Khazanchi Jewell

Khazanchi Jewellers delivered exceptional financial results in Q3 FY25, with total income surging by 89.65% year-on-year to INR 393.89 crores. This robust growth translated into a 56.73% increase in EBITDA, reaching INR 16.48 crores, and a significant 113.37% rise in Profit After Tax (PAT) to INR 12.38 crores. The company's Earnings Per Share (EPS) also saw a substantial jump of 113.68% to INR 5, underscoring its solid financial position and growth momentum. For the nine months of FY25, total income grew 87.41% to INR 1,150.42 crores, with PAT increasing 50.69% to INR 32.43 crores.

The company is poised for a significant retail expansion with the launch of its flagship 10,000 square feet showroom in Sowcarpet, Chennai, by April 2025. This new showroom is expected to contribute an additional INR 150 crores to B2C sales and elevate the B2C segment's share from 10% to 15-18%. Complementing this, Khazanchi Jewellers has launched a Gold Savings Scheme App, a key step in its digital transformation, designed to enhance customer convenience and engagement by allowing customers to buy gold daily based on prices, mitigating the impact of price fluctuations.

The Indian jewellery sector is projected for robust growth, supported by a favorable macroeconomic environment and key measures in the Union Budget FY25, including a reduction in gold import duty. While steep increases in gold prices, such as the 10-11% rise in January, may lead to a short-term slowdown in demand, management anticipates a recovery as the market digests the new price levels. Historically, gold prices have compounded at 13-15% per annum, and the company expects this trend to continue, further reinforcing its long-term growth outlook.

Khazanchi Jewellers boasts a diverse product portfolio with over 25 categories and an extensive library of more than 5 lakh designs. The company continuously enhances its offerings by adding new artisans and adopting the latest designing techniques to improve its design library. There is a strategic focus on lightweight jewellery to meet customer preferences for affordability, and also an expansion into premium segments like diamond, Kundan, and Jadau jewellery, which offer higher margins and cater to evolving consumer trends.

The company currently holds long-term borrowings of approximately INR 40 crores. For its upcoming flagship showroom and future expansions, management has confirmed that funding will be entirely through internal accruals, with no plans to increase existing debt. This approach aims to maintain a healthy balance sheet while supporting strategic growth initiatives. The new flagship showroom is a 10,000 square feet facility, with an extendable area of around 6,000 square feet, indicating significant internal investment.

Currently, Khazanchi Jewellers operates with a 90% B2B and 10% retail (B2C) business mix. Following the opening of the flagship showroom, the company anticipates the B2C segment's contribution to increase to somewhere around 15% to 18% of total business. The B2C segment is expected to yield higher margins, projected between 9% and 11%, which will positively impact the company's overall profitability and bottom line. The company is also introducing various higher-end products in the B2C segment to further enhance margins.