Ladies and gentlemen, good day, and welcome to P N Gadgil Jewellers Limited Q3 FY 2026 Earnings Conference Call. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rajiv Bharti from Nuvama Wealth Management. Thank you and over to you, sir.
Thank you, Shruti. On behalf of Nuvama, it is our absolute pleasure to welcome you all to P N Gadgil Jewellers Q3 FY 2026 earnings conference call. From the management, today we have Mr. Saurabh Gadgil, Chairman and Managing Director. I will now hand over the call to the management for the opening remarks. Over to you, Saurabh.
Thank you, Rajiv. Good afternoon, everyone, and thank you for joining us today for the P N Gadgil Jewellers Q3 FY 2026 earnings call. I hope all of you have had an opportunity to review our financial results, our press release, and the investor presentation, which are also available on the stock exchanges and on the company's website. I would like to welcome Mr. Deepak Vijay, who has recently joined the company as the Chief Financial Officer. Coming to numbers, this quarter gold prices continued their upward trajectory, marking a rise of over 70% year-over-year and 15% on a quarter-on-quarter basis. Despite the elevated price levels, the consumer sentiment remained resilient. The quarter witnessed strong momentum starting with Dussehra, gaining further traction during Diwali, and ending on a positive note aided by the wedding season.
Traditional gold jewelry remained the core focus while lightweight jewelry continued its upward shift amid price volatility and shifting consumer preferences. We launched three exclusive Company-Owned stores during the quarter, marking our entry into Patna, Bihar and taking our store count to 66 at the end of the quarter. Starting with a strong presence in Maharashtra, PNG has steadily expanded its footprint to five states across India, with operations now spanning Maharashtra, Goa, Madhya Pradesh, Bihar, and Uttar Pradesh. We have also strengthened our brand outreach across India by appointing Ranbir Kapoor as the new Co-Brand Ambassador, ushering a new chapter of legacy and modernity. We have also onboarded Sara Tendulkar as the Brand Ambassador for LiteStyle, marking a key step in strengthening the brand connection with India's future jewelry consumers. I will now walk you through the financial highlights for Q3 of FY 2026.
For the quarter, consolidated revenue from operations grew by 35.6% year-on-year to INR 3,302 crores. Gross profit rose by 19.2% year-on-year to INR 474 crores. EBITDA grew by 109.4% to INR 271.7 crores while net profit surged 98.6% year-on-year to INR 170.9 crores with the net profit margin standing at 5.2%. For the nine months ended FY 2026, the consolidated revenue from operations stood at INR 7,194.8 crores.
Gross profit rose by 86.8% year-on-year to INR 957.9 crores, with the gross margin standing at 13.2% while EBITDA grew by 105.3% to INR 537.7 crores with an EBITDA margin of 7.5%. Net profit for the same surged by 104.5% year-on-year to INR 319.6 crores with a net profit margin at 4.4%. The retail segment contributed INR 5,524.4 crores in revenue, a 34.5% year-on-year growth, and accounted for 76.8% of total sales, reinforcing the position as the company's primary growth driver. E-commerce and franchisee segments also reported strong performances.
E-com revenues stood at INR 377.4 crores, registering a growth of 125.8% YoY, while the franchisee revenue rose to INR 864.8 crores, reflecting a 55.4% increase YoY. On the customer front, engagement continued to strengthen. Our transaction volume was up by 35% with an average transaction value, that is ATV, of INR 1.0003065 crores. Footfalls grew by 33% supported by a strong conversion rate of 94% demonstrating sustained consumer interest despite volatile gold prices. Festive demand was a key growth driver in this quarter with record-breaking sales of INR 190 crore+ on Dussehra and INR 606 crores on Diwali, leading to the highest ever monthly sale of INR 1,800 crores in October month.
At the store level, the same-store growth continued strong for the quarter was at 33% and for nine months December ending 2025 average revenue per store stood at INR 109 crores. Revenue per sq ft was INR 342,800 with a net profit of INR 4.8 crores per store. We also witnessed a meaningful increase in the studded jewelry mix, which was 52%, taking the stud ratio to 8.4%, reflecting a continued shift in consumer preferences towards studded jewelry. The inventory turnover remained healthy at 3.2 times, underscoring sustained operational efficiency and profitability.
In the current quarter, we plan to add approximately 11 to 12 new stores comprising a mix of COCO Company-Owned and FOCO Franchisee-Owned stores across Maharashtra and the central India region, enabling us to reach our target of 78 to 80 stores by March 2026. Looking ahead, we are optimistic about sustaining this growth momentum, with the ongoing wedding season expected to drive further consumer demand. In summary, Q3 FY 2026 marks another chapter of robust and broad-based performance with strong category momentum, healthy profitability, and expanding geographical reach. This concludes the financial highlights for the quarter. We can now open the floor for questions. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets for asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is on the line of Pulkit from Dalma Capital Management. Please proceed.
Thank you for the opportunity and congrats on the good set of numbers. The first question is on gross margin itself. There is a sizable jump QOQ and YOY. In a rising gold price scenario, one tends to sometimes believe that this might reflect some kind of gold price gain as well in inventory. Can you help us understand better what drove this kind of gross margin?
Thank you. The gross margins, we had also given projection at the beginning of the year that we see increase in gross margin. Primarily, the first reason was that we had stopped the sale of the zero-margin refinery business. That was definitely a key factor which would have impact on margin. Having said that, another focus area for us is called the studded jewelry mix. That has shown a considerable increase. We have increased by 52% in value, and that has been another contributor to the margin rise. Thirdly, our foray into the LiteStyle jewelry segment by LiteStyle by PNG, which is more of a diamond and studded jewelry category, is also yielding good results.
All this in combination has been able to give us a good margin increase, and I think this is something which was also given to us as a guidance at the beginning of the year.
The first two aspects that you mentioned probably may not be as relevant simply because, on a YOY basis, that part of refinery is already in the base.
No, the refinery was there in FY 2024, 2025, 2026 for six months, we had the business of refinery.
Yes. When I'm comparing YOY, I'm comparing Q4 FY 2025 to I mean, Q3 FY 2025 has 10.8%, Q4 had 12%. Last four quarters.
Quarter-over-quarter. Okay.
I mean, 10.2, 12, and last 30 is 13.4. Studded mix hasn't really changed much quarter-over-quarter. I'm really struggling to understand what has changed.
Studded mix has definitely changed. We have seen a quarter-over-quarter increase of 52%.
Oh.
LiteStyle which was not there last quarter, LiteStyle today is standing at six stores. That also has added high margins to the entire business.
Okay. How much to the overall sales?
Sorry?
How much does it contribute to overall?
I can't hear you. Can you speak a little louder, please?
How much does that LiteStyle business contribute to overall sales revenue? The contribution.
LiteStyle is growing. LiteStyle is not a very big contributor. LiteStyle, if you look at it, should be around 5%, 6% of the entire sales.
Okay. In your opinion, there's no aspect of gold inventory gain in this. I mean, you're completely hedged.
We are fully hedged. There is no effect of the price increase on that. Like I mentioned in the call before that, there is a portion of silver which is not hedged, that's not a big number. The primary margin increase has been due to studded LiteStyle and due to a focus on operational efficiencies.
Silver price has gone quite substantial, you're saying that?
It's Q4. It's not in Q3.
Okay. Lastly, just from your experiences in U.P., Bihar, can you talk a bit more about it, and what are your plans there? What kind of confidence are you getting in medium-term expansion strategy?
Look, in last conference call, we had mentioned that they had started both U.P. Both the stores have started on a positive note. By that, I mean that the footfall was encouraging and we were experiencing what we had expected. Q3 has even seen the same thing, more amplified in both the stores in Lucknow and in Kanpur. The inventory mix there is more inclined towards studded, more inclined towards fancy jewelry than what we used to sell in Maharashtra here. That's another aspect also has added to the growth in the studded category. The response has been positive. The footfalls are encouraging, and both U.P. and Bihar, both the states are emerging as good states for the brand.
To further strengthen our positioning there, we have also signed up Ranbir Kapoor as the brand ambassador to take the legacy route and establish us as the premier legacy brand in the jewelry sector across India.
Right. The question is how many stores can be opened there for next three years? I mean, any plans? Is it firmed up yet or are you still evaluating?
In this quarter coming as we speak, next month we'll be launching two stores in U.P.. There'll be one in Gorakhpur and one in Banaras. Post that, there's a plan to also target more stores in Lucknow, Prayagraj, and other cities. Currently, U.P. as a state can accommodate around eight to 10 stores is the short-term plan for the brand.
Okay, great. Thank you so much, Saurabh.
Thank you.
Thank you. The next question is from the line of Yash from Edelweiss Public. Please proceed.
Hi, team. Thank you for taking my question. Congratulations on good set of numbers.
Thank you.
My first question is regarding, if I'm not wrong, in majority of our stores in Maharashtra, the reason for high asset turnover is also because some big chunk of our business come from make to order, right?
How are you seeing the same trajectory in the newer stores and in newer regions, like maybe Bihar or U.P.?
Are we seeing similar trajectory for make-to-order business? Are the numbers similar over there?
We had mentioned when we were in Maharashtra, the make to order had reached up to 40%, and in those states, I think we would be around 25% to 28%. Make to order business primarily works well in the jewelry categories where we have sizing problems. Bangles, earrings, finger rings, these are two main categories where we do a lot make to order, which also is the same policy there. Like I mentioned before, like we ship it from here to Nagpur, in the same way, we're shipping it from here to Lucknow, Kanpur, any other place. As of the model has not changed. The volume there is a little lower than Maharashtra because there the state is more towards fancy jewelry, more towards current jewelry, where we do not do make to order.
Understood. Which means it is right to assume we can have 3.5x inventory turnover over there after this rally of gold prices and everything.
That's right.
Got it. One more bookkeeping question, like what is the current mix of GML, and how we are planning to increase it going ahead?
See, GML is a portion which is There's GML, there is a future option, and then there's the old gold. These three primarily are the drivers which are a part of the hedging mechanism. Depending on the situation, we keep on shifting between these three variants. There is no fixed target as far as just GML is concerned.
Got it. What would be the current mix of these three as of today?
If you look at the total sales, the total stock, the old gold would be around 20%, GML should be another 20% to 25%, and FI gold should be the next 15% to 16%.
Got it. Thank you. Best of luck for the coming quarters.
Thank you. The next question is from the line of Gunit Singh from CounterCyclic PMS. Please proceed.
Hi, sir. Thank you for the opportunity. Our revenue for Q3 increased about 38% year-on-year. I just would like to understand what percentage of this increase is on account of higher gold prices?
On higher gold. Gold prices for the quarter have seen an increase, when we're looking at total revenue, our revenue primarily comes from the making charges income. As long as we are able to generate that making charge income, that is what we target on the company level. When you have higher prices, you see a volume dip, and simultaneously when prices go down, you see a volume hike.
All right, sir. I want to understand, for example, for the current quarter, gold prices have fallen by about, if I'm not wrong, 15%, 20%. I just would like to understand that in a scenario where, say, for example, gold prices fall by 10% or 20%, how is the revenue expected to be affected by this? Also, do our margins also get affected by a fall in price? What would be the effect of fall of 10% in gold prices on our margins also, both revenues and margins?
There wouldn't be an impact. Firstly, our margins are not dependent on the gold price movement. Our income primarily is from making charges. We have typically seen when rates go up, your volumes will take an impact, the margins would still remain the same because the value of the product is still there. I don't think it will have an impact on the margin per se. If the gold prices get lowered, we'll be seeing a higher volume, that would compensate for the margins. In that scenario, we are kind of hedged.
All right, sir. Is our hedging 100% on gold price movement?
As far as the effect, hedging will be 100%.
All right. Just to repeat what you said. Basically, even if gold price remains at the current level or goes down further, our revenue as well as margins should not be affected by a fall. I mean, it should depend on growth in business o r if in case we're adding stores, revenue should go up even though the gold prices fall. Is that the correct understanding?
Absolutely.
All right, sir. Thank you very much. That's all from my side.
Hi, sir. Abhiraj from
Thank you. The next question is from the line of Shivanu from Three Head Capital. Please proceed.
Yeah, hope I'm audible. Thank you, sir. Good afternoon. Sir, if I see your franchise segment revenue growth only 12% year-over-year grew. Why this happen?
Sorry, can you repeat the question again, please?
Why our franchise segment revenue grew only 12% year-over-year?
Which segment?
Franchise segment.
Franchisee segment.
Yeah.
Franchisee is a business wherein we do outright sale. Franchisee has not expanded in the last year. Our focus was more on the Company-Owned stores. The state outside Maharashtra expanded because more on the Company-Owned stores. That is why the franchisee business has not seen growth as similar to what we have seen in our own stores.
Okay, understood. My next question will be, this quarter, our revenue mix from LiteStyle from 5% to 6% you mentioned?
Yeah, LiteStyle business, because LiteStyle we have a format very well given LiteStyle stores, and we also have coffee shops in our big PNG stores. All in all, that business should be in the range of 5%, 6 %.
One next half of your next year targeting?
We would definitely aim to increase that business because that's the business which is the right way. It's impulse buying and it's connecting to the next generation. We'll be happy if we can reach a target of 10% with LiteStyle.
Okay. My last question is, what will be your FY 2027 store opening guidance?
FY March 2026, we should be nearing around 80 stores. I think FY 2027, we would be adding, depending on the QIP, we do it, but at a company level, we can look at around adding 25 more stores, combination of COCO, FOCO, and a combination of PNG and LiteStyle.
20 stores we can expect FY 2027?
105 stores at the end of March 2027.
Okay. Thank you. Best of luck.
Thank you. The next question is on the line of Mayo Mishra from Finvester. Please proceed.
Hello, sir. Congratulations for the excellent set of numbers. Many of my questions have been answered. I have one question. I think, sir, for FY 2026, we had targeted revenues in the range of INR 9,000 to INR 9,500 crores. I think we have already achieved INR 7,200 crores as of Q3. Do we see exceeding or touching the higher end of our revenue target of INR 9,500 crores in FY 2026? Also, sir, I need to know your outlook on the revenue numbers and EBITDA margin profile for FY 2027, given the current gold prices. How you see the volume growth panning out in FY 2027.
Long set of questions. I think FY 2026, we should be closing a little higher than the guidance we had given. Hopefully we should cross the INR 9,500 and we are close to million, INR 10 crore, is what we are projecting. The market looks good, and we are on stronger momentum, so that looks achievable. Next year, we do not know where gold prices are heading. No one can tell all of that. I think next year we should be able to have a 20% to 25% growth over this year. Around INR 12,000 crores is what we should be able to target for FY 2027.
All right, sir. Thank you. That's it from my end.
Thank you.
Thank you. Next question is on the line of [Shubham Shukla] from Finvenue. Please proceed.
Yeah. Good afternoon, sir. Am I audible?
Yes, you are. Go ahead.
Sir, I had a question on the sales growth. While comparing ourselves with the industry peers, like maybe a Titan or a Kalyan Jewellers. Overall industry growth was somewhere around 40% to 43% on the revenue front for Q3. We, PN Gadgil, being a little smaller player as compared to these two companies. Don't we think that our revenue growth could have been better as compared to on the league of a little higher than these big players? Just wanted your insight on this.
I think I can't comment on what the other players are doing. We are sticking to our guidance. We are sticking to what projections we have made. I think the store growth, the volume growth is not just coming from the existing stores, it's also new store addition. There's a lot of various factors. I think as far as we are concerned, we can talk on our company. We have projected, we are increasing that projection. I think all I can say is that we are on track to meet our guidance or to exceed our guidance.
Okay, sir. Sir, can we get figures for the volume growth for Q3, the gold jewelry volume growth?
The volume growth for Q3 would have been in the range of around 25% plus.
Volume growth 25%?
Gold.
Sir, as far as we remember that we had a guidance to increase our stud ratio going forward. Any comment on stud ratio, I mean, on further improvement or the process how we can improve it from here on?
There's an improvement. First, your current category has seen a 50% plus hike growth. Secondly, we launched Polki and Kundan categories. When you consider Diamond, precious stone, Kundan, Polki, we would be close to 10% as of December end. There's a continuing improvement on that front. The company focus would still be to take this stud ratio to 13% to 14%.
By in next two, three years?
Yeah. Really, we should look at next three, four years.
Three, four years. Okay. Okay, sir. Thank you so much.
Thank you. The next question is from the line of Priyanshu Jain from Growth at Infinity. Please proceed.
Hello. Am I audible?
Yeah, you're audible. Go ahead.
Hi, sir. Also, for the next year, you said the stores. Can you give the bifurcation as well?
Bifurcation of?
Sir, like for the LiteStyle and the other stores?
For next year, out of 25 stores we have planned, it will be a half and half. 50% will be LiteStyle, 50% should be PNG, is what the plan is. Again, in both the categories, it would be COCO and FOCO, a mix of that.
Sir, we have seen some reduction in the FOCO model, franchise or owned company operated. Are we having plans to ramp up this process as other competitors which have done in the past going forward?
Our strategy in the neighboring states of India was first to have a proof of concept and have a company store. We have done that successfully, both in U.P and in B.ihar and in M.P. Now, in the coming years, we'll be looking at accelerating franchise growth in those states. In Maharashtra, we kind of are the market leaders, and we have tapped almost all the major markets here. That is why we were not keen on adding more franchises here. In the coming years, you'll see franchises coming up in all the states where outside Maharashtra we're already present.
Sir, last two questions. Like this year, we will do somewhere INR 9,000, INR 9,500. Next year, we have any internal plans which we are targeting to implement next year?
Internal plans, as in you mean the revenue target?
Yeah.
You mean by internal plan?
Yes, sir. For the revenue as well and the EBITDA margins we are expecting or maybe sustainable going forward because we have got better margins this quarter. Like, are these 8%+ margins sustainable going forward?
If you look at the margins, EBITDA margins for the Q3 are always on higher side because of the big festive season, Diwali, which is in that quarter. On annual basis, we have projected that we will be still increasing margins, EBITDA margins, and that should be sustainable at 7%, 7% to 7.25% is what we feel. PAT margin is around 3.75% to 4% is what we feel is sustainable in the long run. In terms of the target, we should be targeting around INR 10,000 crore to INR 12,000 crore for FY 2027, as of end of March 2027. We expect that we continue growth in the focus area of central India, as we have mentioned before.
Okay, sir. That's all from my side. All the best for the future. Thank you, sir.
Thank you. The next question is from the line of Rahul from Sapphire Capital. Please proceed. Mr. Rahul.
Hello, good evening.
Yes, sir.
Actually, my question was on EBITDA margin. The 7% which you achieved this quarter, which is like a good high compared to the last few quarters. This is sustainable for coming quarters, right?
That's why I said, in Q3 the margins were much higher, the EBITDA margins for Q3. Overall, if you annualize this, 7% is what we feel is sustainable.
Right. Okay. I just couldn't hear. You said 25 stores in FY 2027, the mix was COCO and FOCO.
We don't do FOFO, it's only COCO and FOCO. Franchise and Company operated.
Correct. Okay. All right. Got it, sir. Thank you so much.
Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may press Star and One to ask a question. The next question is from the line of Raj from Finvestor. Please proceed.
Sir, we have very aggressive plans for store openings. Right now, we are having stores 67 as of today, and we are planning to have 78 to 80 stores by this financial year. How confident and what is our actual plan and what is the reasonable number to reach by FY 2027 and also, keeping the gold price rise into view, as it has increased, are we seeing any volume growth in Q4? The last question will be, how can we-
Let me take one by one. You've asked so many questions together. I'll answer your first question in terms of number of stores. We are currently at 66 stores as of December end. By March end, we already have plans. The work is going on. Stores are finalized. We are confident reaching 78 - 80 stores by end of March. 25 stores to be added next financial year. Like I mentioned before, a mix of COCO and FOCO, and PNG and LiteStyle. The LiteStyle store format are smaller store formats, 1,000 sq ft - 1,500 sq ft. A PNG is around 3,000 sq ft - 4,000 sq ft. The confidence to achieve that number for March is almost there and the work is going on so that should not be a problem as far as achieving the number is concerned.
To answer on your volume growth, as of Q3 we had seen a volume growth in gold of around 25%. I think both in value and volume there's been growth in Q3 and Q4 is going on so I can't talk on the current quarter as we speak.
Okay. Right now, sir, we are only left with 50 days in this quarter. Are we seeing, sir, any spark of volume growth in Q4?
I can't give you anything which is on the current quarter. All I can say is the momentum is strong, we should be able to meet our guidance or exceed the guidance that we have given for the year.
The last one will be, sir, on the gross margin, sir. The gross margin in this quarter, sir, as you know, this is a very good quarter, it is elevated. What could be the reasonable gross margin for the whole year and going forward to look at?
We have already mentioned that around 13% to 4% gross margin is something which should be sustainable, EBITDA 7% and PAT at 4%.
Okay. Sounds like you are doing a 4.4% PAT margin, sir, in nine months.
Yeah.
We should target below these numbers.
Q3 is always a high month, so when you stop up for medium margin maintenance, I think 4% is what we should be able to maintain, which is quite a big increase over the last two, three years.
Okay. Sir, thank you. Thank you very much, and wish you good luck for the future.
Thank you.
Thank you. Next question is on the line of Gaurav Shukla from Finvestor. Please proceed.
Good afternoon, sir. My questions have been asked. Thank you, sir.
Thank you.
I'm out, sir.
Yes, thank you.
The next question is on the line of Ankur from Inveth. Please proceed.
Thanks for the opportunity. Sir, firstly, my question is on the side of QIP. What are our plans over there?
The QIP plans are, like we have said, we have taken the approval from the board, which is in a good till end of August 2026. Having said that, we have already mentioned that the QIP will primarily be to fund our expansion ahead. We are right now looking at the geopolitical developments, the positives on the India-USA deal, the India-EU deal, are factors which are in favor. Let's see how things shape up. Then once we are able to come to a conclusion, we'll be able to communicate it better to you.
Understood, sir. Understood. My next question is, as we are speaking your guidance and how we may cross our guidance of INR 2,500 crore. Where is this growth coming from? Is this from the new stores, or is this from the existing stores?
It's a combination. If you look at SSG also, it is upward of 30%. The growth is coming both from the new stores and from the existing stores. Our e-com arm is also doing well. We are seeing sustained efforts being paid off in terms of the right merchandising, right communication, and marketing. I think we are also able to garner a lot of share from the unorganized sector, which also is adding to the growth.
Got it, sir. Got it. Understood. Lastly, any guidance on the volume growth? How much can be expected? Anything on that front?
Volume growth as of December, we are at a 25%-plus growth in gold volume. I really cannot comment anything on this quarter year because it is going on. I think, like I mentioned before, volume and value play an interchanging role. When gold prices go up, volume decline and vice versa. I think overall, we look to be in a good position to achieve our guidance.
Understood, sir. That's it from my end. Thank you so much, sir.
Okay.
Thank you. The next question is from the line of Yash from Edelweiss. Please proceed.
Yeah. Thank you, team, for the follow-up. Sir, I wanted to understand better on the LiteStyle part of the business. You already alluded a good guidance for the expansion of the same. Where are we planning, which states or cities we are planning for this expansion, and how different the customer segment is compared to PN Gadgil?
Okay. LiteStyle as a category was primarily meant, like I mentioned in the previous call also, as a bridge between the PNG customers and the customers of tomorrow. LiteStyle is very design-oriented, high fashion, high glamour jewelry, but light on the pocket and having around 35% to 40% studded in the entire merchandise. Maharashtra is still quite open for LiteStyle because we have not really expanded in Maharashtra. The focus will primarily be on Maharashtra. When you think of Maharashtra, I think in the coming year, we'll be looking at having more stores in the bigger cities of Maharashtra, like Mumbai, Pune, Nashik, Nagpur, CSN, Solapur, and these kind of places. Online also would play a very important role in LiteStyle. Having said that, LiteStyle will also be into various malls in different cities.
The year after that is when we see the LiteStyle really moving outside Maharashtra and moving into the other states where PNG is present. We feel that this is a brand which has huge potential. It is something which is in demand by today's consumer. When you ask for the product, it's very well differentiated. Designs in LiteStyle, the merchandise is completely different than of PNG. You will not find the PNG products in LiteStyle and vice versa. There is a separate design team, a separate merchandising team, a sourcing team for LiteStyle.
Got it. Thank you, sir, for the answer.
Thank you. The next question is from the line of Prashant Varma, an investor. Please proceed.
Hi, sir.
Yes, Prashant, go ahead.
Yes. I have two questions related to retail segment only. First is, retail EBITDA margin excluding other income have increased from 6%-7% in FY 2025 to 9% this year, around 8% to 9%. Similarly, PAT margin has also increased. What are the key drivers of this sharp margin expansion at this segment? Does not include bullion sales, right?
See, retail has been a focus area for us because after the disadvantage of the non-margin refinery sales business, retail has been a major contributor for the entire sales drive at PNG. Two, three factors which have helped the retail business has been that the introduction of LiteStyle, which again, is a high-margin business. Our focus again on the second category, addition of Kundan Polki in the merchandise mix, and the movement to central India in U.P., Bihar, where again, the sales of studded jewelry is on a higher rise. All these factors have been able to help us to increase our margin for the last quarter.
Okay. The second follow-up question on same retail segment only. Like you said, sustainable growth margins are 13%-14%, EBITDA around 7% and PAT around 4%. What kind of sustainable EBITDA and PAT do you think for retail segment only? Additionally, could you please share the trend prior to FY 2025 of retail EBITDA and PAT margin?
Retail EBITDA should be in the range of-- The sales should be around 8%-8.25%. At a comparable, we're talking about 7%. I think this is what we feel is sustainable. Retail will benefit from the higher focus of studded, from the higher focus of lightweight jewelry. As the merchandise also is moving more toward lighter weight, would also mean higher margins for the side of business.
PAT margins for this segment, sustainable PAT margins and the trend, if we have prior to FY 2025, sustainable margin.
Prior to FY 2025, that I'll email to you because we don't have it offline right now. If you want the previous data, we'll email that to you.
Okay, sir. Just the PAT margins for the retail segment. Sustainable PAT margins, like you said, 8% to 8.25%.
You want the future data. What are you asking for? PAT margin?
No, like you said, 8% to 8.25% sustainable EBITDA for retail segment. Similarly, what kind of PAT are sustainable for this segment?
PAT for retail segment?
Retail EBITDA. Yes.
retail, I think PAT in the range of 5.5%-5.5% should be sustainable.
Okay. Thank you so much, sir.
Thank you. The next question is from the line of Nitin Jain from Fair Value. Please proceed.
Yeah, my questions have been answered. Thank you.
Thank you.
Thank you. The next question is from the line of Rajiv Bharti from Nuvama. You may proceed.
Good afternoon, sir. My question is on other expenses. Other expenses have gone from INR 85 crore to INR 190 crore nearly on a YOY basis, right? Can you break that up? What's basically shooting this kind of surge?
Other expenses, primarily the increase has been in the advertising expenses, because the number of stores increased from 47 to 65. Expansion in U.S.A., from Madhya Pradesh, Uttar Pradesh, Bihar. Signing up of Ranbir Kapoor and Sara Tendulkar as brand ambassadors has been the primary driver. Increase in commission and brokerage from e-com also has seen an increase. As e-com sales have gone up, also the commission and brokerage also have gone up. These have primarily taken up the other expenses. Having said that, we'll still be able to stick to the 1.5% level of marketing expenses of total turnover, as we had given the guidance in the last call.
Sure. The other question is on the segmental growth. E-com has grown by nearly 140%, right? My understanding is this is basically coin sale, and this is ideally a margin dilutive bit, right? Potentially both on the gross margin and EBITDA margin side, which is basically growing faster than the company. Can you explain that bit, why it has not hit the margin? Other part is when you said 25% volume growth, this you're talking about putting all channels put together, right? If I just strike out the 25% from the 36% number, ballpark we'll get something like 10% growth on the pricing. The pricing is materially, I mean, significantly more higher, right? What am I missing here?
See, e-com, like I mentioned before, the e-com sales driver is bullion, which has been also the case where investment demand has gone up also on the physical side. E-com is not a margin dilutive. It's a net margin business for us. E-com, even the bullion business, you know, a margin of around 1.52% on the bullion. That's something which again, is a margin business, but the volume, the growth has been quite large there. We also have been able to grow on the jewelry side. Though the numbers would be small compared to bullion, but jewelry sales, gold jewelry, diamond jewelry, and silver jewelry all have shown good significant increase in e-com. E-com also is a tool for omni channel, where people browse online but buy offline. That's again, an area which is a focus for us.
When you talk on the margin on the volume bit, 25% when you talk on the entire increase. That's over the last quarter, talking quarter-over-quarter. To answer your question, you have gold. This one last quarter versus this quarter. It's a Q over Q. We have grown 25% in volume over last quarter.
Can you tell us what is the YOY volume increase?
YOY volume increase would, I think, be a single digit or maybe flat.
Okay. You think there's still growth? Because I thought the price itself is, I think upwards of 50% growth, right? Even if you adjust for mix, there should be a volume decline.
We also added a number of stores. Like I said, from 47 to 66 stores, we also added more number of stores.
No, I agree. What I'm saying, the overall growth is 36%.
Everybody, the whole industry has had seen volume de-growth. What is the industry focusing on? Are the margins being able to maintain? The margin also comes from making charges. As long as your making charge income is intact, the margins would not be affected.
Okay. Fair point. That's all from my side. Thanks a lot.
Thank you. Before we take the next question, we would like to remind participants that you may press star and one to ask a question. The next question is on the line of Nitin Jain from Fair Value. Please proceed.
Yeah, thank you for the opportunity. You have given a guidance of around 20 to 25 store openings for next year, which is a very strong guidance, your revenue growth guidance is around 20%. Can you please elaborate? Are you seeing any slowdown in the market, or what could be the reason?
Okay. When you say 25 stores, I'm talking of the PNG store and the LiteStyle store. The LiteStyle stores are smaller compared to PNG. A PNG store typically would have an inventory of around 55, 60 crores. A LiteStyle should be in the range of around 10 crores. When you try to look at the entire number, 25 stores would only mean around 12 to 13 or 14 PNG stores and a balance LiteStyle stores. That is why on a gross level, the revenue increase would be at least 20%.
Okay. That's clear. Thank you so much.
Thank you. The next question is on the line of Aman, an investor. Please proceed.
Thank you for the opportunity. My first question is regarding the QIBs. Could you please share the timeline and how the fund are going to be used?
Like I mentioned before, we have not yet freeze on any timeline for the QIB. The resolution is effective till August of 2026. We are still working on that, and once we can confirm, we'll be able to communicate with you.
Okay. My next is some doubts regarding the LiteStyle stores. When we compare with your peers like Kalyan and Tanishq, first they expanded their core store 10 years before the LiteStyle really format. Where we see in the PNG is still at very early age, and they are feels like bit aggressive towards the LiteStyle because you are allotting 50% of its total stores for next year to LiteStyle. When we compare, the sales coming from the LiteStyle is around 10%. Do you think that it's still worth?
Okay, I tell you, this is a very seriously planned and discussed on the map with the management. On one side, we're looking at higher gold prices. Other side, we're looking at a lot of new generation customers who want jewelry not on an occasion, but for their own occasion. We have always mentioned that PNG, the demand driver is primarily festive and wedding, while LiteStyle will be more towards own occasions, personal, birthdays, anniversaries, gifting. This is a new trend which is emerging, and we want to be a part of this trend. When you talk on expansion, we have done expansion which is not over-aggressive. The stores of PNG would be completely funded from its internal accruals, and that's why we have given this guidance wherein we said that 25 stores, half would be PNG, and out of that half would be franchisee.
Whatever growth from PNG, it will be all through internal accruals. We would not need any further debt to expand and to fulfill this growth. It's a well-thought strategy, and it's something which the company is confident about.
Okay. Thank you, sir.
Thank you. The next question is on the line of Neel Mehta from Casson Exponential. Please proceed.
Hi. Thanks for the opportunity. I just wanted to ask, like you are planning to expand in other states and cities. Are we seeing any dip in revenue per square foot or anything like that? If you could throw some light.
Yeah, as I explained new cities, definitely the breakeven would take around 18 to 24 months. The revenue per established stores would always be higher than the newer stores. Considering the update we gave right now of around INR 3.5 lakhs for nine months revenue. This includes the company, old stores, new stores, everything put together. I think it's still one of the best numbers in the industry, and we are hopeful that we'll be able to continue with this trend.
Okay. Yeah, that's it from my side. Thank you.
Thank you. The next question is on the line of Raj from Finvestor. Please proceed.
Thank you for taking my follow-up question. You are having a current ratio of 8.4%, whereas our peers are having in double digits and some of the peers are in high teens. What is our plan to consolidate or just take advantage of having a greater
That's a good question. Primarily, we are only in the state of Maharashtra, which primarily is a gold market. If you look at all the South-based players and Western India-based players, gold rules the route. For the last seven, eight years, the focus has been to increase the current ratio, which has now come to almost 10% when you take Kundan totally into account also. As we move towards central and North India, which are typically more studded and diamond market, this will see a natural increase also, and our focus for the company, we will take it further. I think we would also aim to be able to reach the margins on the numbers as other players have once we are able to go PAN India.
Having said that, in the next three, four years, we are aiming to take the ratio to 13%, 14%.
That's great. Thank you very much. You're welcome, myself.
Thank you. The next question is on the line of Shubham Shukla from Finvenue . Please record.
Thank you so much. Sir, I just wanted to reconsider the fact that our shareholding is still above the 75% benchmark. Any plan for equity dilution in the upcoming year?
As far as I have stated, we have still not finalized the QIB plans nor the plan for any promoter stake sale. As and when something is finalized, we will get back to you on that. Yes, as per the SEBI regulations, in the three years, we have to get down the shareholding to 75% of the promoter route.
Yes, got it. Okay.
Thank you. The next question is on the line of Dinesh Kulkarni from Finsight. Please proceed.
Hello, sir. Am I audible?
Sure.
Okay. Thanks for taking my question, sir. Really great set of numbers. My question is pretty simple. Have you seen any trend over the last six months, over the last two quarters, where the customer's preference is more for the gold bars or solid form rather than the jewelry? Just because there is such a surge in prices that people just want to hold gold rather than in the jewelry form.
See, definitely there's a shift in investment demand which is further getting taxed, and we're seeing a lot of newer players in the market looking at investing in gold, both physical or in the online format. That is definitely there, but as far as wedding festivity demand is concerned, jewelry is the only option there. People are cutting old gold for new jewelry. That trend has increased, and today almost 40% entire purchases are financed by old gold from people's households. Jewelry sales are there. Jewelry sales will continue. Weddings festivities are days, and jewelry sales are big. Investment demand as of now has seen an increase. You could have seen a ratio which would have been 15%, 18% bullion and the balance of jewelry. Today, it could be in the range of 25%, 25% bullion and the balance jewelry.
Jewelry in India is different. It's sentiment, it's part of festivities, part of our culture, and I think that will still remain the same.
Yeah. I understand. Perfect. Sir, just on a similar line, do we have any different operating margins for when, say, like as you mentioned, the percentage of ratio is increasing towards the bar side. Are we expecting any change in margins because of that, assuming the gold prices remain very high and the demand for the solid form is higher than the jewelry form?
I think I don't see bullion sales will further increase than what is current ratio there. I think it's quite a high number. If two-third of the business today is still jewelry, I think margins should not be impacted. I think even if prices go higher, margins should not have a negative impact.
Okay. At least we should be able to sustain those margins, right?
That's right.
Okay, sir, last question from my end. How are we looking at the CapEx, sir? Maybe the CapEx for store or the overall term for the next two, three years as we are expanding into different geographies.
CapEx for us being is only around INR 2 crores, in terms of the store fit-out, and around INR 70 lakhs for the LiteStyle store. The franchisee stores, the CapEx is borne by the franchisee. That is not a cost for the company. Inventory-wise, like I mentioned before, we carry around INR 55 crores of inventory, gold, diamond, silver put together for our company stores, and for LiteStyle should be in the range of around INR 8-10 crores.
Okay. We are not expecting any margin, major change in these numbers going forward, right?
I think prices call the number, as a percentage it will not change. Inventory is going to the store. The inventory is currently more.
Okay.
That will not take any further changes.
Okay. That sounds great, sir. Thank you very much and all the best.
Thank you. Due to time constraint, that was the last question. I now hand the conference over to Saurabh Gadgil for the closing comments. Over to you, sir.
Thank you, everyone. We truly appreciate all the participants for taking the time out to join this call and for your insightful questions. We hope we were able to address them to your satisfaction. If you have any further queries or would like to know more about the company, please feel free to reach out to our secretary team and to our investor relations partner, XB4 Advisory. Wishing you all a great day ahead. Thank you.
Thank you. On behalf of Nuvama Wealth Management, I thank you for this conference. Thank you for joining us, and you may now disconnect your lines.