Summary
SHANTI GOLD International Ltd. - Q3 FY26 Earnings Call Summary Wednesday, February 11, 2026 12:00 P.M.
Event Participants
Executives 2 Mr. Pankajkumar Jagawat (Chairman and Managing Director), Mr. Shriram Iyengar (Chief Financial Officer)
Analysts 11 Ajit Sethi, Aniket Madhwani, Arup Dey, Bhaskar Kanrar, Charchit Maloo, Jeyaprakash, Kashish, Manish Jaiswal, Manoj Rajani, Nikita Mehta, Tejas Khandelwal
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue (Q3) | ₹636.93 crores | +110.06% YoY; driven by strong execution, growing scale, and increased transactions with organized retailers. |
| Revenue (9M) | ₹1,359.78 crores | +68.06% YoY; surpassed full-year FY25 revenues within nine months. |
| Sales Volume (Q3) | 535 kg | +31% YoY from 408 kg; supported by healthy festive demand and improved manufacturing throughput. |
| Sales Volume (9M) | 1,285 kg | +12% YoY; reflects positive ordering trends and successful rollout of new collections. |
| EBITDA (Q3) | ₹60.18 crores | +113.83% YoY; growth slightly outpaced revenue expansion. |
| EBITDA Margin (Q3) | 9.45% | +17 bps YoY; impact of new mass-market line (lower margin) offset by operating leverage. |
| EBITDA Margin (9M) | 11.71% | +422 bps YoY; significant expansion due to earlier unhedged gold price gains. |
| PAT (Q3) | ₹40.08 crores | +127.9% YoY; margins improved to 6.29% from 5.80% in Q3 FY25. |
| Debt-Equity Ratio | 0.3x | Management noted a comfortable leverage position with total debt at ₹225 crores. |
| Inventory Days | 45-60 days | Holding period remains steady at 1.5 to 2 months; inventory value stood at ₹387 crores. |
Geographic & Segment Commentary
- Domestic Market: Accounts for 96% of total revenue. The company has a presence across 15 states and 2 union territories, with a strategic focus on expanding from its South Indian stronghold into North and Western India.
- International Market: Currently contributes 4% of revenue. Management is opening a dedicated office in Dubai, UAE (operational by May 2026) to target Singapore, Malaysia, and Qatar, aiming to increase the export mix to 10% by FY27.
- Organized Retail: Major growth driver as large retailers outsource manufacturing. Key clients include Joyalukkas, Lalithaa Jewellery, Alukkas Enterprises, and Kalyan Jewellers.
Company-Specific & Strategic Commentary
- Capacity Expansion: Significant expansion of approximately 4,000 kg per annum is underway. New facilities in Marol (Mumbai) and Jaipur are expected to be operational by May and July 2026, respectively, bringing total capacity to nearly 7,900 kg.
- Product Diversification: Launched a new mass-market plain gold jewellery line to capture affordability-led demand. Planned entry into the culturally significant “Mangalsutra” category to broaden the bridal and festive portfolio.
- Design Capability: Maintains a strong in-house team of 71 CAD designers. This team is central to the strategy of providing “design-led” value-added jewellery to organized retail partners.
- Gold Hedging Strategy: Transitioning from taking price risk to a disciplined hedging model (using Gold Metal Loans - GML). Management intends to move most inventory to GML to stabilize margins and reduce volatility.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue Growth | 60% to 70% for FY27 | Driven by the commissioning of new 4,000 kg capacity and entry into North India. |
| Annual Revenue | ~₹2,000 crores for FY26 | Based on strong Q4 wedding season demand and January performance. |
| PAT Margin | ~4% (Sustainable) | Management expects margins to normalize to 4% as they shift fully to a hedged model and increase mass-market volumes. |
| Export Mix | 10% by FY27 | Supported by the new Dubai office and expansion in Singapore/Qatar markets. |
| Capacity Utilization | 75-80% for FY27 | Target for current facilities; new Jaipur/Mumbai units expected to add 800-1,000 kg in their first year. |
Risks & Constraints
| Risk | Context |
|---|---|
| Gold Price Volatility | While high prices improve realizations, they can moderate volumes. Management is mitigating this by shifting to a 100% hedged (GML) model. |
| Margin Dilution | The entry into mass-market segments and plain gold jewellery carries lower margins than bridal wear, potentially capping blended PAT margins at 4%. |
| Execution Risk | The company is adding ~150% incremental capacity. Success depends on the rapid ramp-up of the Jaipur and Mumbai facilities and the onboarding of new artisans. |
Q&A Highlights
Margin Sustainability & New Products
- Question: Why did margins dip sequentially despite high volumes? (Aniket Madhwani)
- Answer: The dip was due to partial gold hedging and the introduction of a new mass-market jewellery line with higher churn but lower margins. (Pankajkumar Jagawat)
Capacity & Volume Growth
- Question: What is the timeline and volume expectation for the 4,000 kg expansion? (Aniket Madhwani)
- Answer: The new capacity should be live by May 2026. We expect 60%-70% annual volume growth in FY27, targeting an additional 800-1,000 kg from the new units. (Pankajkumar Jagawat)
Inventory Gains vs. Core Margins
- Question: Was the strong nine-month performance purely due to inventory gains? (Arup Dey)
- Answer: While Q2/Q3 saw gains because IPO proceeds were used to buy gold at lower prices during a rally, the core business is sustainable at a 4% PAT margin under a hedged model. (Pankajkumar Jagawat)
Conflict of Interest / Related Entities
- Question: How does this company differentiate from the other listed promoter entity (Utssav CZ)? (Nitin Shah / Tejas Khandelwal)
- Answer: The entities have different business natures (mass production vs. MRP-based pieces) and separate professional management teams. Shanti Gold focuses on B2B manufacturing for organized retail. (Pankajkumar Jagawat)
Key Takeaway
Shanti Gold International delivered a record performance in 9M FY26, with revenue growing 68% YoY to ₹1,359.78 crores, already surpassing FY25 totals. The quarter was characterized by a 31% surge in sales volumes (535 kg) as organized retailers increasingly outsource manufacturing to high-scale partners. Strategically, the company is pivoting toward a fully hedged Gold Metal Loan (GML) model to eliminate price risk, which will likely stabilize PAT margins at approximately 4%. A massive 4,000 kg capacity expansion is slated for completion by mid-2026, supporting a robust revenue guidance of 60-70% growth for FY27. While the introduction of mass-market products may lower blended margins, the aggressive expansion into North India and the Dubai-based export market (targeting 10% mix) positions the company to capture the ongoing formalization of the Indian jewellery sector. Forward momentum depends on the successful integration of the Jaipur and Mumbai facilities by Q2 FY27.
Want more insights like this?
Subscribe to get deep dives delivered to your inbox.
More Earnings Summaries
Explore more Q3 FY26 earnings call analyses: