PNGS Gargi FJ — Q4 FY25 earnings call

Call held 11 Jun 2025

Management summary

PNGS Gargi FJ reported a strong FY25, exceeding its ₹100 crore turnover target with 147% YoY growth in turnover and significant PAT and EBITDA margin expansion. The company's B2C segment demonstrated robust growth, outpacing industry averages. For FY26, the focus is on aggressive store expansion, digital initiatives, and increased marketing spend, which is expected to impact short-term margins but drive future growth.

Highlights

  • Company turnover grew from ₹51.5 crores to ₹126.35 crores in FY '25, posting strong growth of 147% Y-o-Y.

  • PAT also grown from ₹8.46 crores to ₹28.8 crores in FY '25.

  • EBITDA margin, excluding other income, grew by 22% to 30% due to better product mix and operating leverages.

  • B2C revenue has grown from ₹28.67 crores to ₹82.49 crores over 3 years, a CAGR of 69.7%.

  • Achieved the ₹100 crores magic figure of turnover in FY25.

Concerns

  • Lower margins were shown in Q4 due to significant marketing spend of around ₹2 crores in that single quarter.

  • Increased marketing cost of ₹7 crores in FY26 (up from ₹4 crores in FY25) will definitely impact bottom-line margins.

Key financials

  1. Turnover ₹126.35 Cr +147%YoY
  2. PAT ₹28.8 Cr +240.4%YoY
  3. EBITDA Margin 30%
  4. B2C Revenue ₹82.44 Cr +62%YoY

What they filed

Q1 FY27: revenue up 10.7%, net profit down 4.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue23 36 23 27 46 +102%46 +27%30 +30%30 +11%
EBITDA7 12 5 6 13 +87%13 +15%7 +47%6 −6%
Net profit5 9 4 5 10 +102%11 +16%5 +25%5 −5%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Capital allocation

medium confidence
  • Liquidity Liquidity disclosed The cash balance on the balance sheet is from earlier preferential issue and accumulated profits, and a fundraise of ₹10-15 crores is planned for marketing costs.
    Yes, that cash balance is there on the balance sheet. It is out of the earlier preferential issue and the accumulated profits over a period. That cash is lying on the balance sheet. That will be mainly for the creating inventory for the forthcoming our expansions and all these things. This fund raise will be exclusively for the marketing cost purpose.

Guidance & targets

Store Expansion

  • New stores to open Store Expansion · FY26 · High confidence not less than 12 stores
    I can commit you, it will be not less than 12 stores.

    — Amit Modak

  • New stores to open in H1 Store Expansion · H1 FY26 · High confidence minimum six to seven stores
    And in this first half, that is H1, we are going to add minimum six to seven stores.

    — Amit Modak

Marketing Spend

  • Marketing cost Marketing Spend · FY26 · High confidence ₹7 crores

    Previously ₹4 crores → ₹7 crores

    So yes, this year, we are likely to spend around INR7 crores on marketing cost because as it is, we are expanding around not less than 12 stores and those are mainly outside the Maharashtra State, it means minimum out of 12, five to six stores will be out of Maharashtra. As compared to INR4 crores, we spent in FY '25, it will be INR7 crores...

    — Amit Modak

  • Marketing cost as % of top line Marketing Spend · current year · Medium confidence 10-12%

    Previously 7-8% → 10-12%

    So I see that my marketing cost in relation to top line should not exceed 7% to 8% of the top line. That's why I said in the current year, I will spend abnormally over and above that 7% to 8% lock, it may be 10% to 12%.

    — Amit Modak

Online Sales

  • Online sales as % of total sales Online Sales · minimum 2.5 years · High confidence 10%

    From 4.5% today

    It will be an exercise of minimum 2.5 years. Because my supplying also will keep on growing. So in percentage term if I want to achieve that 10%, it will take time.

    — Amit Modak

Profitability

  • PAT Profitability · FY26 · High confidence higher than FY '25 PAT
    Yes, I can say, you will see the same thing on the paper.

    — Amit Modak

  • Gross Margin Profitability · current year · Medium confidence maintain or improve
    Minimum, it will maintain, but I am thinking that it will improve, because of the scale of operation.

    — Amit Modak

Channel Mix

  • Dependency on PNGSL Channel Mix · next 3 years · High confidence 60% level

    From 75-78% today

    And in next 3 years' time, we want to achieve it at least to the 60% level on PNGSL and 40% level on our own.

    — Amit Modak

Corporate Action

  • Main board migration Corporate Action · after December '25 · High confidence prepare to ship from SME to main board
    We are completing 3 years in December '25, and we'll start prepare there on to ship from this SME platform to main board platform.

    — Amit Modak

Fundraise

  • Fundraise amount Fundraise · before August 31st · High confidence ₹10-15 crores
    The issue price is also not decided yet. But entire process, I'm expecting to complete before 31st August.

    — Amit Modak

Product Launch

  • New product category Product Launch · this year · Medium confidence 9-carat less than 2 grams weight
    We are trying for 9-carat less than 2 grams weight.

    — Amit Modak

What to watch in Q1 FY26

H1 FY26 Store Additions

next quarter
Current 0 stores added in H1 FY26 as of call date
Target minimum six to seven stores added in H1 FY26

Why it matters

Verifying the pace of store expansion, especially outside Maharashtra, is crucial for assessing growth strategy execution.

And in this first half, that is H1, we are going to add minimum six to seven stores. And out of that four or -- sorry, four no, minimum five will be out of state, means outside the Maharashtra.

Risks & concerns

  • Impact of increased marketing spend on bottom-line margins

    medium

    Increased marketing cost of ₹7 crores in FY26 (vs ₹4 crores in FY25) will definitely impact bottom-line margins, though higher top-line growth is expected to absorb it.

    Management acknowledged

  • Difficulty in measuring marketing ROI

    low

    Management stated that calculating ROI for marketing is very difficult and they rely on estimation rather than precise measurement.

    Management acknowledged

  • Seasonally weak Q4 margins due to marketing spend

    low

    Lower margins were shown in Q4 due to significant marketing spend of around ₹2 crores in that single quarter.

    Management acknowledged

  • Impact of silver price increase on gross margins

    low

    Silver cost increase during Q4 impacted gross margins as labels were priced at earlier rates while subsequent purchases were at higher prices.

    Management acknowledged

Q&A highlights

7 direct, 1 evasive
Store additions in H1 FY26 and overall FY26 Direct
As I said, it will be not less than 12. I'm thinking of 15, but it will not less than 12 in the full year. And in this first half, that is H1, we are going to add minimum six to seven stores. And out of that four or -- sorry, four no, minimum five will be out of state, means outside the Maharashtra.

Provides specific numerical guidance on the pace and geographical focus of store expansion for the upcoming fiscal year.

Asked by Rajesh Singla

FY26 PAT growth expectation Direct
See, giving answer in a precise figure manner, it is very difficult, but whatever you are expecting that it should be higher in the top line as well as on the PAT level basis. Yes, I can say, you will see the same thing on the paper.

Management confirms that FY26 PAT is expected to be higher than FY25, providing a positive outlook on profitability.

Asked by Rajesh Singla

Reason for Q4 gross margin reduction Direct
In Q4, I said the human resource cost has gone up, that marketing cost we born in Q2 is INR2 crores out of INR3.75 crores in a full year. Marketing costs never gives you an immediate return. On the same quarter, I cannot expect something fantastic sale out of that. No. During that period that silver cost has gone up.

Explains the factors contributing to margin compression in the last quarter, including increased marketing and HR costs, and rising silver prices.

Asked by Bibhor

Product acceptance and store performance outside Maharashtra Direct
But yes, I can tell you that these stores are doing sales, some sale every day and some customers every day. And I am confident that all these stores will do well. And our USP is always there. We never closed down any of our stores.

Addresses concerns about market acceptance in new geographies, indicating positive initial sales and confidence in the brand's viability.

Asked by Sharad

Online sales target timeline Direct
No, it will be an exercise of minimum 2.5 years. Because my supplying also will keep on growing. So in percentage term if I want to achieve that 10%, it will take time.

Clarifies the realistic timeline for achieving the 10% online sales target, managing investor expectations.

Asked by Kartik Bhat

Reduction in dependency on PNGSL (master franchisee) Direct
No, we are trying to minimize it or reduce it. And in next 3 years' time, we want to achieve it at least to the 60% level on PNGSL and 40% level on our own.

Reveals a strategic shift to reduce reliance on the master franchisee, indicating a move towards greater direct control over sales channels.

Asked by Nikhil

Main board migration plans Direct
Yes, we are complaint in every respect. We have got more than sufficient paid-up capital, which is prescribed by the requirement. We have got networth. Everything is there. Only thing it got postponed by 1 year, because the rules were changed from 2 years to 3 years. We are completing 3 years in December '25, and we'll start prepare there on to ship from this SME platform to main board platform.

Provides a clear timeline and rationale for the company's planned migration to the main board, a significant event for broader investor access.

Asked by Kiran

Measuring ROI on marketing spend Evasive
I don't calculate ROI for the marketing, because calculating ROI on marketing is like counting the birds in the sky. No one can tell you what ROI will be there on the marketing. Once I spend, it is going to be a spend amount. It cannot get recurred. And how much sale will derive from that marketing, it's only estimation. There is nothing beyond that.

Highlights management's difficulty in quantifying the direct return on marketing investments, which could be a concern for investors seeking clear performance metrics.

Asked by Ashish Soni

2 min read 5 chapters

Detailed narrative

FY25 Financial Performance Overview

PNGS Gargi FJ delivered a robust performance in FY25, surpassing its ₹100 crore turnover target. The company's turnover grew significantly from ₹51.5 crores to ₹126.35 crores, marking a 147% year-on-year increase. Profit After Tax (PAT) also saw substantial growth, rising from ₹8.46 crores to ₹28.8 crores. Furthermore, the EBITDA margin, excluding other income, expanded from 22% to 30%, driven by a favorable product mix and operating leverages. The B2C revenue alone grew by 62% year-on-year to ₹82.44 crores, demonstrating a 3-year CAGR of 69.7%, significantly outpacing the industry average growth of 20-25%.

FY26 Growth Initiatives and Store Expansion

For FY26, PNGS Gargi FJ is focusing on five key initiatives to accelerate growth. The company plans to establish a broader footprint by opening 10 to 15 new stores across India, with a commitment to at least 12 stores, and a minimum of six to seven stores in H1 FY26, with at least five of these outside Maharashtra. New digital channels are being explored, including a partnership with Blinkit for quick commerce, focusing on products under ₹1,000, and the launch of dedicated iOS and Play Store applications to facilitate easier purchasing. The goal is to increase online sales from the current 4.5% to 10% of total sales within the next 2.5 years.

Marketing Strategy and Spend

The company intends to significantly increase its marketing expenditure in FY26, projecting to spend around ₹7 crores, up from ₹4 crores in FY25. This increased investment is primarily aimed at creating brand awareness, especially in new markets outside Maharashtra. Management acknowledges that this higher marketing spend will impact bottom-line margins in the short term, particularly as marketing costs do not yield immediate returns. However, they anticipate that the projected higher top-line growth will eventually absorb these costs, maintaining overall profitability.

Channel Mix and PNGSL Dependency Reduction

PNGS Gargi FJ is strategically working to reduce its reliance on PNGSL, its master franchisee, for sales. Currently, 75-78% of sales are through PNGSL channels, but the company aims to bring this down to 60% over the next three years, increasing its own brand store sales and online presence. This shift is part of a broader strategy to gain more direct control over its sales channels and enhance transparency, moving away from a model heavily dependent on a single channel.

Main Board Migration Plans

The company has confirmed its intention to migrate from the SME platform to the main board. This process will commence after PNGS Gargi FJ completes three years on the SME platform in December 2025. Management assured that the company is compliant with all requirements, including sufficient paid-up capital and net worth, to facilitate this transition. This move is expected to enhance liquidity and accessibility for a broader base of investors.

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