Detailed Narrative
Q2 FY26 Performance Overview
Ashapuri Gold reported a strong Q2 FY26 with total income growing 18% year-on-year to INR102 crores. Sales quantity increased by 20% year-on-year, driven by healthy demand across key retail chains. Profitability saw significant improvement, with EBITDA doubling to INR11.47 crores, leading to a 540 basis points margin expansion to 11%. Profit after tax (PAT) surged 145% year-on-year to INR8.47 crores, reflecting a 428 basis points increase in PAT margin.
Volume Growth and Product Strategy
The company achieved a 20% year-on-year volume growth in Q2 FY26, and maintains a 20% volume growth target for FY26, aiming for 528 kgs from 440 kgs last year. Management clarified that while peers might show higher volume growth, Ashapuri Gold focuses on premium, antique, and design-led products, including diamond and polki collections, which have longer production cycles but yield higher margins. This strategic differentiation allows for better profitability despite potentially lower volume compared to mass-market players.
Margin Expansion Drivers
The substantial improvement in EBITDA margin to 11% was attributed to several factors. These include higher volumes, a strategic shift towards better product mix with premium jewelry collections (diamond and polki), and design-led innovation. Additionally, favorable gold prices during the quarter contributed to the margin expansion. The company aims to maintain stable margins with a gradual upward bias, supported by manufacturing efficiency and increased orders from national chains.
Order Book and Capacity
Ashapuri Gold booked INR102 crores of fresh domestic orders at IIJS 2025 and secured an additional INR5.41 crores for its premium Aneya collection. The company is currently in talks with two national chains for further orders and is preparing for the January IIJS signature new exhibition, expecting order book growth in Q3 and Q4. Current manufacturing capacity stands at 750 kgs per year, which can be expanded to 1 ton within 40-60 days if needed, supported by recently acquired land and a new floor added this year.
Market Trends and Design Focus
The company observes trends towards lighter weight and lower caratage (18 carat, 14 carat) jewelry due to rising gold prices. Ashapuri Gold is focusing on capsule collections in these segments and emphasizes design-led innovation. The Aneya collection, a new launch, is showing good response, particularly from national chains. The company is also exploring region-specific collections across India, with strong demand from North and South, and growing interest from the West, indicating a culturally diverse design strategy.
Guidance and Outlook
For FY26, the company targets a 20% volume growth, translating to 528 kgs. The initial revenue growth guidance of 45-50% was revised to 20-25% due to a 40-50% rise in gold prices over the last six months. For FY27, the company anticipates volume growth of 30-35%. Management is focused on maintaining stable margins with an upward bias through product mix, branded segments, and manufacturing efficiency. The company also highlighted its 100% hedging strategy against gold price volatility.