This article first appeared on GuruFocus .
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Consolidated Revenue:INR 2,013 crore for Q1 FY27, a 78% year-on-year growth, translating to an annualized run rate of approximately INR 8,050 crore.
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FY27 Revenue Guidance:INR 8,100 crore, with the annualized Q1 run rate already close to this target.
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Consolidated Gross Margin:9.3% in Q1 FY27, up 27 basis points from 9.1% in Q4 FY26.
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EBITDA:INR 157 crore, with a margin of 7.8% for the quarter.
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Operating Cash Flow:Turned positive at approximately INR 30 crore in Q1 FY27, compared to negative operating cash flow until the end of FY26.
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Advanced Gold Contribution:Achieved 17% of sales on the advanced gold model, ahead of the 15% expectation for FY27, contributing 90-100 basis points to gross margin.
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Non-22KT Jewellery Share:Increased from 10.5% to 14% of volume in Q1 FY27, contributing 1.4-1.5% to gross margin.
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Studded Jewellery Share:Increased from 1.65% in Q4 FY26 to 2.1% in Q1 FY27, contributing approximately 0.3% to gross margins.
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22KT Gross Margin:Approximately 6-6.5%, with 70% of products being CZ studded and 30% plain gold jewelry at a 5.5% gross margin.
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Natural Diamonds Contribution:Approximately 2% of overall business, with plans to increase this share.
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International Order Pipeline:Prospective order pipeline of approximately INR 50-45 crore from the UK and European markets following the Asia, UK, India Jolie Expo in London.
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Net Working Capital Cycle:Approximately 60 days at the close of the quarter.
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Release Date: August 10, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Consolidated revenue for Q1 FY27 grew 78% year-on-year to INR 2,013 crore, with an annualized run rate of approximately INR 8,050 crore, close to the FY27 guidance of INR 8,100 crore.
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Gross margin improved to 9.3% in Q1 FY27 from 9.1% in Q4 FY26, driven by a higher share of non-22KT jewellery (up to 14%) and studded jewellery (up to 2.1%).
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Operating cash flow turned positive at approximately INR 30 crore in Q1 FY27, a key milestone, with net working capital days stable at around 60 days.
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The company generated a prospective order pipeline of INR 40-45 crore from the UK and European markets after participating in the IJL Expo in London, supporting export diversification.
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Management reiterated its commitment to a zero-salary promoter compensation model starting FY27, linking promoter rewards to dividends and aligning with shareholder interests.
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The appointment of a new CEO, Akash Kalnesha, with over two decades of industry experience, is expected to drive growth in advanced gold and studded jewellery segments.
Negative Points
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The company's revenue guidance of INR 8,100 crore for FY27 was not revised despite the strong Q1 performance, with management indicating a possible revision only after Diwali.
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Working capital days remained at 60 days, slightly above the previous quarter's 59 days, due to increased investment in higher-margin studded jewellery and export business.
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The company experienced a cyber fraud incident in July 2026 involving INR 10.7 crore, with only INR 3.5 crore recovered so far, potentially impacting Q2 financials.
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Gross debt increased to INR 542 crore at the end of Q1 FY27, reflecting higher working capital needs for studded jewellery and export operations.
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The share of advanced gold business declined to 17% in Q1 FY27 from 20% in Q4 FY26, though management clarified this was due to overall volume growth, not a reduction in absolute terms.
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The company's capacity utilization remains at approximately 60%, indicating significant idle capacity that may pressure margins if not fully utilized.
Q & A Highlights
Q: Given the strong Q1 performance, which puts the company on an annualized run rate close to its FY27 revenue guidance of INR 8,100 crore, is there a plan to revise the guidance upward? A: Mangesh Chauhan, Managing Director, stated that the company will analyze one more quarter and provide a revised guidance after Diwali. He added that the revenue guidance will only be upgraded if the company secures a greater share of the studded jewelry business relative to the advanced gold business.
Q: Can you provide a detailed breakdown of the 9.3% gross margin achieved in Q1 FY27? A: Siddharth Sipani, CFO, provided a detailed breakdown: Advanced Gold contributes 90-100 basis points (bps) to the gross margin. Non-22KT products (18KT, 14KT, 9KT), which now make up 14% of volume, contribute approximately 1.4-1.5%. Natural and lab-grown studded jewelry, at 2% of revenues, contributes around 0.3%. The remaining 22KT business has a gross margin of 6-6.5%, with 70% being CZ studded and 30% plain gold. Management emphasized this improvement is structural, not a one-off.
Q: What is the company's strategy regarding working capital, given that days increased slightly to 60 days from 59 days in Q4 FY26? A: Mangesh Chauhan explained that the slight increase is a deliberate strategic choice. The company is deploying cash flows generated from the gold business into the higher-margin studded jewelry business, which requires slightly more working capital. The company is balancing growth, profitability, and positive operating cash flow, with a long-term target of reducing net working capital days to 52 days by 2030.
Q: What is the potential of the UK and European markets, and what is the initial traction? A: Mangesh Chauhan stated that the company has just entered the market and received an initial order of 25-30 kg. The response at the expo was encouraging, with a prospective order pipeline of INR 40-45 crore. The company expects 3-4% of sales to come from the European market, which is more focused on studded and lab-grown diamond products.
Q: What specific priorities have been set for the newly appointed CEO, Mr. Akash Kalnesha? A: Mangesh Chauhan outlined targets for the new CEO: increasing the advanced gold business from the current 17% to 20% next year, 25% in the third year, and 30% by 2030. He is also tasked with diversifying the export business and growing the UK market contribution to 3-5%, with a focus on lab-grown and natural diamond studded jewelry.
Q: Can you provide a revenue or volume growth guidance for FY28, given the strong Q1 performance? A: Siddharth Sipani stated that the company's strategy is to balance sales, profitability, and positive operating cash flow. With a current ROCE of around 36%, the company expects sales growth of 30-35%. Management plans to provide a more specific estimate for FY27 and FY28 after September, but reiterated its target of a 5% PAT margin and a 20% operating cash flow to PAT conversion.
Q: What is the current capacity utilization, and what is the CapEx plan for future expansion? A: Mangesh Chauhan stated that current capacity utilization is approximately 60% (with a capacity of 1.2 tons per day), which is sufficient until 2028. For future expansion, the company will continue its asset-light model, taking facilities on lease. The CapEx for expansion is estimated at INR 80-100 crore, which would be only 12-15% of the PAT expected in FY28, and the facility can be set up in 120 days.
Q: How is the company managing the entry-level price points for consumers, given the rising gold prices? A: Mangesh Chauhan explained that the company's key competitive advantage is its design and merchandising expertise. They use the largest 3D printers in their facility to innovate and manage inventory weight and ticket sizes. The focus is on maintaining the same look and design flow while adjusting grammage and carat (e.g., moving to 18KT, 14KT) to keep products affordable for end consumers.
Q: What is the company's long-term PAT margin guidance, and is there potential for it to improve? A: Mangesh Chauhan confirmed that the long-term guidance remains at 5.25% PAT margin. While the company is working on improving gross margins through a better product mix (diamonds, lab-grown, advanced gold), the guidance remains conservative at 8.5-9% gross margin. The company aims to reach a "magical number" of INR 1,000 crore in PAT, and any improvements will be communicated proactively.
Q: How is the ramp-up progressing with new clients like P N Gadgil and CaratLane, and what is the customer acquisition strategy? A: Mangesh Chauhan stated that the new CEO successfully onboarded all large customers that were not in the client list, achieving this in 15-18 months versus the anticipated 24-36 months. The strategy has now shifted from customer acquisition to increasing wallet share through cross-selling and upselling, particularly in the studded jewelry segment. The company is also seeing strong growth from new-age "Zanzi" brands like CaratLane, Kenra, and Zeeva.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
