Ladies and gentlemen, good day and welcome to the P N Gadgil Jewellers Limited Q1 FY 2027 Conference Call. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aayush Adukia. Thank you, and over to you, sir.
Thank you, Ananya. Good afternoon, everyone. On behalf of Nuvama, it's a pleasure to welcome you to P N Gadgil Jewellers' Q1 FY 2027 earnings conference call. From the management today we have Dr. Saurabh Gadgil, Chairman and MD, and Mr. Deepak Vijay, CFO. I would like to hand over the call to the management for their opening remarks. Over to you, Saurabh.
Thank you. Good afternoon, everyone, and a very warm welcome to the Q1 FY 2027 earnings conference call of P N Gadgil Jewellers Limited. I hope you've had a great opportunity to review our financial results, investor presentation, and quarterly updates, which are uploaded on the exchanges and on the company's website. At the onset, I'd like to thank our customers, employees, franchisee partners, vendors, vendor partners, and shareholders for their continued trust. Their confidence has enabled us to deliver our highest-ever first quarter, beginning FY 2027 on a strong note. The Indian jewelry industry remained resilient throughout April to June, despite record gold prices. Demand was supported by weddings and an outstanding Akshaya Tritiya, with festive sales growing 80.3% YoY to INR 51.4 crores.
Customers continue to gravitate towards lightweight jewelry, studded products, and old gold exchange trends. That continues to favor trusted organized players with strong brand and transparent pricing. Against this backdrop, PNG delivered a revenue of INR 2,413 crores, up 41% YoY. EBITDA grew 57% YoY to INR 192.4 crores, with the EBITDA margin at 8%, while PAT grew 52% YoY to INR 105.3 crores, with a PAT margin at 4.4%. This performance reflects the strength of the PNG brand, healthy consumer demand across categories, and a continued focus on disciplined execution and operational excellence. Operationally, the quarter was about strengthening our existing network while preparing for the next phase. Site identification, franchisee onboarding, and execution planning for the expansion pipeline. We ended the quarter with 78 stores.
Looking ahead, we remain committed to opening around 25 stores during FY 2027, taking our network to approximately 103 stores by the year-end. A few launches are planned in Q2, while the bulk of expansion is planned across Q3 and Q4 through a franchisee-led approach across both legacy and lifestyle formats, deepening our presence in Maharashtra while expanding our reach in Uttar Pradesh, Bihar, Central India and NCR. Despite elevated gold prices, our performance remains in line with our previously communicated guidance. Supported by a 194-year-old legacy, disciplined execution, growing PAN-India presence, and a continued formalization of the jewelry industry, we remain confident of delivering sustainable growth throughout FY 2027. With that, I'll hand over the call to our Chief Financial Officer, Mr. Deepak Vijay.
Thank you, Saurabh, and good afternoon, everybody. Let me take you through the financial performance for the quarter ended June 30, 2026. Conso revenue from operations grew 41% year-over-year to INR 2,413 crores, driven by broad-based growth across retail, franchisee, and e-commerce. Retail grew 56% on the back of 46% SSG. Franchisee grew 8% and e-commerce grew 20%, reflecting continued traction across marketplaces, our D2C platform, and digital initiatives. Gross profit for the quarter stood at INR 119.6 crores with gross margin of 13.2%. EBITDA stood at INR 192.4 crores, up 57% year-over-year, with EBITDA margin expanding 80 basis points to 8%. Profit after tax stood at INR 105.3 crores, up 52% year-over-year, with PAT margin up 40 basis points to 4.4%. Basic EPS came in at INR 7.8 against INR 5.1 in quarter one last year. Our studded jewelry strategy continues to gain traction.
Retail studded ratio improved to 10.9 from 9.9 in the previous quarter, with our recently launched stores in North and Central India already running studded ratios of 15% to 18%, well ahead of our mature Maharashtra network. While LiteStyle by PNG posted a studded ratio of 32.9%. Our gold bars and coins business also continues to strengthen customer engagement, with 53% of gold bars and coins purchases converting into jewelry this quarter, up from 46% in the last year. On revenue mix, retail contribution rose to approximately 78% of total revenue, while bullion sales normalized to around 22% of retail revenue. As we move through the year, capital allocation will remain focused on high return store expansion, strengthening our franchise network, Digital investments and operational excellence. With that, we conclude our opening remarks and would now be happy to take your questions. Thank you.
Thank you. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking the question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Yash Sonthaliya from Edelweiss. Please go ahead.
Hi. Thank you team for taking my questions, and congratulations on a good set of numbers. Am I audible?
Yes, you are audible, Yash. Yeah.
Yeah. My first question is on gross margin. Why our gross margin is pretty much flat? While if I see the change in mix, we have seen a very good mix changing towards retail, which is one of the highest margin revenue for us. How to understand this flat margin?
If you see, you have to also compare the adjusted gross margin, wherein we have given the hedging gains separately, Yash. If you remove that, the adjusted gross margins, we have increased it by kind of 40, you'll have to compare this compared to last year.
Got it.
Yeah.
One more follow-up on the same. Basically, I really want to understand how to read the retail margin for the business, right? Because in retail also, there is a huge sale of less studded or maybe plain gold type jewelry. What is the ideal retail margin for our business when the studded ratio is in the range of 10%-11%?
Yeah. The stud have a different margin as compared to the gold metal jewelry, plain jewelry. These are distinctly very different. Within a stud ratio of 10%-11%, we should be in the range of somewhere between 12.5% and 13.5%, is what we should target.
Got it. This assuming around 20, sorry.
We are saying in the retail sale, our sale of jewelry increased to now 80%, 20% is only bars and coins. Keeping that and looking at studded plain gold and bars and coins in the retail category, the gross margin should be like you first said, between 13% and 14%. Ideally, this is what we have been talking on, and we have been also able to give a guidance on the gross margins, considering the impact of hedging gains, which are shown separately in our presentation.
Got it. Makes sense. One last question. With our store expansion happening, ideally, what our understanding is the other expense will also increase with the same amount. In this quarter, the other expenses only increased by 5%. Any specific efficiency or?
I'll take this question, Yash. Yes, the other expenses have not moved in the same proportion as the sales. A couple of reasons. Firstly, with the demand or the things which have happened in the industry in the beginning of the quarter, we have gone very conservative on our expense. That is one, that we have just put kind of leash on any incremental expenses which we could do for the demand thing. That is in line with the industry going through the phase wherein the demand could be down. We have taken a conservative approach there. One is that. Second is the scheme redemptions which happens on these schemes. The discount on that scheme share is lower in this quarter compared to the last quarter. This has been two new thing. The marketing expense, we have also gone very conservative.
We have cut down the hoardings wherever, not required, 250, 300 hoardings have been cut down from what it was last year. We continue to monitor and keep our marketing cost within 1.5%, that is what has helped to keep the cost in check. There has been no stores which have been planned in the quarter, no travel, nothing has happened in that side. Going forward, in line with quarter three, quarter four, this should have some increase because the expansions are planned across quarter three and quarter four. Having said that, we are confident of delivering the guidance EBITDA within slightly higher cost or the comparable cost in quarter three, quarter four.
Makes sense. Thanks a lot, sir, for answering all the questions.
Thank you. Reminder for all participants, please press star and one to ask a question. Participants who wish to ask a question may press star and one. The next question is from the line of Smit Kala from RSPN Ventures. Please go ahead.
Thank you for the opportunity and congratulations on a good set of numbers. My first question was in line with the sale of coins, et cetera, which were elevated in the last quarter and which have cooled down this quarter. It is my request to the management that can this number be given separately in the presentation? What is the difference between the other section in the segmental reporting which we give in the PPT and the 21%, 22% which we are mentioning of gold coins, et cetera, as a part of retail revenue?
In retail what I mentioned as bars and coins, this is what we talk of the pure gold, what we sell at the store. This time we have gone and mentioned, we have given the details of that the average ticket value is less than 5 g of the coins and bars sold at the retail counter. Out of that, more than 50% have converted into jewelry. This is a productive sale for us. The others which I mentioned is primarily the corporate sales, what we do if our companies in bulk orders. That's a very small, minuscule number.
That's why we put it in other but g oing ahead, we would have three categories, like I mentioned, retail, out of which roughly around 78% to 79% would be jewelry, 20% to 21% would be bars and coins, and then the second level would be the franchising, and the third arm would be e-commerce.
Okay. That was helpful. The next question from my side, same, as a continuation to the question of previous participant on the other expenses. We have seen a big reduction as far as other expenses concerned while you alluded the reasons for the reduction, primarily no new store openings, et cetera. On a normalized basis, what are the kind of other expenses what we are looking at as a percentage of sales?
See, in the guidance given by us, we will be on the same line. Q1 was little low because we planned this quarter to really focus more on the existing store network. We had reduced marketing to a large extent since there are no further brand building required in new areas, and we're focusing a lot on ground activities. It was also a season when we didn't really have to spend anything more on travel or other side. Going ahead with the annualized other expenses which we had planned for the year, Deepak will just give number to you, should be on track.
Should I wait for the number?
Just a minute.
Yeah.
I'm just adding the number together.
Okay.
The other expenses, as we said, will be in the range of, let's say, 3% round about the total sale. Range of roughly INR 200 crores is whatever we are looking at for the entire year. Hello? Hello? Hello?
Ladies and gentlemen, wait for a moment. I will be reconnecting the previous participant.
Hello?
Just a moment, sir. We are reconnecting.
You doing pass through now, sir? Hello.
Hello.
Hello.
Yeah.
Am I audible?
Yes, audible.
Yeah.
The call dropped in between.
On the other income bit, I understand that accounting for the hedging takes place at the gross margin level. The difference in the other income from INR 31 odd crores in Q4 versus INR 10 crores in Q1. What plays that?
Other income is primarily the interest part on the fixed deposits which we have.
This fluctuation is so vast. I assume interest should be more or less equally distributed across quarters.
This will be equally distributed. The FDs which we have put on mortgage has come down from last year, and that's the major difference.
The difference is huge, from INR 31 crores odd of other income to just INR 10 crores in this quarter.
No. Last quarter, just give me a second.
I think last quarter, the number which we reported is around about INR 12 crore of other income, not INR 31.
Wait.
Just check. Let me also check, to my knowledge, the number is INR 12 crores.
INR 31 is Q4.
Is Q4 is INR 31 is Q4?
Yes. I was talking about Q4 only, INR 31 crores. Yes.
We have dropped down the FDs from the balances also.
Yeah. All the money which was redeemed from the FDs is sitting on cash on the balance sheet, is it in Q1?
It's on the cash also, and we have put some money for the margin for the hedging part also.
Okay. We will be doing around 7% of EBITDA margins for the full year. Is that your guidance?
Yes, the guidance.
Okay. Thank you, that's all from my side.
Thank you. The next question is from the line of Raj Shah from Three Bridges Capital. Please go ahead.
Hello. Are you able to hear me?
Yeah. Go ahead.
Yeah. Sorry. I was asking, in terms of our standalone stores, we are currently at 65. Two, three years down and in P N Gadgil franchise stores, what kind of store addition do you see going forward in terms of our standalone? What will be the mix of COCO and Franchise Owned ?
Hi. Right now we are at 58 COCO stores, and 20 FOCO stores, between legacy and LiteStyle. We plan to add 25 stores this year, and the count will be 103 in total, with 63 stores as COCO and the balance is FOCO. Next year, 2027, 2028, we plan to add around about 37 stores again, with the proceeds which we will have from the profit which will accrue. We will be adding 37 more stores. The COCO count will become 86, and the franchisee stores will be 54, and the total count will be 140 then. Will be 177. We will add 37 stores. This year we'll add 25 stores, and the next two years we'll add 37 stores. 103 becomes 140 become 177.
Just to add to that, out of that, we're looking at around 113 stores would be our legacy stores, and around 64 stores would be the LiteStyle stores as of March 2029.
Sorry. What did you mention, the breakup?
As of March 2029, we should be at a number of around 177 stores, out of which 113 would be the PNG legacy stores and around 64 would be LiteStyle stores. That is the plan for three years.
Okay, understood. Majority of the new store expansion should come under FOCO, I mean, 60%/70% of the new stores, right?
As of March 2029, we are looking at around the 75 stores would be COCO and around 40 stores would be FOCO.
Understood.
This year the plan would be to expand more on the FOCO side because last year we had expanded more on the COCO side. Going ahead, after that, the next two years would be a combination of COCO and FOCO.
Understood. What kind of gross margins you will see three years out? I'm understanding gross margins will be lower, but we'll be consequently have lower employee and other expenses, so our EBITDA margins might be improving trajectory. In terms of gross margins, what kind of margins do we see three years out and resultant EBITDA margin, sir?
Yeah. While we will have a gross margin deflection from the FOCO stores increasing, but at an EBITDA level, we will be progressing. At a PAT level, we target to be at 4.5% to 4.7% by FY 2029, which is around about 4.4% right now.
Understood. If I move to the last question.
Gross margin levels won't be comparable like that.
Correct.
The dilution in the top margin, but the same margin flows into my PPT for the franchisee margin because we don't incur any cost there. At a PAT level, we should be in the range of 4.7% by FY 2029 and more.
Understood. Just last question, in terms of our borrowings currently, what is the mix of GML in our borrowings and how do you see this borrowing moving from here? Because the organic store expansion might be lower. We do FOCO more, the operating cash flow that we generate, should it be used to run down the borrowings or how do we see this mix going forward?
Our borrowing, without GML, is in the range of INR 1,200 crores, which is in line with what we had in March. No major movement there. In terms of GML, we have around about INR 3,400 crores of banking limits, the loan right now on gold metal loans. Going forward, the projection is that the entire loan, which is around about INR 1,550 crores, FY 2029, we plan to reduce it by INR 500 crores to INR 600 crores and will be below INR 1,000 crores by FY 2029 and in couple of more years, we should be debt-free in next, let's say, four, five years. Yeah.
Understood. Thank you so much.
Thank you. The next question is from the line of Naveen Trivedi from Motilal Oswal. Please go ahead.
Good afternoon, everyone. Sir, one question on the Adhik Maas, which I am sure that would have impacted your quarter one performance also. Can we expect the Adhik Maas, which would have postponed the wedding season, can benefit in the coming quarters?
Adhik Maas was not a big turnout this year. Primarily, silver prices hovering at a high level. Silver is an item sought after during Adhik Maas. Adhik Maas has seen routine sales. It was not like a standout season. Weddings, like you said, sir, because of the additional month, weddings would be a driver. Q2 or a large portion of Q3 should benefit from the wedding which have been postponed by a month.
Sure. In terms of our SSGs, if I look at our overall growth rates are 41%, correct? Retail growth is 56%. When I look at the SSG, is it only pertinent to retail growth rates, which is like 46%, which we had reported?
Yes, this is retail SSG.
Sure. Fair point. In this quarter, we had shared the hedging gains for this quarter and the last year also, correct?
Yes.
Can you also share the similar numbers for the last year, how these three quarters has kind of, for the remaining three quarters and for the FY 2026?
I think in the last call, we reported the numbers for Quarter three and Quarter four as INR 45 crores and INR 20 crores of gains. In Quarter two, the upside and the downside was not much. It was netted off. That number is in the range of around about INR 5 .5 crores, INR 6 crores. That's what I remember on top of my head.
INR 45 crores Quarter four, correct?
Quarter three.
Quarter three was INR 45 crores?
That plus the margins were very high that particular quarter with all of the INR 45 crores gains sitting there. Yeah.
Sorry, I missed out Quarter four.
Quarter four was INR 20. That's what we reported last time.
Sure. Fair point. Now we are talking about going back to our hedging percentage to go up to 80%, 90%. What are the timelines to achieve those percentages?
80%, I feel should be doable before Diwali or maybe Quarter three, we can target 80 to be around about Quarter three. Next year we should be touching 90 plus 100, in the range of 90 to 100 there.
I mean, the intent for next financial is to be fully hedged. We had gone down because of the margin increase, so we have come to 70% plus. Q2, we should be looking at reaching around 80. I think next year the plan is to be committed to be fully hedged.
Fair point. Just one bit of other expenses I'd also like, you kind of communicated about reaching to INR 400 crore kind of a number. Is it only the marketing heads where which will give you close to INR 100 crore plus sort of a cut, versus last year?
You mean the overall marketing, you're talking overall other expenses?
Yeah. You mentioned about last year we did close to INR 500 crore plus number.
Yeah. Last year, two, three triggers why it was very high. Firstly, the U.P. launch, which was pretty heavy on the PNL. Around about INR 40 to 50 crores have gone into U.P. and the new celebrity endorsements, which has gone there. That's a big top line, which will not happen this year straightforward because U.P. is already launched now and we just go with the organic marketing there and not anything extravagant. That was one part of it. Also, the marketing to sale and foundation day sale. This year we have no plans. The scheme part of it, which is not related because this was more of marketing campaigns. That was looked at with the other expenses. That also will not happen. That was one-time exercise, will not repeat it.
Naveen, on the side of other expenses, major portion saving would be from one-time branding, marketing, which was done to look at the Central India belt. We got entire campaign of the Petra campaign into decision, establishing brand there. All levels different and we crossed the $10 million mark last year with gratitude sales. They also will be offered during that. All these one-time expenses which added to the other expenses.
Sorry to interrupt, sir. Sir, sorry to interrupt. Your voice is coming with a lot of disturbance. Could you please try maybe speaking near the mic?
Yeah. Naveen, are you there?
Yeah, I'm there. Yeah, your voice was not very audible. Yeah.
Yes.
No, I said both of the, what we might call one-time expenses.
It's coming out very disturbed.
Is it okay now? From our side, there's no disturbance.
It is better, sir.
It's better now.
Please continue.
I think I've answered the question. Naveen, anything else from your side?
Just two things from my side. This last year, we did close to INR 75 crore inventory gain. If I look at on a profitability side, there would be like 50, 60 basis point kind of a benefit at least on the net profit margin. I think the underlying margins would be close to 3.2 to 3.3 on a yearly basis. How are we seeing this? Given now our expenses line will kind of we'll see tapering down, and given now that there is up and down in the gold side also has played out. How are we seeing profit margins this year?
As we are growing more on the hedging, so the hedging gains will slowly. Hello? Hi, Naveen.
Hello. Yeah. I was asking about our net profit margin percentages.
That margin should be in the range of around 4.2. Yeah, we should be upwards four, between 4.1 and 4.25 is what we are targeting. I mean, this is underlying without any kind of hedging gains. We are also ensuring that the expenses doesn't go up. That's a very aggressive target we also have taken, but let's see, we should be able to pull it off with that marketing cuts which we have taken this year.
Sure. That's all from my side.
Thank you. The next question is from Subhanu Bangal from Three Head Capital. Please go ahead.
Yeah, good afternoon. Hope I am audible. Sir, my question on the LiteStyle format. Like current, our stud mix around 32%. Hello?
Yeah, your audio. Go ahead.
Yeah. In the same segment, many of our listed peers are keeping the stud ratio above 50%, 60% or so, they are doing around 30%, 35% gross margin. My question on why we are keeping the stud ratio around 30% to 35% although we have opened this format for high stud mix business. Second, what kind of GM we are doing currently? GM means gross margin we are doing. Third, last year you guided you want to open around 100 stores by 2030 in the LiteStyle format. Are you on track to achieve this guidance?
Your first question on the LiteStyle, why is the stud ratio? Hello? Can you hear us now?
No, sir. Still breaking.
Sir, your voice is cracking up a lot.
It's the same. Okay, I'm going to try. There's no difference. There's no change. I don't know why it's cracking.
Yes, sir.
Is it audible now?
Could you please say a line? I'll check.
No. Is it audible now?
Yes, it is audible now. Continue, please.
Yeah. On the LiteStyle, as I mentioned last, we started LiteStyle more on the gold side, looking at around 80% inventory of gold and only 15% to 18% in studded. Through the journey, through people's experiences, we realized that studded has to go up, and that is how we have been slowly working on the merchandise mix. Eventually, we plan to take it to 80% studded inventory at a store level and 20% gold inventory, and that will also enable us to reach a 50% to 60% studded ratio in that category. Hello?
Yeah. I'm here.
Once that happens, the margin again would be like the industry, around 30% to 35% margins on the LiteStyle format. On the store size, we have right now spoken up to March of 2029, where we are looking at reaching around a 65 to 70 store mark for LiteStyle. As we go ahead, in the next three years, we should be aiming to reach the 100 store mark for LiteStyle.
Okay. What was the current gross margin?
The current gross margin in LiteStyle is in the range around 18% to 20%.
When we can expect this studded mix can go up to 80%?
I'd say the next two years, because right now we have changed the entire merchandise mix. Our current studded ratio is 34%, which we expect in next year they expect to be doubling from here.
Yeah. Great.
The studded ratio right now in LS is right around about that percent. This will go up with the change of merchandise mix Saurabh has mentioned. Yeah, we're looking at around about 50% in next couple of years with that.
Okay, great. Best of luck, sir.
Thank you.
Thank you. The next question is from the line of Nitin Jain from Fairvalue Equity Advisory. Please go ahead.
Yeah. Thank you for the opportunity, and congratulations on an excellent quarter. My first question is in the retail segment, like we have done very well this quarter despite the Adhik Maas, but both franchisee and e-commerce, they have been slightly muted. What reason you would attribute to this?
See, the franchisee, like we have mentioned in the update, we are looking at finalizing franchisees working on the store setup, the franchise number will pick up in Q2 and Q3. We have around, on the legacy side, around 10 franchisees planned for the entire year and around five on the LiteStyle format. The number will pick up as we move ahead. Your second question was on?
E-commerce.
Yeah, e-commerce, we have taken a conscious decision of focusing more on the jewelry side and reducing the bars and coin sales there. It's more of a decision by the company to focus on jewelry, both studded and plain gold on the e-com site. E-com will see better margins, but may see a little slowdown there, a little decrease in total sales.
Right. Also, the inventory ratio we have today is close to 4 x, but according to the presentation, it was nearer to 8 x, almost 8 x two years ago. What do you think has caused this big dip in inventory ratio?
The ratio around 7-
Hello?
Hello.
Yeah.
The ratio around 7, that primarily was when we were doing the refinery sale and there was a lot of B2B sales. After that, everything has been rationalized. We had also given a guidance of the stock turns stabilizing at around three and a half to four, and that is where we are today. This was as per the guidance given and after ending the refinery sale and B2B sales.
Great. That's very helpful. My last question is on the promoter shareholding. Right now it's greater than 75% and it kind of seems to be an overhang on the stock. Do we have plans to bring it down in the near future?
The plans are there. Definitely, we already have a board resolution into the effect. We are monitoring the market, and at a suitable time, we'll definitely come up with a QIP to get the shareholding to the desired level.
Great. Thank you so much. Just one last observation. Recently, I was in Ayodhya for the darshan of Shri Ram Mandir, and I saw a hoarding of PNG Jewellers just right outside the Mandir. The area had very good footfall and excellent visibility. Congratulations on the management on that. All the best.
Thank you. We are opening a store soon in Ayodhya.
Okay.
Next time when you go there, you can also see the PNG store there.
Great. Thank you.
Thank you.
Thank you. The next question is from the line of Yash Sonthaliya from Edelweiss. Please go ahead.
Hi. Thanks for the follow-up. Sorry for the confusion, I again wanted to ask on gross profit margin only on the YoY basis. Hedging gains are very similar on YoY basis. Ideally, like you already alluded, we have done a really good job on increasing the retail revenue and the mix of jewelry in the retail, and also reduces the discounts or the off schemes we provide. Ideally, this should have increased our gross margin. What is the reason the gross margins are flat?
Yes. The hedging gain last year was on a lower base of the retail and the same similar hedging gain we have on the bigger base this year. When you put the adjusted margins net of the hedging gains, you will see the profits increasing there.
Yeah, Yash. You there?
Yes. Basically 20 basis points, I understood the base effect, ideally what my understanding was the margins would have improved more with the mix change. Got your point on that part.
Basically, these new businesses or the new territories, the share of these new territories in the overall retail mix is around about 3%. The sister ratio might see bigger number there, to translate into a visible margin gain, this U.P. and Central India revenue share in the retail mix has to really increase there. That's where we'll have to focus couple of years down the line when U.P. and Central India becomes a bigger share of our retail margin, you will see the better margin numbers there as compared to that.
Got it. One last question is on the franchise part of the business, not talking about the growth of the stores, but on the revenue growth. Like we only have seen 8% revenue growth, while the same in our own stores, the growth is higher. Why such high discrepancy and how it impacts the economics for a franchise partner?
I'll take the question on the franchisee growth being muted at 8% for this year. Franchisee, how generally we do one stock When we start the franchising, that time it is 100% when stock turn happens because they pay up, we stock up there. That's the part of the sales which we book. Now, the replenishment happens there on a weekly basis and as and when required, and also franchisee also sometimes has to pay up the money and then get the stock. There could be some timing differences which could come in from when the money is paid and when the stock is completely sold there. Franchisee is the books, the sales which we record is not B2C, it is B2B.
The stores might still have an inventory or the investor has not paid up the money, they might want to pay up a couple of days ahead. Those all mixes happens in franchises. Franchisee, apple to apple, on a quarter-to-quarter, these differences which will come. Having said that, we understand because franchisee is our focus now, will be becoming big. We have taken access of the systems from franchisee, and we will be monitoring the B2C environment very closely and the customer demands closely, and you will see the better economics coming from franchisee on the B2C level as well. This has become our focus now and we are continuously working with the franchisee partners to get access on the B2C data.
Got it. Thanks a lot.
Yeah.
Thank you. The next question is from the line of Ayush from Nuvama. Please go ahead.
Thanks. Just one question from my end. We are going good on Maharashtra. Are we seeing any cannibalization signs, particularly in the state? Also, are we gaining any share from the likes of Kalyan and Tanishq?
Aayush, can you just repeat the question again, please?
In Maharashtra-
Hello?
Am I audible? Yeah.
Yeah. Go ahead.
In Maharashtra, we are doing good expansion.
Are we seeing any cannibalization?
From?
Within the stores. From our stores only.
Our expansion is planned in a strategic way. Which area we are expanding, we look at the catchment area, which are the customer base there, only if it's the catchment area to serve for a new store, even a new store. Cannibalization, which will impact the existing store and new store is not happening. Some natural cannibalization will definitely be there. That's always factored in when you enter a new store, that some stores may lose some portion of their sale. Those stores also address new customers and we're able to still top it up and grow as we move ahead.
Also to add to what Saurabh has said, that when we go for the franchisee stores or our own stores in a similar territory, there is a framework and guidelines which we use, wherein there has to be a particular kilometers apart. These stores have to serve two different catchments, and they should not eat up into each other's sales. That is also a guiding factor and a framework when we choose which location to open the new store or a franchisee store. Aayush, also the other question I think you asked was about gaining share from competition. There's definitely a share which we are trying to gain from competition within Maharashtra. Also, the unorganized segment is something which is moving fast towards organized, and that's why getting a lot of new customers.
Our CRM is actively working on ensuring that we keep on having a healthy share of new customers and also being able to dive deeper into our existing set of customers.
Understood, sir. Just one more bit, sir. On our U.P. expansion, how has been the initial feedback of our stores?
U.P. has gone well, on track as per our plans. We have been always mentioning during last couple of calls that we had made some projections for U.P. in terms of stock turn, in terms of studied mix, and I think we are on track for that. We still haven't finished a year, so some stores are only three or four months old. The older stores are also on track, and I think U.P. expansion looks to be satisfactory, looks to be good. I think studied, which we had projected at 15%, already upwards of 18%, which can still see further growth. I think those markets have accepted the brand well, and that's another reason why we are seeing almost eight to 10 franchises opening in U.P. in this financial year.
All right. That sounds good. Thank you.
Thank you. Thank you.
Thank you. Ladies and gentlemen, due to time constraints, that was the last question today. I now hand over to the management for the closing remarks.
Thank you everyone for joining today's call and your continued interest in P N Gadgil Jewellers. We appreciate your insightful questions and continued support. Should you require any additional information, please feel free to reach us at our investor relation partner, X-B4 Advisory. Thank you, and have a wonderful evening ahead.
Thank you. On behalf of P N Gadgil Jewellers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Thank you