RBZ Jewellers Limited

RBZ Jewellers reported robust financial performance in Q2 FY26, with revenue from operations growing 24% year-on-year to INR 145 crores and 92% quarter-on-quarter. This growth was attributed to successful new design launches, improved productivity, and positive consumer sentiment driven by the early onset of the festive season. EBITDA saw a significant increase of 105% year-on-year to INR 28 crores, with margins expanding by 766 basis points to 19.5%, while PAT grew 130% year-on-year to INR 19 crores, achieving a PAT margin of 12.82%.

The company operates a unique diversified business model, serving national retailers on a wholesale and job work basis, alongside direct sales from its flagship retail store. The job work segment, which contributed significantly to Q2 volumes (250 kg out of 380 kg total), was highlighted as a key driver for margin expansion. Management explained that efficient gold recovery from wastage in job work directly adds to the bottom line, contributing to higher profitability compared to pure sales.

Encouraged by the strong performance of its Ahmedabad showroom, RBZ Jewellers plans to expand its retail presence in Gujarat by opening four new showrooms. Rajkot and Surat locations are finalized, with one store expected to open in Q4 FY26 and another in Q1 FY27. The company employs a data-driven approach to selecting locations, focusing on demographics and customer preferences, and aims to become a leading retail player in Gujarat.

While the company is strategically pushing for retail growth, its B2B segment (wholesale and job work) remains crucial. Management noted a shift in customer preference towards job work, particularly due to high gold prices, as corporates increasingly opt for gold metal loans. This shift, while impacting reported revenue, contributes positively to profitability through efficient operations and gold recovery. The company aims for a 50%-50% volume mix between retail and wholesale in the medium term.

Despite gold prices touching lifetime highs, the company maintained volume growth, demonstrating robustness. Management acknowledged the caution on revenue trends due to global precious metal price volatility but noted that price corrections often stimulate retail buying. They also highlighted that their book value of gold is well-managed to mitigate downside risks from metal price fluctuations.

RBZ Jewellers reiterated its full-year FY26 guidance of INR 700 crores in revenue and INR 45 crores in PAT, despite strong H1 performance, preferring to wait until Q3 results for any revisions. The company expects strong retail sales in Q3 and anticipates its new stores in Rajkot and Surat to achieve maturity revenues of INR 400-500 crores within 4-5 years, supported by a marketing budget of 2-3% for new store expansion.