Khazanchi Jewell — Q4 FY26 earnings call

Call held 8 Jun 2026

Management summary

Khazanchi Jewellers delivered a strong financial performance in FY26, marked by significant growth in revenue and profitability, driven by improved operating efficiency and strategic execution. The company successfully expanded its retail presence with a new flagship showroom in Chennai and is focusing on higher-margin segments. Management expressed confidence in achieving a 25-30% growth trajectory and a 35% PAT margin for FY27, despite potential short-term impacts from government advisories on gold purchases, which they believe will not affect long-term demand.

Highlights

  • Total income for FY26 increased by 15.71% year-on-year to INR 2,051.02 crores.

  • EBITDA for FY26 grew by 95.69% to INR 126.99 crores, with EBITDA margin improving by 253 basis points to 6.19%.

  • Profit after tax (PAT) for FY26 surged by 98.87% to INR 89.42 crores, and PAT margin improved by 182 basis points to 4.36%.

  • The company successfully launched and scaled its large-format flagship showroom in Chennai, enhancing brand visibility and capturing higher-margin opportunities.

  • Management is confident in sustaining a 25-30% growth trajectory and targeting a 35% PAT margin for FY27, driven by strategic shifts to higher-margin segments and retail expansion.

Concerns

  • PM Modi's request to stop gold purchases for a year could lead to a short-term reduction in discretionary purchases, though management believes the long-term impact will be minimal.

  • Inventory days have increased due to additional stock for the newly opened retail store, impacting the inventory turnover cycle temporarily.

Key financials

2 periods

H2 FY26

  • Total Income
    ₹1,098.26 Cr
    YoY +8.1%
  • EBITDA
    ₹73.21 Cr
    YoY +102.8%
  • EBITDA Margin
    6.7%
  • PAT
    ₹50.72 Cr
    YoY +103.6%
  • PAT Margin
    4.6%
  • EPS
    ₹20.46
    YoY +103.2%

FY26

  • Total Income
    ₹2,051.02 Cr
    YoY +15.7%
  • EBITDA
    ₹126.99 Cr
    YoY +95.7%
  • EBITDA Margin
    6.2%
  • PAT
    ₹89.42 Cr
    YoY +98.9%
  • PAT Margin
    4.4%
  • EPS
    ₹36.1
    YoY +98.6%

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.

Guidance & targets

Revenue

  • Overall Growth Trajectory Revenue · long-term, FY27, next 5 years · High confidence 25% to 30%
    With a strong foundation, improving brand positioning and a clear strategic road map, we are confident in sustaining our 25% to 30% growth trajectory and creating long-term value for all our stakeholders.

    — Rajesh Mehta

Retail Contribution

  • Share of Retail Presentation in Total Sales Retail Contribution · upcoming 2 financial years · High confidence 25%

    From 10% today

    So in the upcoming years, we are targeting a growth of at least 25% to 30%. And in that, we are going to improve the overall share of our retail presentation that we are going to planning to improve it from 10% to 25%.

    — Rajesh Mehta

Profitability

  • PAT Margin Profitability · FY27 · High confidence 35%
    And since we have come up with our new retail store where our which is going to add an additional boost to our bottom line, so our margins are going to be higher. So our PAT would be improved. So in that case, we are confident of achieving 35%.

    — Rajesh Mehta

Retail Sales

  • New Flagship Showroom Revenue Retail Sales · near future · High confidence INR 450 crores to INR 500 crores
    That's what, with the new store, we are we have defined targets of around INR450 crores to INR500 crores in the near future.

    — Rajesh Mehta

What to watch in Q1 FY27

Retail segment contribution to total sales

upcoming 2 financial years
Current ~10%
Target Progress towards 25%

Why it matters

Increasing the retail mix is a key strategic initiative for margin improvement and overall growth, and progress towards the 25% target will be a critical indicator.

So in the upcoming years, we are targeting a growth of at least 25% to 30%. And in that, we are going to improve the overall share of our retail presentation that we are going to planning to improve it from 10% to 25%.

Risks & concerns

  • Impact of government advisories on gold purchases

    medium

    PM Modi's request to stop gold purchases for a year could lead to a short-term reduction in discretionary demand, but management believes the long-term demand for gold in India remains strong due to cultural significance and potential for household gold circulation.

    Both downplayed

  • Competition in the South Indian jewelry market

    low

    Despite the competitive nature of the South Indian jewelry market, management is confident that their unique designs, in-house manufacturing, and deep market understanding create a distinct market for their products, allowing them to maintain better margins.

    Analyst acknowledged but confident

Q&A highlights

8 direct
Sustainability of EBITDA margins with gold prices and shift to higher-margin segments. Direct
Yes, that's what we have shifted from a lower margin segments to higher-margin segment, and we have come up with all the designer jewelries, and we have improved our share of higher-margin items in the overall top line. So our margins have improved, and we are improving on that on a constrained and sustainable basis. So in near future also, the margins will surely improve. The bottom line, it will surely improve.

Clarifies the strategic rationale behind margin expansion and management's confidence in its sustainability through product mix and design focus.

Asked by Vinod Shah

Impact of increasing retail contribution to 25% on overall margins. Direct
That's what on the longer run, when we are we have already defined that in upcoming 2 financial years, we would be reaching at least 25% of the total sale as a retail contribution. In that, we have surely a higher margin bracket that is somewhere around 10% to 12%. So it is going to add up an additional bottom line improvement.

Provides a clear, quantified target for the retail mix and details its expected positive impact on the company's bottom line.

Asked by Vinod Shah

Competitive advantage in the highly competitive jewelry industry. Direct
That's what, as you know, our company has been operating as having a long legacy of more than 5 decades. And we have been producing our own design. It has been widely accepted and it has been on the longer run, we have been creators of the, what you say, latest design with the market requirement. And we have been expertise in that for a very long time.

Highlights the company's long-standing heritage, in-house design capabilities, and deep market understanding as key differentiators against competitors.

Asked by Mayur Parekh

Impact of PM Modi's request to avoid gold purchases on business and margins. Direct
Yes. There is a statement given by our Prime Minister Modiji, which has he has requested people to stop buying of gold. But that is that would be a short-term impact... On a longer run, it is going to get as usual. And since there is a huge quantity of household gold already, so if a certain percentage of gold also comes into circulation, then there would be no impact because in India, no occasion is without gold.

Addresses a significant external factor, with management downplaying the long-term impact by emphasizing the cultural importance of gold in India and the potential for household gold to enter circulation.

Asked by Raj Shah

Inventory management and impact of gold price fluctuations. Direct
As we have an already, what they say, inventory management and pricing policies and all, and we have a very vast experience of managing all those. So it may not have much impact because everywhere when it is -- whatever we sell, we buy it back and we have an inventory management system. So whatever the price corrections happen, it is not going to impact our margins or our business.

Reassures investors about the company's robust inventory management and pricing policies designed to protect margins and business from gold price volatility.

Asked by Raj Shah

Projected sales for the new flagship showroom in the near future. Direct
That's what, with the new store, we are we have defined targets of around INR450 crores to INR500 crores in the near future.

Provides specific revenue targets for the newly opened flagship store, indicating its significant expected contribution to future sales and B2C growth.

Asked by R.S. Aggarwal

Plans for additional large-format showrooms and targeted geographies. Direct
Yes, we do have. Since we have started up with our flagship showroom in the upcoming years, we do have plans of expanding into a retail store, not of the same size of what we have done. We also are a smaller size. And since we have a strong presence, our presence in South India in Tamil Nadu. So initially, we are going to expand in surrounding Tamil Nadu and later on, we will be planning to expand pan-India.

Outlines the company's strategic retail expansion roadmap, prioritizing regional strength in South India before a broader national rollout.

Asked by Sakshi Shinde

Guidance for FY27, particularly PAT margin. Direct
And since we have come up with our new retail store where our which is going to add an additional boost to our bottom line, so our margins are going to be higher. So our PAT would be improved. So in that case, we are confident of achieving 35%.

Provides a specific and ambitious PAT margin target for the upcoming fiscal year, signaling strong confidence in enhanced profitability.

Asked by Sakshi Shinde

3 min read 6 chapters

Detailed narrative

Robust Financial Performance in FY26 and H2 FY26

Khazanchi Jewellers reported a landmark FY26 with total income increasing by 15.71% year-on-year to INR 2,051.02 crores. EBITDA saw a significant jump of 95.69% to INR 126.99 crores, with the EBITDA margin improving by 253 basis points to 6.19%. Profit after tax (PAT) grew by 98.87% to INR 89.42 crores, and PAT margin expanded by 182 basis points to 4.36%. The second half of FY26 also showed strong performance, with total income at INR 1,098.26 crores (up 8.1% YoY) and EBITDA at INR 73.21 crores (up 102.79% YoY), reflecting improved realization and a better product mix.

Strategic Shift Towards Higher-Margin Segments and Premiumization

The company is strategically shifting its focus from lower-margin segments to higher-margin designer jewelry, which is expected to drive sustained margin improvement. This includes an increased share of higher-margin items in the overall top line and a strong emphasis on premiumization, particularly through its diamond jewelry brand, Vajraa Diamonds. Management highlighted that this shift, combined with their asset-light manufacturing model and in-house design capabilities, is a key driver of their competitive advantage and profitability.

Significant Retail Expansion with Flagship Showroom Launch

FY26 marked a pivotal step in the B2C segment with the successful launch and scaling of a large-format flagship showroom in Chennai, covering 10,000 square feet with a sales area of 6,800 square feet. This expansion is designed to enhance brand visibility, capture higher-margin opportunities, and improve overall realization. Management projects this new store to generate INR 450-500 crores in revenue in the near future and plans further retail expansion initially in surrounding Tamil Nadu, followed by a pan-India presence.

Resilience of Gold Demand Despite Government Advisories

Management addressed concerns regarding PM Modi's request to curb gold purchases, acknowledging a potential short-term impact of 1-2 months on discretionary purchases. However, they expressed strong confidence in the long-term demand for gold in India, citing its deep cultural embedding in traditions, weddings, and festivals, and its role as a financial safety net. They also noted that government initiatives like gold monetization and recycling could mobilize idle household gold, reducing import dependence and ensuring a sustainable domestic supply chain.

Optimized Inventory Management and Working Capital Efficiency

Khazanchi Jewellers maintains an overall working capital cycle of 52 days, with an inventory cycle of 70-75 days. While the recent opening of the new retail store led to a temporary increase in inventory days, management assured that the inventory is sufficient and primarily fast-moving, with a 90-10 ratio of fast-moving to slow-moving items. The company's experienced inventory management and pricing policies are designed to mitigate the impact of gold price fluctuations, ensuring that price corrections do not significantly affect margins or business operations.

Ambitious Growth and Profitability Outlook

Looking ahead, Khazanchi Jewellers is building a strong foundation for sustainable growth, targeting a 25-30% year-on-year growth trajectory for FY27 and the next five years. A key strategic goal is to increase the retail segment's contribution to total sales from approximately 10% to 25% within the next two financial years, which is expected to significantly boost the bottom line. For FY27, the company is confident of achieving a PAT margin of 35%, driven by higher margins from the new retail store and a continued focus on higher-margin product categories.

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