D. P. Abhushan Limited

D.P. Abhushan Limited delivered a robust Q3 FY26, with revenue from operations reaching ₹1,222.4 crore, marking a 13% year-on-year and 26% quarter-on-quarter increase. EBITDA for the quarter stood at ₹105.6 crore, growing 89% YoY and 39% QoQ, with EBITDA margins expanding to 8.64%. Profit after tax (PAT) was ₹73.35 crore, up 96% YoY and 43% QoQ, achieving a PAT margin of 6.00%. For the nine-month period of FY26, revenue was ₹2,731.4 crore (up 5% YoY), EBITDA was ₹236.7 crore (up 79% YoY) with margins of 8.67%, and PAT was ₹161.24 crore (up 84% YoY) with margins of 5.90%.

The quarter saw elevated gold prices impacting purchase volumes and average ticket sizes, leading consumers to prioritize lightweight jewellery. While 22-carat gold remained preferred, interest in lower-purity options like 18-carat and 14-carat increased due to price sensitivity. Wedding-related purchases remained steady, and investment demand for gold was firm. Silver emerged as a significant category, with revenues rising sharply to ₹114 crore (up 118% YoY) for 9M FY26, supported by festive gifting and affordability.

Customer walk-ins over the nine-month period totaled 175,351, with a healthy conversion ratio of 82%, indicating sustained purchase intent. The company observed strong traction in markets like Kota, Ujjain, Bhopal, and Udaipur, while flagship locations in Ratlam and Indore maintained strong footfalls. Strategic initiatives included the 'World of Diamonds' exhibition in Ajmer and the 'Diamond Polki Festival' in Banswara and Bhilwara to enhance brand visibility and customer engagement for studded jewellery, which offers higher margins.

Margin expansion was primarily driven by higher gold prices, as percentage-based making charges naturally yield better margins on a higher base. Inventory gains contributed significantly, accounting for 25-28% of the margin increase. The strong growth in silver sales and an increased contribution from diamond jewellery, which carry higher margins than plain gold, also supported the overall margin profile. Management confirmed that these margins are sustainable, supported by ongoing inventory gains and a favorable product mix shift.

The company plans to open 4-5 new stores from next year, with two locations (Dhar, Madhya Pradesh, and Dahod, Gujarat) already finalized, and the Dhar store expected to open in the next 2-3 months. Over the next two to three years, D.P. Abhushan aims to open around 20 additional stores, focusing on Tier-2 and Tier-3 cities in Madhya Pradesh, Rajasthan, Chhattisgarh, Gujarat, and Maharashtra. The company expects 25-30% revenue growth for FY26 and a similar rate for FY27, with consistent same-store growth of 10-15%.

The capital expenditure for new stores ranges from ₹2.5-3 crore for 3,000-5,000 sq ft and ₹5-7 crore for 8,000-10,000 sq ft, with a payback period of approximately nine months. On November 4, 2025, the company granted 62,300 stock options under its Employees Stock Option Scheme, with 1,200 options forfeited by December 17, 2025. These ESOPs were allocated to key managerial personnel, senior personnel, and long-serving employees to foster engagement and alignment with long-term value creation.