Many of these store might start yielding results in FY26
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margin lower due to reduction in gross margin from 43 pc to 39 pc and ebitda margin down from
31 pc to 21 pc. need to understand what led to 4 pc reduction in gross margin , is it due change in product mix towards more of silver jewellery vs diamond studded 14C gold jewellery ?
Further drop of 7 pc from gross margin to ebitda margin is explained by investment in opening new exclusive stores .
They have exceeded their new store opening guidance ; they had guided to reach 12 new excl stores by mar but they are at 14 , similarly SIS also they had guided to reach 35 by March but they are at 50
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Does anyone understands the complete Gadgil Family tree and relation between PNG & Sons and PNG Jewellers?
My current understanding is that PN Gadgil & Company started in 19th century (1858) from Sangli and time after time business was divided between different family members. In 2012, When PN Gadgil & Company was divided between PNG Jewellers (Blue colour logo & Stores, Currently run by Saurabh Gadgil) and PNG & Sons (Red colour logo & Stores, Currently run by Govind Gadgil & Amit/Aditya Modak)
PNG & Sons is actually the promotor of promotor of Gargi by PNGS.
Please correct, if i am wrong.
Also PNG Jwellers are opening a new brand called “Lifestyle by PNG” , will this be a competitor to Gargi?
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Both are completely different propositions.
Gargi (wardrobe jewellery) is targeted towards younger working women / early jobbers; with the typical ticket size being around ₹500 to 2500
Lifestyle is a gold jewellery collection; ticket size varying from ₹7000 to 3 lakh
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I see many SKUs on Gargi website which are upwards of 10k. Do we have any indicated sales contribution by price point? (From any historical con-call)
If PNG Jewelers compete with Tanishq, does this mean Lifestyle by PNG will compete with Caratlane?
Given the market opportunity and synergies, the possibility of PNG Jewelers to launch their fashion Jewelry range remains open?
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Gargi concall notes for q4 fy 25 :
Fy 25:
- 3.75 crores spent in Marketing , q4 it was 2. Cr.
- B2c sales 82 crores , 62% growth yoy.
- Added 9 stores in H2 fy25.
Fy 26 :
Key initiatives ,
- 12-15 stores will be opened . 50% stores outside Maharastra.
- Blinkit will give visibility for less than 1000/- price range from Utsav.
- Gargi will be launching app on both playstore and iOS together, mostly to avoid giving out huge cut to online platforms .
- 2 Franchise stores in North East will be opened in h1.
- This year marketing cost will be higher at around 7 cr. Will impact bottomline this year due to this in terms of margin but absolute numbers will show growth..
Goal of 10% from online sales in 2-3 years right now its 4% .
Backend( factory) ready to handle 75 stores, right now stores count is 45.
B2c Top-line same growth can be expected.
Potential for another 20 standalone stores in Maharastra where Pn Gadgil son’s stores are not there.
H1 fy 26 6-7 stores to be opened , 5 will be outside Maharastra.
Industry growth is at 25%, Company can beat market.
Last year new stores and current year h1 new stores growth can be seen in Fy26.
On B2c topline of 84 crores of fy25 , we can see growth on topline excluding B2b revenues. Q1 will be better than q1 of fy25 for b2c revenue, need to exclude b2b of last year.
Q4 margin dropped due to marketing cost and Human Resources. Sliver cost had gone up which impacted gross margins, this can happen for 1 quarter once every 2-3 yrs.
Earlier 85% sales used to happen in pngs parent stores now its at 77%
Shopper stop is at 6% , online is 4% will hit 10% in 2-3 years .
Working capital cycle and gross margin : Parent still absorbs the most of the cost where stores are inside the parent stores. Margins are similar at all sales channels.
Stock turn at 4x.
New store setup :
Fitment cost around 25 Lakh, inventory 400 sq feet inventory 30 Lakh for silver jewellery and 50 Lakh for diamonds at label price not cost basis. Not looking at investors/vc types for expansion, need franchise partners who can setup and execute day to day business.
Fund Raise :
Cash lying will be used for inventory build up. Before august 31s 15 cr will be raised as preferential by promoter for marketing costs.
Currently we have 80 stores including shopper stop.
Diamond studded jewellery was 45% for fy25.
Q3 and q4 are strong sales quarters due to seasonality.
Main board :
Once 3 years are completed in December 2025 will apply for moving to main board.
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Promoters buying shares worth Rs 15 Cr in the company around current price (considering SEBI ICDR regulations pricing formula) is a huge vote of confidence.
As per my calculations, 10 days VWAP is 905.64 and 90 days VWAP is 979.15. So if relevant date is today, then promoters has to pay min Rs 979.15 per share for preference shares. So company is delaying the relevant date declaration so that high stock price days of Mar 2025 would get removed from past 90 days calculations
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Update - Company is going to hold board meeting on 4th July to consider and approve issuance of equity shares on preferential basis. Expect issue price to be around 945
Since they are launching 14K and 18K gold jewellery, it will be priced much higher than Gargi’s fashion jewellery which is mainly silver.
I think PNG Jewellers do not want to cannibalize their current sales of 22K and 24K gold jewellery and hence they are trying to differentiate it with a separate brand for lower carat and relatively lower priced gold jewellery.
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PNG Jewellers is different entity which seperated from P.N.Gadgil & Sons (parent entity of PNGS Gargi). Look at both their logos.
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Issue price of Rs 970 per share, which is at 8% premium to today’s closing price. Promoter buying 90,000 shares and 2 other investors are buying 15,500 shares. Promoters buying above market price is always good sign for investors.
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I tried to find a listed global player in affordable fashion jewelry to get an idea of future roadmap of Gargi. I could find Pandora- A Denmark company with it’s growth story from a single shop in 1989 to 5000 shops in 100 countries.
Link for the same is produced here. It’s generated with help of AI.
Gargi’s Potential Trajectory & Key Inflection Points
Gargi is currently in a “golden window”—a period of extremely high growth coupled with high profitability, fueled by its unique and intelligent incubation strategy. The true test lies ahead.
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The Scaling Challenge: The central question for Gargi’s future is whether it can successfully translate its proven model from a controlled environment of 30+ parent stores into a national footprint of hundreds of SIS counters, franchise outlets, and standalone stores. This leap in scale is non-trivial and will test every aspect of its operations, from supply chain to human resources.
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The FOCO Model Risk: The planned franchise (FOCO) model is the key to achieving rapid, asset-light national scale.1 However, franchising is notoriously difficult to execute well. It introduces significant risks of brand dilution, inconsistent customer service, and complex franchisee relationship management. The management’s ability to implement a robust and standardized franchise system will be a major inflection point for the company.
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Building a Durable Competitive Moat: Gargi’s current competitive moat is the trust inherited from P. N. Gadgil & Sons. As the company expands into new geographies and channels where the parent brand is less known, this moat will naturally weaken. To thrive long-term, Gargi must use its current momentum to build a new, durable moat based on the strength of the Gargi brand itself, its unique design language, and a superior customer experience. This is essential to defend its position against the onslaught of well-funded and digitally savvy competitors like GIVA, BlueStone, and CaratLane.1
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The Margin Question: The most critical financial metric to watch will be the trajectory of Gargi’s operating margin. As the company scales, its SG&A expenses will inevitably rise as a percentage of sales due to increased marketing spend, investments in a larger corporate team, and higher supply chain and logistics costs. Its ability to manage this margin compression and maintain strong profitability while growing the top line will be the ultimate indicator of its long-term business viability.
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Update from 2025 AR:
- Current Store Count : 97 in total , 33 franchise stores with PNGS , 50 SIS , 14 EBO.
- Opening up of SIS in REVA stores in FOCO model. Since REVA already has 33 running stores, this should fuel up the stores growth for Gargi.
Reg REVA :
As of March 31, 2025, the company had 33 shop-in-shop outlets spread across 25 cities in Maharashtra, Gujarat, and Karnataka. These stores operate on a FOCO (franchise owned, company operated) and FOFO (franchise owned, franchise operated) model, covering a total retail space of 599.15 running feet.
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Does this mean REVA would be subsidiary of Gargi?
No…they will be a separate listed entity owned by the same promoters.
The advantage for Gargi is that they will get space in Reva stores in SIS model.
Regards,
Raj
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