Vaibhav Global

Vaibhav Global delivered a strong Q4 FY26 with consolidated revenue of INR935 crores, marking a 10% year-on-year growth. Profit before tax (PBT) saw a significant 41% year-on-year increase, reaching INR64 crores. For the full fiscal year 2026, consolidated revenue stood at INR3,691 crores, with the EBITDA margin expanding by 140 basis points to 10.8%. The company also achieved its highest ever free cash flow of INR272 crores, alongside an operating cash flow of INR305 crores, reflecting robust financial health.

The company's strategic investments in digital capabilities and AI are yielding results. Digital contribution reached 44% of B2C sales for FY26, and the company is on track to achieve a 50% digital mix by the end of FY27. Lab-grown diamonds now contribute 11% of retail revenue, with an average selling price of around USD 250, supporting gross margins. AI adoption has been expanded across customer engagement, marketing optimization, analytics, content creation, merchandising, and operational workflows, improving productivity and scalability.

In Q4 FY26, the U.S. grew by 1% and Germany by 7% in local currency terms, while the U.K. degrew by 1%. A significant milestone was Germany achieving EBITDA breakeven for the full year FY26, a faster turnaround than previously experienced in other markets. Germany is now expected to contribute positively to group profitability from FY27 onwards. The company maintains its 4 'R' priorities: reach, new customer registration, retention, and repeat purchases.

A key achievement was the in-house brand contribution crossing 50% of B2C sales, a year ahead of the initial target. This strengthens customer engagement, improves sourcing efficiencies, and lifts gross margins. Lifestyle products currently contribute around 35% of total sales, with a medium-term target to reach 50%. This shift in product mix, along with the growth of lab-grown diamonds, is expected to further enhance profitability.

The Board recommended a final dividend of INR1.5 per equity share, bringing the total payout for FY26 to INR6 per share, including interim dividends. This represents a payout ratio of approximately 37% of the free cash flow, demonstrating a commitment to consistent shareholder returns. The company also reported a net cash position of INR296 crores as of March 31, 2026, indicating a strong liquidity position.

Despite challenges like spiked precious metal prices and tariff-related uncertainty, gross margins remained healthy, supported by vertical integrated sourcing and in-house brand traction. The company expects an improvement in EBITDA margin of 50 to 100 basis points in FY27. Operating leverage is expected to come from HR and SG&A efficiencies, as well as technology development and AI initiatives. Employee cost efficiencies improved through process optimization and increased use of AI tools.

The Mindful Souls digital-first acquisition continued its steady performance with strong gross margins. However, the company took a write-off of approximately INR25 crores related to Mindful Souls. This was attributed to conservative impairment testing, as the initial forecast for investment recovery within 5 years has been extended to 7 years due to slower conversion. Management believes the business is still good and provides valuable cross-learning benefits across the group.