Summary
D. P. Abhushan Limited - Q3 FY26 Earnings Call Summary Saturday, January 24, 2026, 4:00 PM IST
Event Participants
Executives 4 Anil Kataria (Whole-time Director), Manish Laddha (CFO), Vikas Kataria (Promoter)
Analysts 8 Anjali Singh, Chetan, Hari Sharma, Kushal Kasliwal, Lokesh, Paras Kakkar, Purab Agarwal, Risha Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,222.40 crores | +13% YoY, +26% QoQ; driven by festive/wedding demand despite gold price-led volume pressure. |
| Gold Volume | 924 kg | -29.8% YoY (vs 1,317 kg in Q3 FY25); impacted by elevated gold prices and consumer shift to lightweight. |
| Silver Revenue | ₹114 crores (9M) | +118% YoY; emerged as key growth driver due to gifting demand and relative affordability. |
| Diamond Revenue | ₹115 crores (9M) | ~4-5% of total revenue; strategic focus on exhibitions to drive higher-margin studded portfolio. |
| EBITDA | ₹105.60 crores | +89% YoY, +39% QoQ; driven by operating leverage and inventory gains. |
| EBITDA Margin | 8.64% | +350 bps YoY; expansion attributed to product mix shift and cost absorption. |
| PAT | ₹73.35 crores | +96% YoY, +43% QoQ; significant improvement due to higher realizations and inventory gains. |
| PAT Margin | 6.00% | +250 bps YoY; reflects consistent improvement in profitability metrics. |
| Customer Footfalls | 1,75,351 (9M) | Sustained purchase intent with a healthy 82% conversion ratio across 11 stores. |
Geographic & Segment Commentary
- Core Markets (MP & Rajasthan): Strong performance noted in Kota, Ujjain, Bhopal, and Udaipur. Flagship stores in Ratlam (88% conversion) and Indore continue to benefit from multi-decade brand trust and legacy.
- Gold & Silver Segment: Gold remains dominant at ₹2,494 crore (9M); however, Silver has surged to ₹114 crore revenue. Management noted a structural shift where Silver and Diamonds now combine for 10-12% of revenue versus ~7-8% previously.
- New Product Segments: Launched “Amoura” brand for lightweight jewellery across all stores. This segment targets price-sensitive consumers shifting from 22-carat to 18-carat and 14-carat options due to high gold prices.
Company-Specific & Strategic Commentary
- Store Expansion: Plans to add ~20 stores over the next 3 years (by FY29) focusing on Tier-2 and Tier-3 cities in MP, Gujarat, Rajasthan, and Maharashtra. A new store in Dhar, MP is expected within 2-3 months.
- Inventory Gains: Approximately ₹20 crores of the Q3 profit was attributable to inventory gains (roughly 25-28% of the margin improvement). Management views the remaining 70%+ improvement as structural due to mix and pricing discipline.
- Capital Raising: The Qualified Institutional Placement (QIP) process is ongoing to accelerate growth. While store expansion is currently funded via internal accruals, a successful QIP will significantly increase the pace of new store openings.
- Employee Incentives: Granted 62,300 ESOPs in November 2025 to align key personnel and long-serving staff with long-term value creation.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 25% - 30% for FY26 | Management expects a massive Q4 (targeting ~₹1,400 Cr) driven by high wedding density in Jan-Feb. |
| Future Growth | 10% - 15% SSSG | Sustainable long-term Same Store Sales Growth expected through product refreshes. |
| Operating Costs | 10% - 12% increase | Employee and other expenses expected to grow at a slower pace than Gross Profit, ensuring leverage. |
| Store Openings | 4-6 stores by Diwali 2026 | Accelerated expansion plan for the next fiscal year targeting surrounding geographies. |
Risks & Constraints
| Risk | Context |
|---|---|
| Gold Price Volatility | Elevated prices reduced Q3 gold volumes by nearly 30%; while inventory gains helped, a price correction could impact near-term absolute margins. |
| Geographic Concentration | Majority of revenue is currently generated from 11 stores in limited geographies; expansion into new Tier-3 towns faces execution and site-selection delays. |
| Hedging Exposure | Historically unhedged; the company has only recently initiated partial hedging through Gold Metal Loans (GML), leaving some exposure to price fluctuations. |
Q&A Highlights
Margin Sustainability
- Question: Is the margin expansion sustainable if gold prices stabilize? (Kushal Kasliwal)
- Answer: Yes, because the mix is shifting towards higher-margin items like Diamonds, Silver, and Polki. While inventory gains contributed ~25% to the rise, the rest is structural efficiency (Vikas Kataria).
Volume vs. Value
- Question: Why did gold volumes decline so sharply? (Sunil F.)
- Answer: Volumes dropped ~29% YoY for the nine-month period due to record high gold prices. However, value growth remained positive as consumers shifted to lightweight items with higher making charges (Vikas Kataria).
Q4 Execution
- Question: Can you achieve 25% annual growth given you need 100% growth in Q4? (Sunil F.)
- Answer: The Q4 wedding season is exceptionally strong this year, with 60% of annual wedding-related revenue often coming from these months. We believe ₹1,400 crores for the quarter is achievable (Vikas Kataria).
Store Economics
- Question: What is the capex and payback for new stores? (Anjali Singh)
- Answer: Capex is ₹2.5-3.0 crores for standard stores and ₹5-7 crores for large formats. Payback is exceptionally fast, typically within 9 months (Manish Laddha).
Key Takeaway
D. P. Abhushan delivered a record Q3 FY26, with PAT growing 96% YoY to ₹73.35 crores despite a 30% decline in gold volumes. The performance was characterized by significant margin expansion to 8.64%, fueled by ₹20 crores in inventory gains and a strategic pivot toward Silver (118% growth) and lightweight 18k/14k jewellery under the “Amoura” brand. Management has committed to an aggressive expansion phase, targeting 20 new stores by FY29 and a revenue growth of 25-30% for the full year FY26, predicated on a high-volume Q4 wedding season. While high gold prices remain a headwind for volumes, the company is mitigating risks through increased diamond/silver mix and the initiation of gold hedging. The ongoing QIP process remains a critical catalyst for accelerating this growth trajectory into FY27 and beyond.
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