D. P. Abhushan Q1 FY27 earnings call

D. P. Abhushan Limited delivered a strong Q1 FY27, with total revenue growing 58% year-on-year to INR 853.63 crores, up from INR 541 crores in Q1 FY26. Operating performance saw EBITDA increase by 70% year-on-year to INR 93.99 crores, resulting in an 80 basis points expansion of the EBITDA margin to 11.01%. Profit after tax (PAT) also demonstrated robust growth, rising 77% year-on-year to INR 64 crores, with PAT margin expanding 82 basis points to 7.55%.

The Indian jewellery industry faced a challenging start to FY27 due to elevated gold prices and an increase in import duty from 6% to 15% in May 2026, which initially subdued consumer demand in June. However, a subsequent sharp correction in gold prices during June, followed by relative stability in July, helped improve buying sentiment. Despite these fluctuations, the company reported a modest volume growth of 1-2% in Q1 FY27 compared to Q1 FY26, with management anticipating better volume growth as prices stabilize.

The company is actively pursuing its expansion strategy, having finalized locations for new showrooms in Jabalpur (3,750 sq. ft.) and Dahod, Gujarat (3,200 sq. ft.), which are expected to be operational soon. The Jabalpur store will be the first Franchisee-Owned Company-Operated (FOCO) model, while Dahod will be Company-Owned Company-Operated (COCO). D.P. Abhushan aims to add 5-6 new stores this year and reach a total of 51 stores by FY30, with an annual target of 6-8 new stores and an overall mix of 5-7 FOCO stores.

D.P. Abhushan has strengthened its digital presence by launching an e-commerce website and a mobile application, now available on both the Play Store and App Store. The company is also actively expanding its presence on leading online marketplaces. These initiatives are designed to enhance customer engagement, improve accessibility, and complement the physical store network, recognizing the growing importance of digital discovery in the jewellery buying journey.

Gold revenue increased 59% year-on-year to INR 781 crores, and silver revenue saw a significant 150% year-on-year growth to INR 40 crores. Wedding-related purchases remained the largest contributor, accounting for 62% of sales, with an average ticket size of approximately INR 1,57,000. The company aims to increase the contribution of its diamond segment from the current 6-7% to 12-15% by March 2028, targeting a 2x-3x growth in this category.

The newly launched DP Swarn Plus scheme, introduced in April, allows customers to contribute monthly and receive gold weight at the prevailing price, protecting them from price fluctuations. This scheme, along with old gold exchange, which contributed approximately 25% of total sales, supports affordability and reduces dependence on fresh gold procurement. The company manages inventory using a weighted average cost concept, with current inventory valued at INR 1,20,000 compared to a market price of INR 1,51,000-1,52,000, and employs various hedging mechanisms including GML and MCX.

D.P. Abhushan emphasizes its competitive advantage through strong brand trust, transparency, regional presence, wide product portfolio, and service excellence. Management highlighted that a single D.P. store in Indore generates more revenue than 14-15 stores of a leading national brand, underscoring the strength of its customer connect and operating model. The company's focus on providing a comprehensive 360-degree customer experience aims to maintain loyalty and market share.