D. P. Abhushan Limited — Q4 FY26 earnings call

See Chetan, the gold prices was playing a very important role in the last quarter, which everybody has visualized, because of the geopolitical situation. But, nevertheless, on the steady side, for the entire year, when we look at the numbers, so the GP has been increased almost 30% as compared to the previous year where we had a GP of around 7.72% compared to with the 10% GP we have achieved during this year.

Clarifies the reasons for Q4 margin pressure while highlighting overall FY26 gross margin improvement, indicating a short-term impact rather than a structural issue.

Asked by Chetan

It may have an impact slightly on the margin side. But, yes, we have started taking all the possible segment of the products available in the market, whether it is GML or whether it is future market or any kind of leasing, which is available in the market. And it is going to help in our working capital cycle also. And definitely, the finance cost is going to gradually go down also.

Explains the strategic benefits of new risk management tools beyond just margins, including working capital and finance cost reduction.

Asked by Chetan

Yes, we are planning to undertake a QIP; however, we have currently put it on hold as market conditions are not favourable. As a result, we have not proceeded with it yet. That said, our growth plans remain intact, and we continue to expand steadily each year. As mentioned earlier, we are focusing on expansion across Madhya Pradesh, Rajasthan, Gujarat, Chhattisgarh, and Maharashtra. For this year, we have planned to open three to four new stores. Additionally, we have already finalized one franchisee and will be opening one franchisee store as well.

Reveals that QIP is postponed, raising questions about funding for ambitious expansion plans, though management assures internal accruals and bank funding will suffice.

Asked by Kanishk Gupta

We operate in the jewellery business, where a significant portion of capital is tied up in inventory. Whenever we open a new store, we need to invest in building inventory for that location. Therefore, as we continue to expand our store network, our capital requirements for inventory will also increase. For instance, this year we opened a new store in Dhar, for which we had to build the necessary inventory. As a result, inventory will always remain a key area requiring continuous capital deployment.

Highlights the inherent challenge of capital intensity in the jewellery retail model, where expansion directly impacts cash flow due to inventory needs, suggesting sustained negative operating cash flow during growth phases.

Asked by Kanishk Gupta

We will definitely try to outperform our previous performance. See, the Prime Minister's statement may have a slight short-term impact on sentiment, but overall, we believe the underlying demand for gold remains strong. Also, in India, a large amount of gold is already held by customers, and we are seeing good traction in the exchange segment. Many customers are now looking at converting their old, idle jewellery which has been lying in lockers for years into new designs. We are actively focusing on this and strengthening our exchange programs.

Addresses a key macro concern, acknowledging potential short-term sentiment impact but emphasizing underlying demand strength and the role of gold exchange programs in mitigating effects.

Asked by Shafaat Hussain

Our approach is slightly different we usually prefer entering markets where we can build a strong position rather than going directly into highly crowded areas with many established brands. For example, in Gujarat, we are starting with Dahod and then moving to Baroda, where we already have an existing customer base from nearby regions. This helps us enter the market with better traction. That said, Rajasthan remains a key focus for us. We are planning to open a store in Jodhpur, and Jaipur is definitely part of our future expansion roadmap. We are targeting Jaipur in the next one to two years.

Provides insight into the company's measured market entry strategy, prioritizing brand building in surrounding regions before tackling highly competitive Tier-1 cities, with specific timelines for Jaipur.

Asked by Shafaat Hussain

Sure. In FY26, most of our growth was driven by value rather than volume. On the volume side, we actually saw a decline of around 20% overall. This trend was largely in line with the broader industry, where volume growth remained under pressure due to high gold prices. Throughout FY26, gold prices were on an upward trajectory and quite volatile, which impacted affordability and consumer buying patterns. As a result, while value growth remained strong, volume growth was relatively muted.

Clarifies that strong revenue growth was primarily value-driven, with a significant 20% decline in volume, a critical distinction for understanding underlying demand health in a high-price environment.

Asked by Subhanu Bangal

So, the overall plan remains the same. We have only slowed down the pace of expansion due to the current scenario. However, we are still aiming to achieve our targets. Our long-term goal is to reach around 51 stores by 2030. That said, some expansion may be deferred by one or two quarters due to the recent initiatives announced by the Honourable Prime Minister. We are closely monitoring the impact before proceeding further. If everything remains under control. We will open around five to six stores this year, and we plan to continue at a similar pace next year. However, on a more conservative basis, we may scale this down slightly to around three to four store additions, depending on market conditions.

Confirms a downward revision in short-term store expansion and revenue targets for FY27, attributing it to the 'current scenario' and PM's initiatives, indicating a more cautious near-term outlook.

Asked by Abhi Bilala