BlueStone Jewellery and Lifestyle Limited — Q3 FY26 earnings call

Call held 29 Jan 2026

Management summary

BlueStone Jewellery and Lifestyle Limited reported a strong Q3 FY26, achieving its first quarter of net profit at ₹71.5 crores on revenues of ₹748 crores, up 27.4% YoY. This performance was driven by robust operating leverage, expanding contribution margins, and a growing customer base. Despite challenges from volatile gold prices and a temporary dip in entry-level demand, the company's omni-channel strategy and maturing store cohorts are expected to sustain revenue momentum and margin expansion.

Highlights

  • Revenue grew 27.4% year-on-year to ₹748 crores, demonstrating strong underlying growth trends.

  • Achieved first quarter of reported net profit (PAT) of ₹71.5 crores, a substantial improvement from a loss of ₹26.9 crores in the same quarter last year.

  • Pre-IndAS EBITDA margin stood at 12.1% (₹90.3 crores), driven by robust contribution margin performance and operating leverage.

  • Generated a solid cash profit of ₹122 crores for the quarter, reflecting strong operational efficiency.

  • Customer base expanded by 25% year-on-year, reaching 903,000 customers, and same-store sales growth (SSSG) was 12% year-on-year.

Concerns

  • Sharp rise in gold prices significantly altered the industry's demand mix towards lower-margin commodity and investment-led categories.

  • Vacated entry-level price points due to rising gold prices impacted growth in November and early December, though the company has since repopulated them.

  • Growth rate was perceived as slower compared to some peers, attributed to different product mix and reporting retail sales versus primary sales.

Key financials

  1. Revenue ₹748 Cr +27.4%YoY
  2. Pre-IndAS EBITDA ₹90.3 Cr
  3. Pre-IndAS EBITDA Margin 12.1%
  4. PAT ₹71.5 Cr
  5. Cash Profit ₹122 Cr
  6. Contribution Margin (ex-inventory gain) 33.3% +3.3%YoY

What they filed

Q1 FY27: revenue up 49.6%, net profit up 117.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue373 587 461 493 514 +38%749 +28%681 +48%737 +50%
EBITDA-4 50 25 55 40 +1010%165 +229%124 +396%107 +95%
Net profit-84 -27 -51 -35 -52 +38%69 +356%31 +161%6 +117%
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

high confidence
  • Debt Gross ₹650 Cr · Net ₹222 Cr
    Gopal Nawandhar: Two, three things here. One is what is our gross debt and net debt? Rumit Dugar: So, gross debt is about Rs. 650 crores, net debt is about Rs. 222 crores.

Guidance & targets

Revenue Growth

  • December Exit Revenue Growth Revenue Growth · December 2025 · High confidence ~35% year-on-year
    From our perspective, one of the impacts of rise in gold prices was that the certain entry-level price points got vacated. In response, we repopulated these price points and we saw the result of some of that in December, with December exit revenues growing approximately 35% year-on-year.

    — Gaurav Singh Kushwaha

Same Store Sales Growth (SSSG)

  • December SSSG Exit Rate Same Store Sales Growth (SSSG) · December 2025 · High confidence mid-teens
    Again, I would like to reemphasize that December same-store-sales-growth exit rates were in mid-teens, with January trending better than December.

    — Gaurav Singh Kushwaha

  • January SSSG Trend Same Store Sales Growth (SSSG) · January 2026 · Medium confidence trending better than December

    — Gaurav Singh Kushwaha

Store Additions

  • FY26 Store Additions Store Additions · FY26 · Medium confidence 65-70 kind of range

    Previously 75-80 (prior guidance) → 65-70 kind of range

    So, this year, I think we will be in that 65, 70 kind of range, right? We closed at 323 stores, so Y-o-Y in that 70 kind of handle versus March '25. I think next year we will come back to you once we finish this year. So, when we discuss Q4 is when we can give you better color in terms of how we are looking at next year.

    — Rumit Dugar

A&P Spend

  • A&P Spend as % of Sales A&P Spend · going forward · Medium confidence around 6%
    So, I think historically it was 12%, 9% and so on, and we expected it to come down to around 6%. At 6%, we will be scaling it very proportionally with the revenues. So, I think YTD is 6.8%, but since these are early stages for the brand also, we would like to keep it, kind of pegged at around 6% going forward.

    — Gaurav Singh Kushwaha

What to watch in Q4 FY26

FY26 Store Additions

next quarter (Q4 FY26)
Current 12 new stores added in Q3, total 323
Target 65-70 stores for FY26

Why it matters

Store expansion is a key driver of physical reach, customer acquisition, and future revenue growth for the omni-channel strategy.

So, this year, I think we will be in that 65, 70 kind of range, right? We closed at 323 stores, so Y-o-Y in that 70 kind of handle versus March '25.

Risks & concerns

  • Gold price volatility and demand mix shift

    medium

    Sharp rise in gold prices altered demand mix towards lower-margin commodity products, where the company is under-indexed, impacting growth.

    Management acknowledged

  • Merchandising issue with entry-level price points

    low

    Vacated entry-level price points due to rising gold prices impacted growth in November and early December, though the company has since repopulated them.

    Management acknowledged

Q&A highlights

4 direct, 1 evasive
Margin expansion drivers (QoQ) Direct
So, for that incremental revenue that we added sequentially, our aggregate cost base, including everything - employee cost, store rents, store facility maintenance costs do not shift significantly on a quarter-on-quarter basis. So, this is the foundational operating leverage that is inbuilt in our business.

Analysts sought clarity on the significant QoQ margin improvement, which management attributed to operating leverage from a relatively fixed cost base against rising revenues.

Asked by Percy Panthaki

Slower growth compared to peers Partial
So basically two things. So what that results in, that actually increases the demand for commodity products like gold coins, gold chains with very little margin and gold bangles with very low margin etc. And that is where a sharp increase in that demand comes from, and almost all the traditional jewelers are heavily indexed on those, and whereas we are extremely under-indexed on all those products.

Management explained that gold price volatility shifted demand to lower-margin commodity products, where BlueStone is under-indexed, and also highlighted the difference in reporting retail vs. primary sales compared to peers.

Asked by Devanshu Bansal

Strategy for Lab Grown Diamonds (LGD) via Ethereal Direct
So, very early days for lab grown. We are seeing some good traction in lab-grown brand Ethereal. They have very few stores, and it is kind of a discovery phase and it seems to be doing well. And hence we have decided to put in some more money.

Analysts inquired about the company's approach to the emerging LGD market, with management confirming investment in its subsidiary Ethereal, which is in a discovery phase.

Asked by Devanshu Bansal

Reduction in 'Other Expenses' YoY Direct
So, if the productivity at a factory level is X, which is a new factory; over time, as people build more process efficiency, the amount of people, time, material etc. that you need to spend on, that goes down. So, there is that absolute operating leverage that comes because you are pushing up manned capacity utilization.

Management clarified that the reduction in absolute 'Other Expenses' was due to improved manufacturing efficiency, better capacity utilization, and factory consolidation, leading to operating leverage.

Asked by Saurabh Jain

A&P expenses outlook Direct
So, I think historically it was 12%, 9% and so on, and we expected it to come down to around 6%. At 6%, we will be scaling it very proportionally with the revenues. So, I think YTD is 6.8%, but since these are early stages for the brand also, we would like to keep it, kind of pegged at around 6% going forward.

Management provided a clear target for A&P spend as a percentage of sales, indicating a continued focus on operating leverage as the business scales.

Asked by Saurabh Jain

Sustainability of PAT positive quarter Partial
I think fundamentally there is enough operating leverage in the business, which has got demonstrated in the past three quarters, particularly you have seen it in Q3 as well. So, we see still runway for margin improvement versus where we are on YTD, and that is where we would like to leave this at.

Analysts questioned if the first PAT-positive quarter was sustainable, with management expressing confidence due to embedded operating leverage and continued room for margin improvement.

Asked by Sanidhya

Inventory increase and mark-to-market (MTM) impact Evasive
So, Gopal, bulk of the change in inventory is actually driven by movement in gold price on the hedge positions. So, bulk of the change between Q2 and Q3 is coming from mark-to-market on hedge positions, so it is largely driven by that.

Analysts pressed for details on inventory changes and potential MTM losses from hedging, which management attributed to gold price movements on hedge positions but did not fully elaborate on the P&L impact, offering to take it offline.

Asked by Gopal Nawandhar

3 min read 7 chapters

Detailed narrative

Strong Q3 Performance & Profitability Inflection

BlueStone Jewellery and Lifestyle Limited achieved a significant milestone in Q3 FY26, reporting its first quarter of net profit at ₹71.5 crores, a substantial turnaround from a loss of ₹26.9 crores in the prior year. This was supported by a robust revenue growth of 27.4% year-on-year, reaching ₹748 crores. The company also delivered a solid operating EBITDA performance, with a pre-IndAS EBITDA of ₹90.3 crores, translating to a 12.1% margin for the quarter. This profitability inflection is attributed to disciplined execution and structural investments over several years.

Demand Environment & Gold Price Impact

The quarter saw a challenging demand environment due to a sharp rise in gold prices, which shifted market demand towards lower-margin commodity and investment-led categories like coins and chains. BlueStone, with its 'Technology-Led Product-First' approach, typically focuses on higher-margin, design-differentiated products. The company also noted that rising gold prices vacated certain entry-level price points, impacting growth in November and early December. However, these price points have since been repopulated, leading to a rebound in December exit revenues, which grew approximately 35% year-on-year.

Omni-channel Strategy & Store Expansion

The company's omni-channel strategy continues to be a key enabler for its performance, seamlessly integrating online presence with a growing physical retail footprint. As of December-end, BlueStone operated 323 stores across 130 cities, having added 12 new stores during the quarter. This expansion strengthens its reach and brand presence, contributing to a 25% year-on-year growth in its customer base, which now stands at 903,000. The same-store sales growth (SSSG) for the quarter was 12% year-on-year, with December exit rates in the mid-teens and January trending even better.

Cohort Performance & Operating Leverage

A critical driver for long-term growth and margins is the strong performance of its store cohorts. Stores opened in FY19-20 delivered an annualized revenue of approximately ₹14 crores per store, while FY21-22 and FY23 cohorts achieved ₹10 crores and ₹8.3 crores, respectively. Management expressed confidence that all remaining cohorts will eventually catch up to the productivity levels of the FY19-20 cohorts. This maturing of cohorts, combined with a relatively fixed cost base, is generating significant operating leverage, allowing incremental revenue to flow through to EBITDA at a high rate.

Financial Highlights & Margin Drivers

Excluding inventory gains, the contribution margin for the quarter stood at 33.3%, an improvement of 333 basis points year-on-year. This was achieved despite a lower studded mix (61% Y-o-Y), offset by scale benefits, an improved product mix within studded products, and manufacturing efficiencies. Advertising and promotion (A&P) spends continued to show operating leverage, decreasing to 5.7% of sales for the quarter, down approximately 129 basis points year-on-year. The company also generated a solid cash profit of ₹122 crores for the quarter.

Lab-Grown Diamonds (Ethereal) Strategy

BlueStone is exploring the Lab-Grown Diamonds (LGD) space through its subsidiary, Ethereal, in which it holds a 74% stake. Management noted good traction for Ethereal, which is currently in a 'discovery phase' with a limited number of stores. The company plans to invest more in Ethereal, allowing its founders to discover products and customer segments independently. There is minimal operational overlap with BlueStone, as Ethereal is still in its early stages of understanding market dynamics and product-market fit.

Debt and Inventory Position

As of the quarter-end, BlueStone reported a gross debt of ₹650 crores and a net debt of ₹222 crores. The total inventory stood at ₹2,280 crores. Management clarified that the bulk of the change in inventory from the previous quarter was primarily driven by the mark-to-market movement on hedge positions related to gold prices. The company also confirmed that its strategy of converting franchisee-owned (FOCO) stores to company-owned (COCO) stores is ongoing, as it is considered PAT accretive and improves the capital structure.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Consumer Durables earnings calls