D. P. Abhushan Limited — Q1 FY26 earnings call

Call held 30 Jul 2025

Management summary

D.P. Abhushan reported a strong quarter in terms of profitability, with significant margin expansion driven by rising gold prices and a favorable product mix, which more than offset a 10-12% decline in sales volume. The management laid out an aggressive expansion plan, aiming to reach 50 stores by FY30, funded by a proposed ₹600 crore QIP. While the long-term vision is clear, the call was marked by contradictory short-term guidance for FY26 revenue and margins, which management deflected when questioned, creating some uncertainty for investors.

Highlights

  • Revenue grew 7% YoY to ₹541 crores, despite a 10-12% volume decline due to high gold prices.

  • EBITDA surged 44% YoY to ₹55 crores, with EBITDA margin expanding significantly to 10.21%.

  • Profit After Tax (PAT) increased 45% YoY to ₹36 crores, with PAT margin at 6.73%.

  • Revenue mix was dominated by Gold (91%), followed by Diamonds (6%) and Silver (3%).

  • Announced plans to raise up to ₹600 crores via Qualified Institutional Placement (QIP) to fund aggressive store expansion.

  • Company aims to increase studded jewellery contribution from 6% to 15% by FY30 to improve margins.

  • Management provided strong revenue guidance of ₹4,500 crores for FY26 and ₹6,000 crores for FY27.

  • Mature stores achieve a high inventory turnover of 8 times, with average turnover across all stores at 5-6 times.

Concerns

  • Volume decline due to high gold prices

  • Contradictory financial guidance for FY26

Key financials

  1. Total Revenue ₹541 Cr +7.1%YoY
  2. EBITDA ₹55 Cr +44.7%YoY
  3. EBITDA Margin 10.2%
  4. PAT ₹36 Cr +44%YoY
  5. PAT Margin 6.7%

What they filed

Q4 FY26: revenue up 86.2%, net profit up 104.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ1 FY25Q2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26
Revenue505 1,005 1,084 717 540 +7%968 −4%1,222 +13%1,335 +86%
EBITDA38 38 55 42 54 +42%76 +100%106 +93%69 +64%
Net profit25 25 37 25 36 +44%51 +104%73 +97%51 +104%
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

  • Product Revenue Mix
    91% Gold6% Diamonds3% Silver

Guidance & targets

Revenue

  • Total Revenue Revenue · FY26 · Medium confidence ₹4,500 crores
    Yes, and for FY’26 we are aiming for ₹4,500 crores, including contributions from the new stores.

    — Vikas Kataria

  • Total Revenue Revenue · FY27 · Medium confidence ₹6,000 crores
    FY’27 Rs. 6,000 crores.

    — Vikas Kataria

Margin

  • EBITDA Margin Margin · FY26 · Medium confidence 6%
    6% and 6.5% we are aiming.

    — Vikas Kataria

  • EBITDA Margin Margin · FY27 · Medium confidence 6.5%

    — Vikas Kataria

Expansion

  • Total Store Count Expansion · by FY 2030 · High confidence 50 stores
    Going forward, we plan to open seven to nine stores every year, with a target of reaching fifty stores by FY 2030.

    — Vikas Kataria

  • New Stores Opening Expansion · FY26 · High confidence 6 stores
    We are planning to open six additional stores in FY’26 and seven more in FY’27, as mentioned earlier.

    — Sagar Shukla (analyst summarizing), Vikas Kataria (confirming)

  • New Stores Opening Expansion · FY27 · High confidence 7 stores

    — Vikas Kataria

Product Mix

  • Studded Jewellery Contribution Product Mix · next 3-4 years / by FY 2030 · High confidence 15%

    From 6% today

    Over the next three to four years, we are aiming to increase this to 15%. Our target is to reach that 15% mark by FY 2030.

    — Vikas Kataria

Fundraising

  • QIP Amount Fundraising · FY26 · High confidence up to ₹600 crores
    To support this ambitious growth roadmap, we are raising up to INR 600 crores via the Qualified Institutional Placement (QIP) route.

    — Santosh Kataria

Risks & concerns

  • Volume decline due to high gold prices

    high

    Management confirmed a 10-12% volume decline in Q1 and acknowledged that elevated prices are impacting consumer demand.

    Management acknowledged

  • Contradictory financial guidance for FY26

    high

    Management gave conflicting guidance for FY26 revenue growth (10-15% vs ~35%) and margins (8% vs 6%) and did not clarify on the call.

    Analyst deflected

  • Intense Competition

    medium

    The company faces strong competition from both large national chains (Tanishq, Malabar) and established local jewelers in every market.

    Management acknowledged

  • Slower than expected ramp-up of studded jewellery sales

    medium

    An analyst pointed out that studded jewellery sales were lower YoY, which could challenge the company's margin expansion strategy if the trend continues.

    Analyst downplayed

Areas of evasion (1)

  • Clarification on contradictory FY26 revenue and margin guidance

Q&A highlights

2 direct, 1 evasive
Contradictory FY26 Guidance Evasive
We'll share those details with you separately. We'll make sure to send you the complete information.

Management provided conflicting FY26 revenue growth guidance (10-15% vs. ~35%) and refused to clarify on the call, creating significant uncertainty around near-term targets.

Asked by Mayank

High Inventory Turnover Direct
One of our core strengths is daily inventory replenishment. Unlike monthly or weekly cycles, we replenish sold products immediately. As soon as an item is sold, it is restocked without delay.

This question addressed a key operational metric. The detailed response on daily replenishment and inter-store shuffling provides insight into the company's high efficiency and claimed low dead-stock levels, which is a core part of their investment thesis.

Asked by Manav

Expansion Strategy and Funding Direct
Over the past five years, we've opened six stores, but we now believe the brand is ready to scale. The market is shifting rapidly from unorganized to organized retail, and we see this as the right time to expand.

This clarifies the rationale behind the accelerated expansion and the ₹600 crore QIP, signaling a major strategic shift from gradual to rapid growth to capture market share.

Asked by Sagar Shukla

2 min read 5 chapters

Detailed narrative

Q1 Performance: Margin Expansion Offsets Volume Decline

D.P. Abhushan reported a 7% YoY revenue growth to ₹541 crores for Q1 FY26. This value growth was achieved despite a significant 10-12% decline in sales volume, a trend management attributed to record-high gold prices impacting consumer sentiment. The highlight of the quarter was a sharp 44% YoY increase in EBITDA to ₹55 crores, leading to a substantial margin expansion to 10.21%. This was primarily driven by inventory gains from rising gold prices and a focus on higher-margin products.

Aggressive Expansion Funded by ₹600 Crore QIP

The company unveiled an ambitious expansion plan, shifting from opening about one store per year to a much faster pace. They plan to raise up to ₹600 crores through a QIP to fund this growth. The immediate target is to open six new stores in FY26 and seven in FY27, with a long-term goal of reaching 50 stores by FY2030. This expansion will focus on high-potential Tier 2 and Tier 3 markets in Madhya Pradesh and Rajasthan, while also entering new states like Gujarat and Chhattisgarh.

Store Economics and Operational Model

Management detailed their two-format store strategy. Mid-size stores (<5,000 sq. ft.) require an inventory of ~₹50 crores and a CAPEX of ₹2.5-3 crores. Large-format stores (>8,000 sq. ft.) need ~₹100 crores in inventory and ₹5-7 crores in CAPEX. A key operational strength highlighted was the high inventory turnover, reaching 8 times in mature stores, driven by a daily replenishment system. This efficiency allows new stores to target EBITDA breakeven within 6-9 months of operation.

Strategic Focus on Studded Jewellery

To enhance profitability, the company is strategically focusing on increasing its share of diamond-studded jewellery. The current contribution is 6% of total sales, with a target to increase this to 15% by FY2030. Management noted that margins on diamond jewellery are approximately 20% higher than plain gold. Initiatives like the annual 'Parinay' event are designed to promote these collections and drive the mix-shift towards higher-margin products.

Uncertainty in FY26 Guidance

While the long-term outlook was bullish, the guidance for the current fiscal year (FY26) was confusing. In the same call, management guided for 10-15% sales growth but also stated a revenue target of ₹4,500 crores (implying ~35% growth from FY25's ₹3,300 crores). Similarly, margin guidance was given as both 'around 8%' and '6% EBITDA'. When an analyst pointed out this discrepancy, management deflected the question, creating uncertainty around the company's near-term financial projections.

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