Vaibhav Global Limited — Q2 FY26 earnings call

Call held 30 Oct 2025

Management summary

Vaibhav Global reported a strong Q2 FY26 with double-digit revenue growth and significant PAT increase, despite macro headwinds. The company maintained robust gross margins and saw EBITDA margin expansion driven by operational efficiencies and strategic investments in digital customer acquisition. Regional performance was mixed, with solid growth in the US and UK, while Germany remained flat due to internal digital team restructuring. Management reiterated its FY26 revenue guidance and expressed confidence in medium-term growth and margin improvement.

Highlights

  • Consolidated revenue grew 10.2% YoY to INR877 crores.

  • Gross margin remained strong at 63.5%.

  • EBITDA margin expanded by 130 bps YoY to 10%.

  • PAT increased by 71% YoY to INR48 crores.

  • Digital sales contributed 42% to B2C revenue, on track for 50% by FY27.

  • US revenue grew 6.7% (USD terms), UK grew 5.7% (USD terms), while Germany remained flat.

  • New customer acquisition (TTM) was 3,80,000, with unique customer base reaching 7,14,000 (up 5% YoY).

  • Board declared a second interim dividend of INR1.5 per equity share, implying a 53% payout.

Key financials

  1. Revenue ₹877 Cr +10.2%YoY
  2. Gross Margin 63.5%
  3. EBITDA Margin 10%
  4. PAT ₹48 Cr +71%YoY
  5. Operating Cash Flow ₹66 Cr
  6. Free Cash Flow ₹55 Cr
  7. Net Cash ₹156 Cr
  8. ROCE 20%
  9. ROE 13%

What they filed

Q1 FY27: revenue up 12.7%, net profit up 47.4% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue796 977 850 814 877 +10%1,066 +9%935 +10%917 +13%
EBITDA60 110 62 62 78 +30%136 +24%83 +34%97 +56%
Net profit28 64 34 38 48 +71%90 +41%91 +168%56 +47%
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

  • US
    6.7% Revenue Growth
  • UK
    5.7% Revenue Growth
  • Germany
    0% Revenue Growth0.75 million eur H1 FY26 EBITDA Loss
  • Digital Sales (B2C)
    42% Contribution to Revenue
  • TV Business
    ₹487 Cr Revenue6.7% Revenue Growth
  • Digital Business
    ₹336 Cr Revenue14.3% Revenue Growth
  • Lifestyle Products
    36% % of Total Sales
  • Budget Pay Program
    38% % of B2C Revenue
  • Lab-Grown Diamond Sales
    10.3% % of Total Sales

Guidance & targets

Market Share

  • Digital Sales Contribution to Overall Revenue Market Share · FY27 · High confidence 50%
    Digital now contributes 42% of overall revenue, and we remain on track to reach 50% by FY27.

    — Nitin Panwad

Profitability

  • Germany EBITDA Profitability · full year FY25-26 · High confidence breakeven
    We are confident of delivering EBITDA breakeven for the full year FY25-26.

    — Sunil Agrawal

  • Operating Margins Profitability · medium term · Medium confidence steady improvement
    Over the medium term, we continue to aim for mid-teen revenue growth along with operating leverage.

    — Sunil Agrawal

Other

  • Carbon Neutrality (Scope 1 and Scope 2) Other · by 2031 · High confidence achieved
    We are advancing towards our goal of achieving carbon neutrality under Scope 1 and Scope 2 by 2031.

    — Sunil Agrawal

  • Mid-day Meals Served Other · by FY40 · High confidence 1 million meals per school day

    From 55,000 meals every school day today

    We continue to strive towards our goal of serving 1 million meals per school day by FY40.

    — Sunil Agrawal

Revenue

  • Revenue Growth Revenue · FY26 · High confidence 7% to 9%
    We are maintaining our FY26 revenue guidance at 7% to 9%, supported by operating leverage.

    — Sunil Agrawal

  • Revenue Growth Revenue · medium term · Medium confidence mid-teens
    Over the medium term, we continue to aim for mid-teen revenue growth along with operating leverage.

    — Sunil Agrawal

  • Germany Growth Revenue · this quarter, this year and next · Medium confidence double digits
    I can't say 20% or so, but I can say double digits, that is what our expectation is for this quarter and, this year and next.

    — Sunil Agrawal

Ad Spend

  • Content and Broadcasting Expense Ad Spend · FY26 · Medium confidence 19%
    The content broadcasting past financial year was roughly 19%, and we maintain because this was the area where we are investing most of the amount over here... But we expect that this cost will be in the range of 19%.

    — Nitin Panwad

Customer Acquisition

  • Customer Acquisition Cost Recovery Period Customer Acquisition · High confidence within 3 to 6 months

    Previously 6 to 9 months → within 3 to 6 months

    Our aim is to bring that down to within 3 to 6 months of the acquisition of the customer.

    — Sunil Agrawal

Market context

  • Ideal World EBITDA Margin Profitability · next 2 years · Medium confidence double-digit

    From low single-digit today

    Ideal World has already achieved a low single-digit EBITDA margin and is on the course of achieving double-digit EBITDA margin in the next 2 years.

    — Nitin Panwad

Risks & concerns

  • Macroeconomic Headwinds & Geopolitical Uncertainties

    medium

    The company reported strong growth despite macro headwinds and acknowledged external risks persist.

    Management acknowledged

  • Tariff-related Challenges

    medium

    Addressed tariff uncertainties by pivoting to casting process in the US and procuring parts locally.

    Management acknowledged, mitigating actions taken

  • Consumer Sentiment Subdued

    medium

    Consumer sentiment in the US is subdued due to tariffs, inflation, and immigration, leading to cautious guidance despite competitive advantages.

    Management acknowledged, cautious guidance

  • Digital Revenue Decline in Germany

    low

    Germany's digital revenue declined 9% due to internal team realignment and restructuring, but management expects a recovery.

    Management acknowledged, internal issue, corrective actions taken

Areas of evasion (1)

  • The analyst's specific concern about the multi-quarter trend of US profitability was not directly confronted, instead, a single quarter's YoY comparison was provided.

Q&A highlights

2 direct
US Profitability Trend and Digital Investments Partial
So first in the U.S. profitability. So U.S. has a growth of 6.7%. And we have invested the money mainly in our digital marketing, where we have done our investment in OTT apps like Roku, and also the digital platforms like AppLovin. So this quarter compared to last year, around 10 basis points in our margins in U.S., from 5.1% to 5.2% compared to last year same time.

Analyst pointed out a declining trend in US margins over the last 4 quarters, but management only addressed the Q2 YoY comparison, partially sidestepping the broader trend and suggesting potential sustained margin pressure from digital investments.

Asked by Shreyansh Jain

Germany Growth Potential and Digital Team Restructuring Direct
Sure. Germany, our own internal challenge in quarter, where we had our digital team was restructured that some of the earlier players that we had, the overall e-com lead, the better marketer, the Google marketer, we changed everybody. So that disruption caused digital to reduce by 9%.

This question revealed an internal operational issue (digital team restructuring) as the primary reason for Germany's flat revenue and digital decline, rather than external market factors, providing specific insight into a key market's underperformance.

Asked by Rupesh Tatiya

Impact of US Casting Operations on Tariffs and Margins Direct
And the original major portion of jewelry is made in the U.S., the tariff -- the reciprocal tariff is not applicable on the valuable part. And when the casting is U.S. made, there is no tariff -- there is 0 tariff on the casting portion of itself, which used to be 5.5% earlier. So all in all, our cost the tariff cost comes to below 5.5%, which used to be pre-reciprocal tariff.

This clarifies how the new US casting operation directly mitigates tariff impacts, potentially improving gross margins and offering competitive pricing, which is crucial for the company's core jewelry business in its largest market.

Asked by Deepesh

2 min read 6 chapters

Detailed narrative

Strong Q2 FY26 Performance Amidst Macro Headwinds

Vaibhav Global reported a consolidated revenue of INR877 crores, marking a 10.2% year-over-year growth, exceeding its guidance range. Gross margin remained robust at 63.5%, supported by its vertically integrated supply chain. Profit After Tax (PAT) saw a significant 71% year-over-year increase to INR48 crores, with EBITDA margin expanding by 130 basis points to 10%. The company's balance sheet remains strong with INR156 crores of net cash, reflecting prudent financial management.

Digital Transformation and Regional Dynamics

Digital sales now contribute 42% to B2C revenue, with the company on track to achieve 50% by FY27. In USD terms, the US market grew by 6.7% and the UK by 5.7%, while Germany's revenue remained flat. Germany's digital revenue declined by 9% due to internal team restructuring, though management expects breakeven for FY26 and double-digit growth going forward. The TV network reached 127 million households, and the unique customer base grew 5% YoY to 7,14,000.

Strategic Investments and Tariff Mitigation

The company has invested in digital customer acquisition platforms like Roku and AppLovin, leading to over 0.5 million app downloads in the last quarter. To mitigate tariff impacts in the US, Vaibhav Global initiated a jewelry casting operation in the US, which will be operational by November 15th, with an investment of less than $0.5 million. This strategy aims to reduce tariff costs to below 5.5% and improve gross margins, providing a competitive advantage.

Profitability Drivers and Outlook

Profitability was boosted by operating leverage, the turnaround of Ideal World (now achieving low single-digit EBITDA margins and targeting double-digit within 2 years), and lower employee costs due to process automation and AI. The company maintains its FY26 revenue guidance of 7-9% and aims for mid-teen revenue growth with steady improvement in operating margins in the medium term, supported by efficient execution and a robust supply chain.

Sustainability and Shareholder Returns

Vaibhav Global continues its 'your purchase feeds...' program, having served its 106 millionth meal this quarter, currently providing about 55,000 meals every school day, and targeting 1 million meals per school day by FY40. The company also generated 1.2 million kilowatt hours of solar energy, meeting 100% of its manufacturing power needs, and aims for carbon neutrality by 2031. A second interim dividend of INR1.5 per equity share was declared, representing a 53% payout.

Market Share and Product Mix Evolution

The company has expanded its market share against Qurate from 3.1% to 4.6% over four years, operating in an addressable market of $30 billion where its current share is approximately 1.5%. Lab-grown diamonds now constitute 10.3% of total sales, up from 5.5% last year, contributing to higher Average Selling Prices (ASPs). Lifestyle products account for 36% of total sales, up from 12% in FY18, with a medium-term target of 50%.

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