International Gemological Institute Limited

International Gemmological Institute (India) Limited reported a robust Q1CY25, with consolidated revenue growing 15% QoQ to INR 305 crores and 10% YoY. EBITDA saw a 29% QoQ increase to INR 196 crores, while PAT rose 24% QoQ to INR 141 crores. This performance was underpinned by a 13% QoQ and 27% YoY growth in reported volumes, reaching 3.12 million reports, and significant margin expansion with PAT margins at 46.2% (up 330 bps QoQ) and EBITDA margins at 64.2% (up 680 bps QoQ).

The company maintains its leadership in the lab-grown diamond sector with a 65% market share in certified lab-grown diamonds. Growth in this segment, particularly LGD Jewelry (up 87% YoY), is a key driver. India is a critical market, contributing over 75% of group revenues, and is expected to grow faster than consolidated operations due to its role as a manufacturing hub for lab-grown diamonds and increasing adoption of lab-grown diamond jewelry.

Following a one-time^📎 price correction in Q2CY24 for LGD certification services, prices have stabilized over the last three quarters. Management expects robust demand for both natural and lab-grown diamonds to continue, guiding for 15-20% consolidated revenue growth and 57-64% PAT margins for CY25. Volume growth is targeted at over 20% for the next three to five years, with revenue growth expected to mirror volume growth from Q3CY25 as the pricing correction cycles out.

To support anticipated volume growth, IGI is actively ramping up its human capital, having recruited over 130 gemologists in Q1CY25, representing approximately 14% of its overall employee strength. The company is also undertaking a digital transformation initiative aimed at enhancing service quality and reducing turnaround times. These investments are considered operational costs with minimal capex, focusing on beefing up capacities and abilities to maintain leadership.

While acknowledging global trade policy changes, including recent US tariffs, IGI has not observed any immediate softness in demand in the first few weeks of April. The company views the 90-day pause as an opportunity to evaluate impacts and strategize. As a service organization, the direct impact of tariffs on IGI's operations is expected to be less significant than on product-based businesses, with any incremental cost likely distributed across the value chain.

Strategic interventions in international geographies, including China, Dubai, Israel, Thailand, and Hong Kong (managed under the Netherlands group), are yielding positive results. The Netherlands entity already boasts over 25% EBITDA margins, and overall international trends are positive. Management expressed confidence that these strategic directions will continue to progress, contributing to the group's overall performance.