BLUESTONE

BlueStone reported a robust Q4 FY26 with standalone revenue growing 49.1% year-on-year, contributing to a full-year revenue of INR 2,441 crores. This marks a milestone as the company's first full financial year as a listed entity, delivering four quarters of earnings post-listing. The period demonstrated strong growth momentum, deepening distribution penetration, and significant improvement in cohort productivity, setting a positive trajectory for the upcoming fiscal year.

The company's omnichannel model, seamlessly integrating digital and physical retail, continues to be a key driver of performance. As of March 26, BlueStone operated 340 stores across 134 cities, adding 17 stores during Q4 and 65 stores for the full year, significantly strengthening its national footprint. Management aims for a 20% annual growth in distribution, believing this mix of new and old stores provides good blended productivity.

Consumer demand remained resilient in Q4 FY26, with same-store sales growth (SSSG) at 34%. This growth was broad-based across all three months of the quarter, demonstrating the resilience of the demand environment. Management noted that this SSSG is a return to normal levels, as previous anomalies were due to sharp gold price increases, and they do not see stores capping out in terms of their potential.

The sharp increase in gold prices during the financial year led to a disproportionately higher value of closing inventory, causing inventory turns to fall from 1.3x in FY25 to 1.13x in FY26. This volatility also influenced the product mix, with studded share declining to about 55% in Q4. Management expects inventory efficiency to improve as gold prices normalize and believes their premium pricing strategy applies to both plain gold and studded categories.

ESOP costs saw an almost 80% rise over FY25, with an initial charge of INR 93 crores attributed to front-loaded accounting for options allocated to senior leadership. Approximately 90% of ESOPs are with the top six people, aimed at aligning management with long-term shareholder objectives. Management expects these costs to drop to INR 58 crores and then INR 28 crores in subsequent years, as the vesting period for many options is over six to seven years.

BlueStone's A&P spend as a percentage of revenue has decreased from 12% to 6% over the past two to three years. The company plans to maintain this percentage while increasing absolute spend, shifting from performance marketing to significant investments in brand building. This strategy is intended to drive long-term growth and expand the customer base, moving beyond tactical, sales-driven online marketing.