Ashapuri Gold

Ashapuri Gold Ornament Ltd. reported a strong Q3 FY26 with PAT growing by 7.76% year-on-year and EBITDA by 22.01% year-on-year. This led to an EBITDA margin expansion of 233 basis points to 8.78% and a PAT margin improvement of 103 basis points to 6.11%. However, total income for the 9 months FY26 increased by a modest 5.64% year-on-year, and Q3 FY26 saw a 29% quarter-on-quarter volume degrowth.

The company acknowledged that significant gold price volatility, including a 40-50% increase, severely impacted demand and volume growth in Q3 FY26, leading to flat 9-month volume performance against an initial 20% target. This volatility caused consumers to hold purchases and retailers to delay new orders, resulting in a 52% capacity utilization rate despite readiness for 750 kgs. Management noted that demand has started to return with recent price stabilization.

In response to the gold price hike and its impact on affordability, Ashapuri Gold has strategically focused on 18-carat and lightweight jewelry. Through R&D, they successfully developed 18-carat handmade jewelry, achieving the same look and feel as traditional 22-carat pieces but at lower weights (e.g., 60 grams instead of 80 grams). This initiative has already secured orders from national corporate chains, positioning the company ahead of market shifts.

The company has expanded its manufacturing capacity, with the setup now ready for 750 kgs, up from 500 kgs last year. While the current utilization stands at 52% due to demand slowdown, management expects utilization to improve in the next one or two quarters as market conditions normalize. No specific capital expenditure figures were provided for this expansion.

Ashapuri Gold is deepening its engagement with organized jewelry retailers, particularly national chains, which are increasingly contributing to overall sales. The company has hired a dedicated sales team for corporate national chains and has successfully onboarded new chains, with agreements finalized and orders commencing. They also noted a strategic push towards the high-margin Diamond Polki segment.

Looking ahead, the company plans to expand its presence in the domestic market and drive sustainable revenue growth. A key strategic initiative involves focusing on design IP, with plans to start filing patents for unique components, shapes, and manufacturing techniques from August 2026. Management expressed optimism for Q4 FY26, anticipating a return to normal order cycles and demand following gold price stabilization.

The company confirmed that it applied for main board listing on the National Stock Exchange (NSE) approximately one to one and a half months prior to the call. The application is currently undergoing NSE's scrutiny, and the typical process for such a listing takes 2-3 months.