I don’t think you can expect a gold price increase proportionately reflected in the top line. Jewelers revenue is essentially making charges cut.
But this margin is not fixed at all rates. It depends on customer elasticity with some margin. Keeping this aside, the jewelry sector is doing pretty well with the unorganized to organized story panning out. PNG had 25% SSG growth. Very few retailers are able to have 25% SSG growth outside of the jewelry space. Coupled with new expansion, the growth reaches 40+ %.
Got a question. The gold leasing rates have increased and hence the margins of jewellers are likely to be hit in this quarter. Is this one off thing or this marks a permanent shift ? What would normalize the situation? Can someone elaborate here?
From the customer’s perspective, does anyone know if PNG buys back its own gold that they have sold to its customers? If yes, do they cut commissions and how much. If no, then why don’t they if they believe in their products purity. Opinions pls.
Am I the only one who is unable to understand the update? When the retail business which comprises of 80%, grew 50% and E-commerce did well too, then how come 5% growth?
Last quarter as well there was something similar Rev grew by 24%, however, all the segmental revenue be it retail, ecomm or franchise grew by more than 40%.?
5% growth is on last year’s quarter. Need to check the bullion sales which might have gone to 0 in this qtr. But yes management can improve the reporting in this regard.
Retail ( including e comm and franchisee ) and bullion sales mix was appx 65:35 last year , now with retail growth of 50 pc + my estimate is retail : bullion sales mix is 98: 2 : My sense is EBITDA margin should improve by 200-300 bps YOY to around 7- 7.5 pc due to increase in retail mix and higher stud ratio and PAT margin around 4 -4.25 pc ; Overall PAT may be around 65-70 cr vs 55 last year , This quarter PAT will be impacted by higher hedging cost due to higher interest on GML , had this not be there PAT could have been 75-80 cr .
This is more of a sector-level observation than a company-specific one. With gold prices consistently hitting new highs, it’s reasonable to expect that retail consumers might defer or reduce their purchases of gold and silver jewellery. This, in turn, could negatively impact the topline of jewellery companies for the previous and current quarters.
Given this context, can we conclude that the jewellery segment may not be in a favorable position in the current market, and it might be prudent to wait for further correction? Or is there any flaw or imbalance in this line of reasoning?
Additionally, is there a scenario where rising gold prices could actually benefit jewellery companies—perhaps through hedging mechanisms or inventory gains—similar to how oil marketing companies (OMCs) hedge to manage crude price volatility?
Disc - not invested in any such stocks but keeping an eye on them
Company recorded its highest-ever single-day festive sales of ₹139.53 crore on Akshaya Tritiya 2025, marking a 35% YoY growth over last year’s ₹103.26 crore.
a. Gold revenue grew 34%, with volume up 1.46% to 122 kg
b. Diamond sales rose 23% (volume ↑ 31%)
c. Silver sales surged 114% (volume ↑ 90%)
Despite a ~31% rise in gold prices, the company sustained higher overall volumes, showing strong consumer demand.
It seems the management clearly doesn’t have a command over the numbers. In today’s concall, I found following to be odd:
Unawareness on gross margin shrinkage in Q4- Evident that ex of bullion sales that they said was 300 cr in Q4 last year, they clocked ~13% GM (157.7/1212 cr) vs Q4FY25 is ~12% (190.8/1588cr). CFO seems to be unaware clearly
Lack of transparency with the bullion sales discontinuation. If this was the case, no disclosure were made in earlier calls. Even in the November concall- they said objective is to reduce the refinery component whereas in Q4 Investor Presentation, the comment is they completely discontinued refinery as on 1st Oct 2024. Really appalled with this one
Mangement kept on saying next year is like to like when Q1 and Q2 would again have B2B component. I hope they make relevant disclosures on bullion in coming two quarters
Not sure what to trust and believe here. Although I like the kind of growth they are delivering on retail front, but all such non-disclosures make me as an investor feel lowballed.
Agree with you Raghav , their CFO needs to better prepared ; I don’t think there is any trust issue , I think they need to strengthen their IR team also
Q4 FY 24 gross margin suddenly shot up to around 13/14 pc from 8/9 pc in Q3 ( excluding bullion sales ) , I am sure there were one offs here , most likely it was inventory gains which helped margins last year
If I recall correctly, they told that bullion was 700 Cr in FY25 Vs 1200 Cr in FY24. However, not clear on bullion breakup of Q1 and Q2 FY24.
Column 1
Column 2
Column 3
Column 4
Q4 FY24
Q4 FY25
Revenue - Ex other income
1510
1574
Bullion sales
300
0
Comparable revenue
1210
1574
Gross profit - Ex other income
155
175
Inventory gains (18 Cr for whole FY24, lets assume 9 Cr in Q4 FY24)
9
0
Comparable gross profit
146
175
Gross margin
12.1% (146/ 1210)
11.1% (175/ 1574)
So their gross margin has shrunk, as far as I understand. This shouldn’t be the case with stud ratio increasing. Probably, their making charges have gone down in this high gold rate environment. What else could be the reason?
However, management needs to be better with numbers and reporting.
At least, they should provide quarterly bullion sales for the past.
After listening to the call, I think there’s another additional information we have.
~18cr of margin contributed by inventory gains in Q4FY24
After adjusting this, and consider only the margin contribution of retail, franchise, e commerce - the Q4FY24 gross margin would come to be 10.57%. (Over which there is a slight improvement in Q4FY25).
Basically PNG are good businessman. May be they have to improve in corporate management and presentation for which they are new. But customer pull and retention they are very good.
Had experience few years back.was on visit to Pune so went to one of their showroom with family just to see the designs. Family liked one design but was not carrying that much cash and was to return UAE next day. So I said we shall buy may be next trip. Owner asked if I have cheque. I was reluctant. But owner said he has no problem in accepting cheque. I asked for phone number just in case anything goes wrong I can contact them. But they refused and said they trust us. They said they have never lost money in such cases and know whom to trust.
This incident in memory, I have invested in this company. Whether I shall make money or not don’t know. But one thing I can trust the management.
Does anybody or anybody’s friend has any connect with management ? This will help us to further strengthen our primary research
If we exclude 487 cr of bullion sale from Q4 FY 24 , Gross Margin has dropped from 15.3 to 12.1 pc
There might be increase in hedging cost this quarter and inventory gains last quarter , which may be the reason for drop in margin , but we need to know exact numbers , then only we would feel confident ; Moreover if I remember correctly , billion had 1-1.5 pc gross margin
Last year inventory gain was there as they had not hedged much. This year hedging cost. That may be the reason for margin compression as compared to last year. However, I am not sure what is the actual impact.
