Summary
P N Gadgil Jewellers Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 10, 2026, 03:00 P.M. IST
Event Participants
Executives 2 Deepak Vijay (CFO), Saurabh Gadgil (Chairman and Managing Director)
Analysts 10 Aman (Investor), Anukool (Inved), Dinesh Kulkarni (Finsight), Gaurav Shukla (Finvestors), Gunit Singh (Counter Cyclical PMS), Nitin Jain (Fairvalue), Priyanshu Jain (Growth X Infinity), Pulkit (Dalmus Capital Management), Subhanu (3 Head Capital), Yash (Edelweiss Public)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Consolidated Revenue | ₹3,302 crores | +35.6% YoY; Driven by strong festive momentum and new store additions. |
| Gross Profit | ₹474 crores | +98.2% YoY; Jump attributed to discontinuation of zero-margin refinery business and higher studded mix. |
| Gross Margin | 14.4% | +460 bps YoY; Supported by higher-margin Litestyle stores and studded jewellery (8.4% mix). |
| EBITDA | ₹271.7 crores | +109.4% YoY; Margin expanded to 8.2% due to operational efficiencies and festive scale. |
| Net Profit (PAT) | ₹170.9 crores | +98.6% YoY; PAT margin at 5.2% for the quarter. |
| Gold Volume Growth | +25% QoQ | Reported as +25% vs Q2 FY26; YoY gold volumes remained roughly flat/single-digit. |
| Transaction Volume | 35% growth | Positive consumer sentiment despite gold prices rising 70% YoY. |
| Avg Transaction Value | ₹1,03,065 | Reflects resilient demand in mid-to-high ticket wedding and festive segments. |
| Same Store Sales Growth | 33% | Robust performance across established stores in Maharashtra and new geographies. |
| Store Count | 66 stores | Net addition of 3 stores in Q3; Entry into Patna, Bihar marked regional expansion. |
Geographic & Segment Commentary
- Maharashtra: Remained the core market with high SSSG and footfalls; strategic focus shifting toward launching Litestyle stores in Tier-1 cities like Mumbai, Pune, and Nagpur to capture youth demand.
- Central & North India (UP/Bihar/MP): Reported higher preference for fancy and studded jewellery compared to Maharashtra; Lucknow and Kanpur stores exceeded footfall expectations.
- E-Commerce: Revenue grew 125.8% YoY to ₹377.4 crores; primarily driven by investment demand (bullion) but also serving as an omni-channel browsing tool for offline sales.
- Franchise: Revenue rose 65.4% YoY to ₹864.8 crores; management plans to accelerate FOCO (Franchise-Owned Company-Operated) expansion in states outside Maharashtra in FY27.
Company-Specific & Strategic Commentary
- Studded Ratio Improvement: Studded mix reached 8.4% (approx. 10% including Kundan/Polki); management targeting 13-14% over 3-4 years to drive margin expansion.
- Litestyle by PNG: Launched as a lightweight, high-fashion sub-brand targeting “own-occasion” buying; currently 5-6% of revenue with a target to reach 10%.
- Refinery Business Exit: Completely discontinued the zero-margin refinery business, which structurally re-rated gross and EBITDA margins compared to the previous year.
- Brand Outreach: Appointed Ranbir Kapoor as Co-Brand Ambassador and Sara Tendulkar for Litestyle to strengthen connection with younger consumers and national markets.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Store Count | 78-80 stores by March 2026 | Plans to add 11-12 stores in Q4 FY26 across Maharashtra and Central India. |
| FY26 Revenue | ~₹10,000 crores | Revised upward from previous guidance of ₹9,000-9,500 crores due to strong momentum. |
| FY27 Revenue | ₹11,500 - ₹12,000 crores | Assumes 20-25% growth driven by 25 new store additions (50% PNG, 50% Litestyle). |
| Sustainable Margins | 7% EBITDA / 4% PAT | Management views Q3 levels as seasonally high; 4% PAT is the long-term sustainable floor. |
Risks & Constraints
| Risk | Context |
|---|---|
| Gold Price Volatility | Gold prices rose 70% YoY; while the company is 100% hedged on price, sustained high prices could lead to volume resistance. |
| Geographic Concentration | Majority of stores are still in Maharashtra; expansion into UP/Bihar involves higher marketing spend (1.5% of turnover) and 18-24 month gestation. |
| Regulatory (Shareholding) | Promoter holding is above 75%; company must dilute stake within three years to meet SEBI norms, with QIP being one considered route. |
Q&A Highlights
Margin Drivers
- Question: What drove the sharp jump in gross margins to 14.4%? (Pulkit, Dalmus Capital)
- Answer: Primarily the exit from the zero-margin refinery business, a 52% value growth in studded jewellery, and the rollout of high-margin Litestyle stores (Saurabh Gadgil).
Expansion Strategy
- Question: Why is the FY27 revenue guidance only 20% despite adding 25 stores? (Nitin Jain, Fairvalue)
- Answer: The mix includes small-format Litestyle stores (₹10cr inventory) alongside large PNG stores (₹55-60cr inventory), tempering the total revenue contribution per new door (Saurabh Gadgil).
Inventory & Hedging
- Question: Are you perfectly hedged against gold price gains? (Pulkit, Dalmus Capital)
- Answer: We are 100% effectively hedged through GML, F&O, and old gold (30% mix); silver is the only unhedged portion but it is immaterial (Saurabh Gadgil).
UP/Bihar Performance
- Question: How is the response in new northern markets? (Pulkit, Dalmus Capital)
- Answer: Footfalls in Lucknow and Kanpur exceeded expectations; the mix is more inclined towards high-margin fancy and studded jewellery than Maharashtra (Saurabh Gadgil).
Key Takeaway
P N Gadgil Jewellers delivered a robust Q3 FY26, with revenue growing 35.6% YoY to ₹3,302 crores and PAT surging 98.6% to ₹170.9 crores. The quarter was characterized by a structural margin shift, with EBITDA margins reaching 8.2%, aided by the strategic exit from the zero-margin refinery business and a 52% value increase in studded jewellery. The company successfully entered Bihar and continued its expansion in UP, supported by new brand ambassadors Ranbir Kapoor and Sara Tendulkar. Management raised the FY26 revenue outlook to approximately ₹10,000 crores and guided for 25 new store openings in FY27, maintaining a target of 105 stores by March 2027. Key watch points include the successful scale-up of the lightweight “Litestyle” brand and the stabilization of gold volumes amidst high prices, though the company remains confident in sustaining a 4% PAT margin through a higher studded mix and geographic diversification.
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