefore ride on the brand salience that IGI gets to the table. Having said that, with strong revenue performance over the last three, four years and also 2025, I think we are also have a business model which provides great operating leverage.
You will see that you know consistently there has been an improvement in the EBITDA margin or the PAT margin that the company has been delivering over the last eight quarters. So this year we've ended the year with around 60% EBITDA margin versus 57 that we delivered for the 12-month period of 2024. Again that brings out the operating leverage that this business it works at. Speaking on the cost and the capacity et cetera that you asked about I think that is an ongoing activity within the organization in terms of building up capacities. And for us capacity is basically building a good bench of graders.
We did a recruitment of close to 200 people at the beginning of 2025, and as we speak, there is another round of large recruitment that is happening, because we are seeing an exponential growth on the volume front, as we speak between as we ended the year. So that is a continuum for the company. We continue to remain focused on providing the best customer experience, driven by improved turnaround times, et cetera. That is one of our key matrices from a customer experience standpoint. And to that extent, as and when we need to add workforce, to provide differentiated service for our customers, we will continue to do that.
Thank you for the guidance, and I wish the entire team best of luck for the next quarter.
Thank you.
Thank you. Our next question is from the line of Harit Kapoor from Investec. Please go ahead.
Hi, good evening. So if I ask you, the first one was, you know, if you could just explain a little bit more in detail as to, in this particular quarter, and even actually in Q3, we saw very sharp growth in natural diamond loose, 29% and now 45%. India is even higher. And the lab also has seen an acceleration. So whether it's festive, whether it's U.S. New Year, Christmas, whether it's pipeline filling for Valentine's Day, if you could just give us a sense on what happened this quarter, because 40%-50% growth in natural diamond is something we're not used to seeing, sir.
Very good. See, in natural diamonds, what is happening is there is lab-grown diamonds and natural diamonds. Now, people are also certifying more of natural to ensure that it is not lab-grown, you know? So both the diamonds are actually complementary to each other, and we are sitting in the middle. We certify the origin as well as the 4 Cs. So I agree that, you know, we have seen a very good increase in the certification of natural diamonds, about 45%. And that all comes from that everybody wants to know the value of the money that they are paying, and they have to ensure that it is not a lab-grown. Initially, in yesteryears, lab-grown didn't exist, or not as much as in this quantum. So people were certifying.
But today, certification of natural diamonds becomes imperative because you want to be sure that it is not a lab-grown.
And demonstrate the.
Yeah.
Just to add to what Mr. Printer just mentioned, I think,
Yeah.
Strategic priorities for IGI is also to find way the means to improve its market share in natural diamond. I think over the last, you know, over the last 12 months, there's been a significant effort that's gone in, in terms of improving our penetration and, you know, dealing with a larger customer base in terms of attracting them to, IGI for certification services. So I think there is, some of those factors at play as well, which is enabling us to deliver very strong results from a ND standpoint as well.
Given, Easwar, that the ND shares are relatively lower compared to lab, is this a I mean, not 45%, but is this a trend that lab, that natural grows in line or ahead of the overall certification revenue, at least into CY 2026? Because why I'm asking is because it has a material impact on the realization.
Of course. Of course. No, see, Arif, I think it's one of the, strategies that is articulated by the organization in terms of how are we therefore going to leverage the strength of LGD in the natural diamond segment as well. So from that context, the teams are committed to, you know, providing this vertical, the necessary impetus that is required to gain that sort of traction. I understand that from an ASP standpoint, with high realization of ND, diamonds, et cetera, but yes, we continue to remain focused on all, on all segments. And, of course, ND is an important component of our revenue, mix.
And just to add to what-
Yeah, go ahead. Sorry.
To add to what Easwar is saying, see, there are different consumers. The old-age consumers who predominantly want to buy natural diamonds, they have to be very sure that it is a natural diamond. That is one segment. And the millennials and the Gen Zs, who now can afford to buy diamonds instead of crystals and trinkets, they also want to, how to say, get it certified to know that it is not a piece of glass. So overall, what is happening is, the diamond-consuming market is fast increasing because of the millennials and the Gen Zs. Now, there will come a point in time when the Gen Zs can afford natural, they will be going to buy natural. So it's, both the diamonds are complementary to each other, and IGI is sitting in the bang middle of this consumer market.
Thanks for this. Also, you know, on this one follow-up on this part. So, could you highlight also, you know, this 45% growth in consolidated, and I'm looking consolidated, that's the best way to kind of look at it, on the natural diamond side. You know, is there any specific country where, you know, we have seen a noticeable market share gain? India, we are already very strong in natural diamond market shares, but, is it India market? Is it U.S., where we have a low share, you know, last two quarters? Anything you can highlight in terms of countries where, you know, this market share gain is visible with the retailers of that region?
Yeah.
See, Harit, this, India has grown 53%, yeah. So obviously, the focus of attention for us remains in India at the moment. As we have articulated in the last call, we've got a fresh leadership inducted into the U.S. team, and that then becomes our critical strategic priority for 2026. So yes, at the moment, most of these market shares that we are seeing is from the India, from the India market. But yes, our focus continues to remain on larger geographies as well.
Great . And, on this one, the lab bit, so, if you look at again, you know, again, last three quarters, you know, growth rates have been fairly strong. Would you attribute, I mean, I know Tehmasp mentioned this in his opening remarks, but are you seeing a perceivable kind of shift from, I guess, you know, your competitor who has changed the grading structure, in terms of clients from that competitor to yourself, over the last, say, three, four months, given that you do a much more detailed kind of grading, still? So, I mean, are you seeing that shift already kind of play out?
Yes, in a way, there is a shift. The thing is, we are an independent grading laboratory, so we don't carry any biases against any gemstone. We are neutral to all gemstones and diamonds, and it is our prerogative and our philosophy to give the grading to the diamond, give transparency to the consumer. And so from that perspective, we continue to grade the lab-grown diamond also on the 4Cs method. Having said that, because the competitor is just grading it not as 4Cs, they initially, to start off with, had to quite a little market share, which is also now coming to us. Okay? And more and more awareness is being created about lab-growns, and more and more companies are getting into lab-growns. And of course, they naturally opt for a certification body which is independent, and giving the 4Cs and the origin. So then IGI is sitting on a very good wicket.
Thanks so much. The other things are two more. One was, even if I just look at, you know, just do a, consolidated minus standalone, which gives you a reflection of Belgium and Netherlands, you know, there has been a very sharp EBITDA growth. Seems like OpEx is also lower this quarter. And even for the full year, calendar year to calendar year, you know, EBITDAs have grown reasonably well, largely OpEx reduction driven. So I know this is really—I don't want to look at revenue, because revenue, you know, gets, can get booked in India as well.
But just from an OpEx standpoint there, even, either this quarter or for the full year, could you just enumerate some of the things you have done to kind of, you know, make a leaner cost structure in Belgium and Netherlands?
See, again, Harit, there has been a concerted effort at least to rationalize costs in the U.S., okay? Because, while we're trying to cut down some of the, for lack of a better word, wasteful expenses that we incurred in the U.S., I think we just want to redeploy that in terms of building greater organizational capability and strength. So we will, that's the reason there has been a, a reallocation of resources. So we're trying to cut down on some of this unnecessary spends there. And, while we haven't actioned in terms of fresh recruitment, et cetera, but there is going to be a lot of effort that goes over the next two, three months in terms of building up a strong sales organization in the U.S.
What you're seeing today is more about getting the cost structures right, so that we are able to then reinvest those resources for what we think is of strategic importance.
Got it, got it. And just one last question, if I may. You know, if you Obviously, this year has been an excellent year. Growth rates have exceeded expectations, and congratulations on that. You know, going into, you know, kind of next year, you know, any thoughts on, you know, what kind of, you know, broad revenue run rates or EBITDA run rates we can see? You know, you have the best view there. So, just wanted to get a broad sense from you. That's my last question.
Yeah. Harit, I think, early days for us in 2026. But, structurally, I think, some of the key trends that we are seeing is obviously, Tehmasp mentioned about, you know, explosion of, the retail chain as far as lab-grown jewelry is concerned. Added to that, we are also, hearing significant capacity additions that is happening at the, lab-grower, manufacturer's end. So from that standpoint, I think the tailwinds in this industry continue to be extremely strong, you know? And, you know, of course, we will endeavor to repeat what we've done in 2025. So that's where I will leave it. But again, at least the, the tailwinds are pretty strong as we speak.
Great. We thank you very much for your time. Wish you well.
Thank you.
Thank you. Participants who wish to ask a question may press star and one on their touchtone telephone. Our next question is from the line of Arihant from [Bohe]. Please go ahead.
Yeah. Hi, sir. Thanks for taking my question. I just wanted to know, like, where was your revenue jumping data from year to year, like around from 15.5% of sales in FY 2024 to 19%. So just wanted to know what is leading to the jump in EBITDA?
Yeah, okay. Arihant, I think we've articulated this in the past as well. We have a 60-day credit period for some of the large lab growers. Obviously, we've scaled up volume. I think that is why you see a slight increase in AR. But again, they remain within the credit terms that we have placed for these organizations.
Okay. Sir, and there has also been growth in other financial assets, increased from INR 13 - INR 108 crore. What-
The financial assets are basically, FD and bank balances, Arihan.
Okay.
I think if you look at the schedule, I think we'll place that out. It's already there, so you can just have a look. All of that is just basically cash, which is in bank, in FD or... Yeah, it's basically FDs.
Okay. And sir, the INR 1.8 crores ESOP shares which were granted, I just wanted to know when they will vest?
See, there is a vesting condition which is articulated in our DRHP document as well. I think, have a look at it. It vests over five years, with 60% vesting after three years, and so on and so forth. But there are conditions and gate conditions which have to be met before some of these options vest. So those details are available in the website. Have a look at it. In case you still have clarifications, please reach out to us, we'll clarify it for you.
Okay. Thank you.
Thank you. Participants who wish to ask a question may press star and one on their touchtone telephone. Our next question is from the line of Smith Gala from RSPN Ventures . Please go ahead.
Yeah, thank you for the opportunity, and congratulations on good set of numbers. My first question will be depending on, as, as you mentioned on the call earlier, that we are also doing a mass hiring. We have been able to achieve the 3.2 million volumes with the manpower which we have right now, and we are hiring, we have started the hiring. So with the new hiring, till what volumes will the new hiring be able to take us to?
This is an evolving question, I think, obviously, we have our own internal targets, et cetera. This is which we do hire. We like turnaround times. Focus on this hire, and the expert companies has been to reduce the turnaround time as far as-
You're not audible at all. You're not clearly audible.
Hello? Am I audible now?
Yes, but there is a lot of noise.
There's a lot of noise in the background.
I think so. Yeah.
Smith, I think there's a lot of background disturbance from your side. Is it better now?
Now it is. It is better, yeah. Yeah.
What I was saying is, while recruitment is obviously support the volume and revenue growth, one of the other aspects which we also like to monitor and keep a tab on is the turnaround times that we are providing to our customers. So it's a combination of various factors which determine how many people we recruit. So it is always in terms of optimizing both, the customer experience and also supporting. So our plans for recruitment are driven by these two factors.
Okay. And, before the past, leaving this quarter out, we had achieved a volume growth in excess of 20%. Now, in this quarter, we have near about achieved 11%. So for the next year, do we expect the volume growth around that 15%-20% range? Or you expect it to come down and the ARR, which has gone up 11% Y-o-Y to continue?
See, again, if you look, if you put this in perspective, the quarter for this year is cycling a Diwali quarter of 2024. That is the reason why you see a suppressed volume growth. But because of the mix shift towards Indian lab-grown loose stones, it's giving me an additional 11% ASP, culminating in a 23% certification growth at the revenue level. I think that has to be seen in conjunction. So the overall growth for the year has been a 21% from a volume standpoint and around 18% from a certification standpoint. And as I mentioned earlier, I think the company will endeavor to repeat this performance, considering that there are strong tailwinds in the industry.
Sure. Thank you. That's, that was it from my end.
Thank you. Our next question is from the line of Shrenik Mehta from Indo Alpha Wealth. Please go ahead.
Hi, am I audible?
Yes, now you are.
Yeah. Okay. Sorry for the delay. So the question I had was probably something that might have been asked in the last few minutes. We haven't seen any impact of the U.S. tariffs on the performance of the company. I'm still wondering how that is happening, why there is no impact, because a lot of reduction in the actual exports to U.S. has really happened. So if you can throw some light on what is really helping us here, is it that our market share is too small, or what, what is really ensuring that there is very little impact of the U.S. tariffs?
The U.S. tariff, there are two parts on the U.S. tariff. One is our, most of our, quite a majority of our sales is in the domestic market. There is no impact of tariff at all. And the other aspect is people have now maneuvered how to, use the tariff and continue to grow. People are looking also, I mean, the manufacturers are looking at different countries, you know, and all such things. So they are looking into different markets. What has happened is, overall, the certification and the market is, keeps on growing. You know?
Okay.
When the tariffs move away, there will be new markets to cover. So in short, it will be a good process. Everything has an upside for it, and I think tariff also has an upside for it.
Got it. Thank you so much.
Yeah.
Thank you. Our next question is from the line of Rahul Jha from Bay Capital. Please go ahead.
Yeah, thank you for the opportunity. I wanted to ask, like, what has been the pricing trend in the lab-grown diamonds? We have been seeing some decline over the last two years, but what has been the recent experience and on the demand side, as well as pricing?
You see, Rahul, I think we've articulated this in the last, two calls at least. The pricing on lab-grown has been extremely stable since May, June of 2024.
Okay.
So consequent to that, I don't think there has been any structural correction as far as, the certification component or the certification pricing for lab-grown is concerned. So, yeah, so there's been pretty good—it's been pretty stable.
No, I'm not asking about the certification pricing. I am asking about the actual lab-grown diamond pricing at the wholesale as well as retail levels.
Yes. So I'm also talking about the diamonds. I'm not talking about the certification.
Okay. Okay. Yeah.
Because of that stability in the diamond pricing, Our pricing also remains stable.
Okay. Okay. Thank you. Thanks for this.
Thank you. Our next question is from the line of Aditya Agarwal from PhillipCapital. Please go ahead.
Good evening, sir. Am I audible?
Yes.
Yes, loud and clear.
Yes. Yeah. Sir, I just wanted to know, like, I mean, from the monopoly point of view, I mean, we have the largest market share in the world. So can any, you know, different agency be able to acquire a large portion of market share from us in near future? So this was the first doubt that we have. And the second, just to add on this, is, like, do we expect that if lab-grown diamond prices crashes, really, I mean, since supply is increasing every year and let's say a 20,000 carat INR price is there right now, if it reaches to a level of, let's say, 10,000 or 12,000 in two to three years, so will the consumer have a, you know, different mindset that, do we require a lab certification?
I mean, since prices are already going down, so INR 10,000 price mean, you know, INR 5,000, INR 500 rupees for test, INR 500 or INR 800 rupees. So will it make sense? So just two, two questions. Would love to know your insight about it.
Aditya, I think, there are two aspects here. There's one is the pricing at the wholesale level, and one is the pricing at the retail level. As you mentioned, there's been significant stability over the last 18-20 months as far as the lab-grown diamond at the wholesale level is concerned, and I think we've articulated this in the last couple of calls as well. At the current pricing, the returns that the lab growers are currently making is in the 8%-10% ranges are estimated, and therefore, that provides them with no great elbow room to further drop prices. That stands out over the last 12 months. We can actually see the pricing trends on lab-grown diamonds. Having said that, the retail pricing works very differently from the wholesale price.
Prices at the retail level are significantly higher, and it's the power of the certificate that enables the retailer to sell a lab-grown at that at a particular price. I think, Tehmasp mentioned that at the beginning of the call in terms of the certificate actually, therefore, providing, a background to actually certify this as a diamond. You know, so that is a, that's a critical component in terms of what, what the certification does to a, a piece of the, a, a rock which finally gets certified as a diamond, you know? So these are, these are wider way, wider aspects, that needs to be considered before you, you know, get into a, you know, getting into a discussion around the need for certification, etc.
We remain confident that, you know, the need for certification is far more relevant today than ever before.
Just to add to what Easwar says, the need for certification is absolutely essential, and that also a third-party certification, not your self-certification, no? So what happens is, when you want to buy a natural, you want to know it is not a lab-grown. When you want to buy a lab-grown, you definitely want to know it is not a piece of glass. You know, even if l ike you said, even if it goes to 10,000, a piece of glass is at $100, INR 100. Y ou see the relevance. You have to get it IGI certified.
Sir, any further agency can it take market share from us? And what is the entry barrier that that stays our market position?
The most important factor here is trust. And trust is not something that you can acquire in a small, brief time. We have 50 years of legacy, +50 years of expertise, + 50 years of expert gemologists that we have over the last many decades. So all in all, the entry barrier is extremely high. If you see, there are today only two labs of repute. One is IGI, the other is GIA.
GIA.
Yeah, and then there are 10,000 other laboratories. But to be authenticated by a reputed laboratory is a must, and that is where IGI comes in.
Okay. Thank you so much, sir. And sir, how do we plan to use the operating free cash flows that we are generating year on year and in the near future, either in CapEx or distribution to shareholders, like?
Again, in line with what we've been articulating over the last so many quarters, I think there'll be a combination of dividend. Also we're holding some money in the bank because we are also continuously evaluating M&A options. So it'll be a combination of both, either acquisition of some company or in the form of payout in form of dividends. I think that is the way the capital then get allocated over a period of time.
Thank you so much, sir. Thank you.
Thank you. Our next question is from the line of Sunil Jain from Nirmal Bang Securities Private Limited. Please go ahead.
Yeah. Congrats on good set of numbers, sir.
Thank you.
So LGD, LGD revenue has grown by 34%, whereas overall volume has grown by 11%. So, bit confusing is, you said that because of the seasonality, the volume growth is lower. So was there a substantial increase in the price also? Realization, specifically for LGD.
No, no. Sunil, see, I think, the LGD price is driven by the fact that, a significant mix of the business in this quarter was towards the, lab-grown and natural diamond, versus the large component of this in quarter four last year, which was towards jewelry, because that was a Diwali quarter. So that's the reason why you see a volume growth, because, the realization on jewelry is much lower than the realization on lab-grown and natural diamond loose stones. So that's the way, that's why, 11% volume growth is translating to a, a 23%, overall certification growth or a 30-odd%, lab-grown, revenue growth. So you have to s o that is the reason why you're seeing a lower volume growth, because normally, the jewelry is a volume business with low realizations.
Whereas natural diamond loose and jewelry, lab-grown loose stones are a higher ASP or a higher price realization, higher certificate realization, components of our business.
Because jewelry has too many diamonds and that need to be there, the realization comes at as a common and which is lower.
That's-
That's why we are seeing lower volume growth.
That's right.
Okay, got it. Okay, fine. If we see LGD pure volume growth, will be in line with, what you are doing?
Sorry, Sunil, I didn't get that.
The LGD revenue growth is 34%, and if the realizations are year-on-year up by almost around 10%. So, maybe 20%+ LGD volume growth will be there.
That's right.
Sure. Okay. Okay, and any planning to take any price increase in the LGD?
At the moment, there are no considerations in terms of changing the price structure.
Okay. Great, sir. Thank you very much.
Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, kindly limit the questions to two per participant. Our next question is from the line of Pradyumna Choudhary from JM Financial Group Investments. Please go ahead.
Yeah, hi, sir, just one question, as a follow-up to previous participant. You spoke about pricing for jewelry being lower than, a pricing for, loose diamonds, on a per report basis. So, could you please explain the same, why, why is the pricing in jewelry lower compared to, what we see for loose diamonds?
Where loose diamonds is concerned, we give you the exact grades, and we take each loose diamond and put it through 14 parameters. Now, when you come to jewelry, there is a cluster of diamonds, small ones, of even color and even clarity, and it is all mounted. So when you pick up a piece which has, say, 100 diamonds, you are reviewing 100 diamonds at a stretch, at one shot. Also, that we give you split grades. We don't give you exact VVS one, VVS two, we give you VVS. So it's a split grade, and the grading goes much faster. And from that perspective, the jewelry price and also the value of the smaller diamonds is much less. So taking all these into account, the jewelry certification prices is lower than the loose stone prices.
All right. So, when you talk about pricing per report, that it means that you're pricing either a loose diamond or an entire jewelry. That's right, right?
Yeah. Yes.
Understood. All right. Thank you.
Thank you. Our next question is from the line of Angad Katdare from Samiksha Capital. Please go ahead.
Thank you for the opportunity, and, congrats, sir, for the great set of numbers. There is one question from my end, sir. In India, the largest organized retailer has launched its own LGD brand, and, we have found out that they are not, giving, you know, the IGI certified, certification. They are doing their own certification. How do you see this as a precedent evolving over the next couple of years, where maybe as more organized retailers take market share in LGD, this similar trend may or may not continue? What's your thoughts, what's your thought on this, this market?
Okay, it's a very good question. See, what has happened is this is the first time that a large retailer has ventured specifically and openly into the LGD market, into the LGD market, okay? Now, initially, they are, I think, in the testing phases, and they are grading the four Cs. They are saying that this is the quality of the diamond that we are going to sell, and they are doing market research currently, as I believe. We are already in touch with, we are in conversation with these, with this grower, with this, company. And most important, what you have to understand is that a third-party independent certification is the most important aspect when you are buying a certificate.
So I believe in the long run, in future, in very short future, we will know which way this company will go. As per our thoughts, we are there to give you a third-party independent certification. This is communicated to the company, and we will see how it goes.
Thank you, sir.
Yeah.
Thank you. Our next question is from the line of Nitin from NV Alpha. Please go ahead.
Hi, sir. Thanks for taking my question, and congrats on a very good set of numbers. So my first question is, you know, just wanted to understand, do our realization per certificate now stabilize around the INR 950 levels that we have? Or how do you see these trending over the next few years?
I think we've maintained a consistent ASP over the last four, five quarters, Nitin. I think, as we mentioned earlier, structurally, there has been no change at the industry level as far as the pricing of natural diamond and lab-grown diamond are concerned, and therefore, we don't anticipate any structural change to our pricing model as well.
Got it. And, sir, in terms of revenue mix between, say, loose diamonds, both ND and LGD versus jewelry, do you see, how do you see the contribution changing, you know, does it remain same if I look at it year-over-year basis, and changes quarterly basis, festives or how is it, or do you expect it to change?
Actually, overall, from a 12-month standpoint, I think there's been a couple of percentage point shift towards natural diamond and lab-grown. And then, yes, going back to what we mentioned earlier, I think the trend in terms of significant capacity additions in lab-grown and loose stones is continuing. So I think that growth will continue to accelerate, coupled with the fact that lab-grown jewelry is an emerging trend within the Indian consumer space. So I guess these two segments will continue to see robust growth. And then strategically, I think it's important for IGI as an organization to improve its penetration and market share from a natural diamond segment as well.
We will continue to stay focused on each of these segments for the foreseeable future.
Sir, sorry, I'll just repeat my question. So what I'm trying to ask is, between loose, you know, loose and loose diamonds and.
Yeah, so we don't.
Because we are seeing.
We don't anticipate too much change as far as the, because if you look at it from a 12-month standpoint, it's just a +1 or 2% movement here or there. So that will continue, I think, because we are seeing strength across all segments, be it lab-grown jewelry or be it natural diamond loose or lab-grown. So yes, so I don't think there's going to be a dramatic shift from that standpoint.
Got it. And so my last question is, what is the cash on books we have as on date or as of for December end?
Yeah, I think it's around INR 800 crores, over INR 860 crores of cash across the group.
Got it. That's it from my side, sir. Thank you.
Thank you. Our next question is from the line of Varun Singh from AlfAccurate Advisors . Please go ahead.
Yeah, thank you. Am I audible?
Yes.
Sure. So my first question is, as you called out, that the lab-grown diamond prices are stable now. Sir, just wanted to understand that, you know, do you think that the lab-grown diamond prices can go up also, if not down, given the return on investment constraints which the LGD manufacturers are facing? I mean, please share some insights on this part of, you know, how to understand the lab-grown diamond price trajectory in future.
Every seller wishes that it goes up. But what happens?
Yeah, but I think,
I mean, be realistic. I mean, the price is stable, so it's more important that, you know, stability is in the market, and then we continue to grow.
So in that case, like, how to assume about realization, you know, that we are deriving from the lab-grown certificates. Like, how should that be growing, average realization , assuming everything is constant?
I think, Varun, I think we've articulated this, I think, and again, Mr. Printer just mentioned it. I think we are seeing a lot of consistency as far as pricing on lab-grown loose stones are concerned over the last five, six quarters. So I think the trend will continue the way it is. And, yeah, so again, we've been in the around 900-950 as far as ASP is concerned. So I think-
Mm.
Nothing structural. We don't foresee any structural changes here.
So technically, like for the model purpose, is it safe to assume same realization over the next two to three years? Or should we assume maybe 4%-5% decline in the realization when we are, you know, doing some math with regards to how we wish to grow the volume in the segment?
Varun, see, it will be very difficult for us to comment on the model assumptions that you take. But again, from an industry standpoint, we, you know, we just, as we said earlier, the, structurally, we are not seeing any significant change as far as the pricing is concerned.
Okay, sir. Thank you very much. Wish you all the best, sir.
Thank you. In the interest of time, that this was the last question. I now hand the conference over to the management for their closing comments.
Thanks, everybody, for taking the time. I am presuming that there have been still a few people who have not been able to place their questions during this call. Please reach out to us individually, and we can address some of these queries on a one-on-one basis. So thanks once again for your time. We appreciate it. Thank you once again.
Thank you very much.
Thank you. On behalf of International Gemological Institute, India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.