Goldiam Intl.

Goldiam International reported a robust H1 FY25, with consolidated revenue increasing by 19%, EBITDA growing by 21% (maintaining a 22.1% margin), and PAT rising by 8%. However, Q2 consolidated revenue saw only a marginal increase due to INR 40-45 crores of sales being delayed to Q3 because of flight cancellations to the US. Excluding these delays, Q2 revenue growth would have been a significant 38%, with standalone Q2 revenue up 34% and PAT up 74%.

Lab-grown diamond jewellery now constitutes a dominant 77% of Q2 revenue, with 21% generated from online channels, reflecting a strategic shift. Gross margins improved by 8 percentage points, attributed to opportunistic buying of discounted diamonds and an inventory appreciation gain. Management stated the inventory appreciation was INR 1.5 crores (corrected from INR 15 crores mentioned during the call), and expressed hope for margin sustainability if diamond prices remain stable.

The company launched its first ORIGEM store in Borivali, achieving INR 25 lakhs in sales within its first 10-12 days. Goldiam plans to roll out an additional 10-12 new stores across key locations in Mumbai, NCR, and Bangalore within the next six months. These stores will test different price points, with Kharghar focusing on lower ASPs (700-800 sq ft) and Turner Road on higher ASPs (1300-1400 sq ft). The retail venture is expected to operate at a negative EBITDA margin for the initial years, with a marketing spend of INR 5-6 crores over the next six months.

Goldiam ended Q2 FY25 with a strong order book of approximately INR 270 crores, which excludes the INR 40-45 crores of delayed Q2 shipments already fulfilled in October. The company also maintains a healthy cash and cash equivalent position, including investments, totaling INR 276 crores as of September 30. This financial strength supports its growth outlook and retail expansion plans, with capex per store estimated at INR 55-65 lakhs and inventory at INR 2.2-2.6 crores.

Despite a decline in LGD realizations from $821 to $660 due to a focus on half-carat and one-carat centers for special promotions, management emphasized strong margins. They anticipate 10-12% double-digit sales growth in the B2B segment over the long term^⏳, with 2-3 years of growth remaining with existing US retail clients. The company has also expanded into new geographies, with over $1 million in sales already shipped to Australia, expecting reorders from January.

Other expenses rose by 58% in Q2, primarily due to increased retail team expenses, a higher CEO salary in the US, and hiring contract manufacturing workers. Management aims to maintain consolidated EBITDA margins within the 18-22% range, even with the initial losses from the B2C business. They committed to sharing specific revenue and expenditure data for the B2C India operations from the next quarter in their corporate decks, enhancing transparency for the new venture.