Company Overview
Incorporated in 1996 and headquartered in Chennai, Tamil Nadu, the Company primarily serves the B2B segment, which accounts for approximately 90% of its sales, while gradually expanding its footprint in the B2C segment, currently contributing around 10% of revenues.
Migration from SME to Mainboard:
The Company was listed on the BSE SME exchange in August 2023 and is eligible for migration to the mainboard in the next year. As of June 13, 2025, the Company has a market capitalization of INR 1,368 crore and trades at a price-to-earnings (PE) ratio of 30.4x.
Transparency and Reporting
Despite being an SME-listed entity, the Company demonstrates strong governance by publishing quarterly financial results, underscoring its commitment to transparency.
Financial Performance
The Company has delivered robust growth across key financial metrics:
Growth Rates: FY25 vs FY24 | FY24 vs FY23
Revenue: 116% | 71%
EBITDA: 57% | 163%
PAT: 65% | 260%
Management has provided guidance for a minimum revenue growth rate of 25% year-on-year over the next 3 to 5 years, accompanied by margin expansion.
Key Growth Catalysts for Re-rating and Market Capitalization Expansion
- Flagship Store Launch: The Company plans to open a 10,000 sq.ft. flagship store in Chennai, expected to contribute approximately INR 150 crore to topline. Management anticipates B2C operating margins of 9%-10%, significantly higher than the 4%-5% margins in the B2B segment, which should drive overall margin improvement. The store opening has been delayed due to civil approval processes and is now expected to be operational by Q2 FY26.
- In-House Manufacturing: The Company aims to bring 20% of its production in-house over the next year, which is expected to further enhance margins through better cost control and operational efficiencies.
Operational Efficiency and Working Capital Management
- Inventory Price Hedging: The Company employs a day-to-day inventory price hedging mechanism based on a refilling system, purchasing gold immediately upon sale to mitigate price volatility risks.
- Working Capital Cycle Improvement:
Net Working Capital (NWC) days improved to 56 in FY25 from 99 in FY24.
Inventory days reduced to 53 in FY25 from 89 in FY24.
Receivables days decreased to 4 in FY25 from 10 in FY24.
Payables remain stable at approximately 1 day in both years.
(Days computed as a proportion of annual revenues)
Operational Strengths
- Diverse product portfolio with over 25 categories and a design library exceeding 500,000 designs.
- Collaborations with independent artisans and local contract manufacturers.
- Holds BIS Hallmark certification ensuring purity standards.
- Certified for bullion transactions on the India International Bullion Exchange (IIBX).
Industry Outlook
The jewellery sector is projected to grow at a CAGR of 16% from FY24E to FY28E. Organized players are expected to outperform, supported by factors such as mandatory hallmarking and reductions in gold import duties. Additionally, discretionary demand is anticipated to strengthen due to RBI rate cuts and revised tax slabs.
Key Monitoring Parameters
- Timely commissioning of the flagship showroom by Q2 FY26.
- Growth trajectory in both retail and wholesale sales, noting that FY25 sales growth was driven by a higher bullion mix which carries lower margins.
- Margin expansion driven by an increasing share of retail sales.
Interesting thematic report on Jewellery sector:
https://x.com/MCapital_In/status/1900833406658974115