International Gemological Institute Limited — Q4 FY25 earnings call

Call held 21 Apr 2025

Management summary

International Gemmological Institute (India) Limited delivered strong Q1CY25 results, with consolidated revenue growing 15% QoQ to INR 305 crores and EBITDA up 29% QoQ to INR 196 crores. PAT expanded 24% QoQ to INR 141 crores, driven by robust volume growth of 13% QoQ and significant margin expansion. The company is confident of maintaining growth momentum, leveraging its leadership in lab-grown diamonds and expanding its presence, while closely monitoring global trade policy uncertainties.

Highlights

  • Consolidated revenue of INR 305 crores, up 15% QoQ and 10% YoY.

  • Consolidated EBITDA of INR 196 crores, up 29% QoQ and 13% YoY.

  • Consolidated PAT of INR 141 crores, up 24% QoQ and 12% YoY.

  • PAT margins expanded 330 bps QoQ to 46.2% and 80 bps YoY.

  • EBITDA margins expanded 680 bps QoQ to 64.2% and 180 bps YoY.

  • Reported volumes grew 13% QoQ and 27% YoY to 3.12 million reports.

  • India business recruited over 130 gemologists in Q1CY25, representing 14% of overall employee strength.

Concerns

  • Potential impact of US tariffs on the diamond and jewelry industry, though no immediate softness observed by IGI.

  • Revenue growth in Q1CY25 lagged volume growth due to a one-time LGD certification price correction in Q2CY24.

Key financials

  1. Revenue from Operations ₹305 Cr +10%YoY
  2. Certification Income ₹297 Cr +11%YoY
  3. Reported Volumes 3.12 million reports +27%YoY
  4. EBITDA ₹196 Cr +13%YoY
  5. EBITDA Margins 64.2%
  6. PAT ₹141 Cr +12%YoY
  7. PAT Margins 46.2%

What they filed

Q1 FY27: revenue up 23.3%, net profit up 30.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue250 265 305 301 304 +22%320 +21%369 +21%371 +23%
EBITDA147 152 196 174 176 +20%191 +26%236 +20%224 +29%
Net profit110 114 141 127 130 +18%135 +18%180 +28%166 +31%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Natural Diamonds (loose)
    30% Revenue Growth
  • Lab-grown Diamonds (loose)
    30% Revenue Growth9% Revenue Growth
  • ND Jewelry
    21% Revenue Growth
  • LGD Jewelry
    87% Revenue Growth
  • Gemstones
    16% Revenue Growth
  • Jewelry Segment
    5% Revenue Growth

Capital allocation

low confidence
  • Capex Capex disclosed
    an operational cost which we have to take and the capex is minimal.

Guidance & targets

Revenue

  • Consolidated Revenue Growth Revenue · CY25 · High confidence 15-20%
    I think we should therefore expect to grow between 15% and 20% from a revenue standpoint in this financial year at the consolidated level.

    — Eashwar Iyer

Profitability

  • Consolidated PAT Margin Profitability · CY25 · High confidence 57-64%

    From 57% today

    I think we delivered around 57% PAT margins last year for the full year 2024. The quarter 1 performance has seen substantial improvements in margins... So anything between 57 and 64 is what we think we will deliver from a PAT margin standpoint for the full year this year.

    — Eashwar Iyer

Volume

  • Volume Growth Volume · next three to five years · High confidence 20% plus
    Yes, that continues to be the endeavor of the company to meet its strategic objectives for the next three to five years.

    — Eashwar Iyer

Growth Momentum

  • Revenue and EBITDA Growth Growth Momentum · this year · Medium confidence in line with historical performance
    Overall, we are confident of maintaining the growth momentum and delivering revenue and EBITDA growth this year in line with our historical performance.

    — Tehmasp Printer

What to watch in Q1 FY26

Impact of US Tariffs on Demand

Next quarter (Q2CY25)
Current No immediate impact observed in early April.
Target Continued stability in demand, no significant disruption.

Why it matters

Tariffs are a global disruptor; any material impact on IGI's business would be a significant concern for future performance.

at the moment, at least as far as the firstly 2, 3 weeks of April goes, we haven't seen any, indication to the contrary versus what our performance has been for quarter one.

Risks & concerns

  • Trade Policy Changes / US Tariffs

    medium

    Trade policy changes, including recent US tariffs, are being closely watched and evaluated by the diamond and jewelry industry, though no immediate impact on IGI observed.

    Management acknowledged

  • Revenue Growth Lagging Volume Growth

    low

    Revenue growth in Q1CY25 lagged volume growth due to a one-time LGD certification price correction in Q2CY24, but is expected to normalize from Q3 onwards.

    Management acknowledged

Q&A highlights

4 direct
Impact of US Tariffs on Demand Direct
at the moment, at least as far as the firstly 2, 3 weeks of April goes, we haven't seen any, indication to the contrary versus what our performance has been for quarter one. So again, it's been the normal stuff that we've been running.

Addresses a significant macroeconomic risk, indicating no immediate negative impact on IGI's business despite global trade policy changes.

Asked by Aliasgar Shakir

Sustainability of LGD Pricing and Future Price Cuts Direct
I don't expect any major correction to therefore happen as far as lab grown diamonds are concerned.

Provides confidence in the stability of LGD certification prices, which was a concern due to past corrections, citing manufacturers' limited margin flexibility.

Asked by Ashutosh Garud

Seasonality and Revenue Mix Shift Partial
from a volume standpoint... flat seasonality across quarters. What is at play, obviously, is the slightly changing dynamics of mix across each of these segments because if you recollect the discussion that we had during the quarter four call, we had mentioned that the jewelry mix was pretty high, given the fact that it was a Diwali festive quarter, right?

Clarifies that while overall volumes show flat seasonality, shifts in revenue mix (e.g., higher jewelry in festive quarters) can impact quarter-on-quarter revenue composition.

Asked by Harit Kapoor

India Growth vs Consolidated Growth Direct
Yes, at the moment we are seeing India growth to be faster than the consolidated growth, given the fact that all of the lab grown that is grown, a majority of that is getting cut and polished here in India.

Highlights India's strategic importance as a manufacturing hub and a key growth driver for the overall business, expected to outperform other geographies.

Asked by Gopal Nawandhar

International Subsidiary Margins (Belgium, Netherlands) Direct
initial first quarter trends are extremely positive and gives us a lot of confidence that, this should progress in the strategic direction that we have set them up for.

Indicates positive early results from strategic interventions in international markets, suggesting potential for sustained margin improvement and successful global expansion.

Asked by Anand Shah

2 min read 6 chapters

Detailed narrative

Strong Q1CY25 Performance Driven by Volume and Margin Expansion

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).

Strategic Focus on Lab-Grown Diamonds and India Market

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.

Pricing Stability and Future Growth Outlook

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.

Investment in Infrastructure and Digital Transformation

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.

Monitoring Global Trade Policy Impacts

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.

Positive Momentum in International Operations

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.

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