Khazanchi Jewell — Q3 FY26 earnings call

Call held 18 Feb 2026

Management summary

Khazanchi Jewellers reported a strong Q3 FY26, characterized by robust revenue growth, significant margin expansion, and disciplined execution. The company highlighted the successful launch of its new flagship showroom in Chennai, which generated INR 20 crores in sales within its first 10 days, and its strategic focus on expanding retail contribution and higher-value diamond jewellery.

Highlights

  • Q3 FY26 Total Revenue grew 49.6% YoY to INR 589.26 crores, driven by sustained festival movement and improved product mix.

  • Q3 FY26 EBITDA grew 114.51% YoY to INR 35.34 crores, with margins expanding 181 bps to 6%, reflecting efficient cost structure and strong product mix.

  • Q3 FY26 PAT grew 103.02% YoY to INR 25.13 crores, with margins expanding 112 bps to 4.26%.

  • New 10,000 sq ft flagship showroom in Chennai recorded sales of approximately INR 20 crores in its first 10 days, significantly strengthening retail footprint.

  • Expansion into the natural diamond category under 'Vajraa by Khazanchi' continues to gain momentum, supporting profitability and brand premiumization.

Key financials

2 periods

Q3 FY26

  • Total Revenue
    ₹589.26 Cr
    YoY +49.6%
  • EBITDA
    ₹35.34 Cr
    YoY +114.5%
  • EBITDA Margin
    6%
  • PAT
    ₹25.13 Cr
    YoY +103%
  • PAT Margin
    4.3%
  • EPS
    ₹10.12
    YoY +102.4%

9M FY26

  • Total Revenue
    ₹1,542.02 Cr
    YoY +34%
  • EBITDA
    ₹89.12 Cr
    YoY +96.9%
  • EBITDA Margin
    5.8%
  • PAT
    ₹63.82 Cr
    YoY +96.9%
  • PAT Margin
    4.1%
  • EPS
    ₹25.76
    YoY +96.6%

What they filed

Q1 FY27: revenue up 45.0%, net profit up 86.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue375 394 622 404 549 +46%589 +49%508 −18%586 +45%
EBITDA15 16 19 21 32 +113%35 +119%37 +95%39 +86%
Net profit11 12 13 15 24 +118%25 +108%26 +100%28 +87%
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.

Segment breakdown

  • B2B Segment
    90% Revenue Contribution (last year)6% EBITDA Margin
  • B2C Segment
    10% Revenue Contribution (last year)10% Retail Margins

Capital allocation

high confidence
  • Capex Capex disclosed
    • New 10,000 sq ft flagship showroom ₹12 Cr
    The capex for the coming showroom was around INR12 crores.
  • Debt Debt disclosed
    Now as per the current requirements, all the fulfillment of working capital requirement has been filled by the internal segment.

Guidance & targets

Retail Contribution

  • Retail contribution to total revenue Retail Contribution · Next 2-3 years · High confidence 25%

    Previously 10% → 25%

    Over the next 2, 3 years, we aim to increase our retail contribution from 10% to 25%.

    — Rajesh Mehta

Overall Growth

  • Company growth rate Overall Growth · Going forward · Medium confidence 30%
    we are defining that we are going to grow at a pace of 30% in all verticals.

    — Rajesh Mehta

EBITDA Margin

  • EBITDA Margin improvement EBITDA Margin · Going forward · High confidence 20-30% higher than current

    From 6% today

    So since the EBITDA margin is at 6% now currently, so it is expected to improve somewhere higher 20% to 30% from here.

    — Rajesh Mehta

PAT Margin

  • PAT Margin improvement PAT Margin · Going forward · High confidence 25-30% better than current

    From 4.1% today

    we are going to achieve our PAT margin somewhere around 25% to 30% better than here.

    — Rajesh Mehta

New Showroom Revenue

  • Annual revenue from new flagship showroom New Showroom Revenue · Annually · High confidence INR 500 crores
    we are expecting from this showroom is somewhere around INR500 crores for the retail division.

    — Rajesh Mehta

New Showroom Payback

  • Payback period for new showroom capex New Showroom Payback · Within 1.5 years · High confidence 1.5 years
    Yes. capex part, it can be covered in 1.5 years.

    — Rajesh Mehta

Marketing Expense

  • Marketing expense as percentage of total revenue Marketing Expense · Current year · High confidence 0.75% to 1%
    Sir, out of the total revenue for this current year, we are planning somewhere around 0.75% to 1%.

    — Rajesh Mehta

Store Expansion

  • Number of new stores Store Expansion · Upcoming year · Low confidence a few more
    the management is planning to open a few more stores in upcoming year.

    — Rajesh Mehta

What to watch in Q4 FY26

Retail contribution to total revenue

Next quarter (impact of new showroom) and over next 2-3 years
Current ~10% (last year)
Target Progress towards 25%

Why it matters

This is a key strategic pillar for margin expansion and overall growth, with the new flagship showroom expected to significantly boost retail share.

Over the next 2, 3 years, we aim to increase our retail contribution from 10% to 25%.

Risks & concerns

  • Gold price volatility

    medium

    Management states they use a refilling strategy and hedging to manage volatility, ensuring margins remain intact.

    Analyst acknowledged

  • Competition from organized/unorganized players

    low

    Management sees a shift from unorganized to organized due to quality and resale value, focusing on design differentiation to compete effectively.

    Analyst acknowledged

  • Inventory risk in premium and diamond categories

    low

    Management states they procure as per requirement and focus on higher quality diamonds, minimizing inventory risk.

    Analyst downplayed

  • Sustainability of low making charges (e.g., 3% flat, 1% chains)

    low

    Management clarifies these are for specific machine-made designs or investment-focused items, not core designer jewellery, and customers are willing to pay for design.

    Analyst acknowledged

  • Credit risk in wholesale segment

    low

    The company operates with a cash-and-carry business model and an average credit cycle of only two weeks, effectively mitigating credit risk.

    Analyst acknowledged

Q&A highlights

8 direct
Order visibility for Q4 and early FY27 Direct
The overall segment of gem and jewellery looks good only as the prices are increasing. There is a slowdown for a shorter period of time. But overall, the prospective is very good. The whole industry is going to grow at the pace of 30%, 35%, I believe.

Provides management's outlook on near-term demand and industry growth prospects.

Asked by Vinod Shah

Working capital cycle Direct
That's what, current working capital is that's what our stock rolling cycle is somewhere around 50 days.

Highlights a key operational efficiency metric for the company.

Asked by Vinod Shah

Competition from organized and unorganized players Direct
No, that is an improvement into the whole gem and jewellery segment now when there is a shifting of business from unorganized sector to organized sector as a quality prospective and resale value prospective, all the consumers are believing to buy a right product at the right price. So it all depends upon the design. And gradually, things are improving. And based on designs, the margins are also improving.

Explains management's view on the competitive landscape and how the company differentiates itself.

Asked by Vinod Shah

Impact of gold price correction on demand Direct
Yes, in the near-term scenario, we do not see that there is a huge correction of 50% is anywhere possible. But even then when there is a correction, the volumes are gradually very high. And this has been happening in a very long period of time. Whenever we say a steep correction in the prices, the demand goes up. Sometimes it has even reached dual. So the demand will surely improve if the prices come down.

Addresses a key macro factor for the jewellery industry and its potential impact on sales volume.

Asked by Anil Parekh

Q3 FY26 revenue growth: volume vs realization Direct
That's what we have grown on the volume base. If you take up, we have grown around 7% to 10% in between. But overall, the margins have been improved so much because we are working on the various verticals. On the various verticals so some other verticals where the margins are less, we have reduced our margins, we have reduced our volumes there. And on other verticals where our margins are high, we have improved on that. That has improved our EBITDA margins and PAT margins.

Clarifies the drivers of strong Q3 revenue growth and margin expansion, indicating a strategic shift in product mix.

Asked by Vidhi Purohit

Capex for new flagship showroom and ROI/payback Direct
The capex for the coming showroom was around INR12 crores. And for the total revenue, what you have defined, that's what, we are expecting from this showroom is somewhere around INR500 crores for the retail division... Yes. capex part, it can be covered in 1.5 years.

Provides specific investment details and expected returns for a major strategic initiative.

Asked by Priya Jain

Safeguards for credit risk in wholesale segment Direct
Primarily, we do not have any style of credit strategy. We do not give much credit to the client. Our portfolio type of business is primarily focused on designs and cash and carry business. Our average credit cycle is only 2 weeks. So we do not find any threat on receiving that.

Addresses a potential risk in the B2B segment and highlights the company's conservative credit policy.

Asked by Sakshi Shinde

Capacity utilization and scaling without significant capex Direct
The company does not own any their own manufacturing unit. On a future date, they have a plan of having their own unit. And since we have been working with various factories pan-India, so we do not find any difficulty. As and when required by what type of product is required in much demand, we manufacture that way.

Explains the company's asset-light manufacturing model and flexibility for scaling production.

Asked by Sakshi Shinde

2 min read 5 chapters

Detailed narrative

Strong Q3 & 9M FY26 Performance Driven by Retail and Product Mix

Khazanchi Jewellers reported robust financial results for Q3 FY26, with total revenue growing 49.6% year-on-year to INR 589.26 crores. This strong performance was accompanied by significant margin expansion, as EBITDA increased by 114.51% to INR 35.34 crores, pushing EBITDA margins to 6% (up 181 basis points). PAT also saw a substantial rise of 103.02% to INR 25.13 crores, with PAT margins at 4.26%. For the first nine months of FY26, revenue grew 34.04% to INR 1,542.02 crores, with EBITDA up 96.91% to INR 89.12 crores and PAT up 96.92% to INR 63.82 crores.

Flagship Showroom Inauguration and Retail Expansion Strategy

The company successfully inaugurated its new 10,000 square feet large format showroom in Chennai on February 7, 2026. This strategic addition proved immediately successful, recording sales of approximately INR 20 crores within its first 10 days of opening. Management expects this showroom alone to generate around INR 500 crores in annual revenue for the retail division, with a payback period for the INR 12 crores capex estimated at 1.5 years. This move is central to the company's vision to increase retail contribution from 10% to 25% of total revenue over the next 2-3 years.

Product Mix Optimization and Margin Enhancement

The strong margin expansion in Q3 FY26 was attributed to an improved product mix and disciplined execution. Management indicated a strategic shift towards higher-margin verticals, reducing volumes in lower-margin segments while improving focus on higher-margin ones. The company's expansion into the natural diamond category under its premium brand, 'Vajraa by Khazanchi', is gaining momentum and is expected to meaningfully support profitability and brand premiumization. Retail segment margins are targeted at 10-12%, significantly higher than the B2B segment's 6% EBITDA margins.

Asset-Light Manufacturing and Credit Risk Management

Khazanchi Jewellers operates an asset-light model, not owning its manufacturing units but collaborating with various factories across India. This approach provides flexibility in design and production without significant capital expenditure. In the wholesale segment, the company maintains a conservative credit policy, focusing on cash-and-carry business with an average credit cycle of only two weeks, effectively mitigating credit risk.

Outlook and Growth Drivers

Management expressed confidence in sustaining growth momentum, guiding for an overall company growth rate of 30% on a 'constrained basis' going forward, with the industry expected to grow at 30-35%. They anticipate EBITDA margins to improve by 20-30% from the current 6%, and PAT margins to improve by 25-30% from the current 4.1%, driven by the increasing retail contribution and focus on higher-margin products. The company also plans to open 'a few more stores' in the upcoming year to further expand its retail footprint.

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