Summary
Sky Gold and Diamonds Limited - Q3 FY 2026 Earnings Call Summary Tuesday, February 10, 2026 12:00 PM
Event Participants
Executives 3 Akash Talesara (President, Sales and Business Development), Mangesh Chauhan (Managing Director), Siddharth Sipani (Chief Financial Officer)
Analysts 5 Anushka Vora (Vimana Capital), Bharat Gianani (MC Pro Research), Deep Shah (Equirus Securities), Palash Kawale (Nuvama Wealth), Raj Sarraf (Finvestors), Smith Gala (RSPN Ventures)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Revenue | ₹1,500 - ₹1,600 crores (est) | Management guided for ₹6,100 crores for FY26; Q3 reflects steady progress toward this goal. |
| PAT | ₹66 - ₹70 crores (est) | On track for ₹225 crore FY26 guidance; ₹190 crores achieved in 9M FY26. |
| PAT Margin | 4.40% | +230 bps since FY24 due to gold loss reduction and mix shift; 4.25%+ guided for FY27. |
| Gross Margin | 8.27% | +230 bps vs FY24 (5.97%); driven by 100 bps gold loss reduction and 60 bps from advanced gold. |
| Volume (Monthly) | 631 kgs | Average monthly run rate for Q3 FY26; targeting 750 kgs average for FY27. |
| Working Capital | 63 days | Improved from 66 days in Sep-25; targeting <60 days by FY26 end. |
| Advanced Gold Rev | ₹11 crores | Represents making charges from the 12% of total volume under the job-work model. |
| Debt Status | Net Debt | Company targeting net debt-free status by FY2030 through internal cash generation. |
Geographic & Segment Commentary
- Domestic (India): Remains the core market accounting for 80%-85% of revenue. Focus is on increasing wallet share with corporate giants like Malabar, Kalyan, and Reliance while expanding a regional distributor network for mom-and-pop stores.
- Middle East & GCC: Recently onboarded Damas (GCC-wide) and opened a Dubai Gold Souk office. The segment focuses on 21kT designs and currently contributes ~10%-13% of revenue with a target of 15%-20%.
- Value-Added Products: Contribution surged to over 50% of revenue from 5% three years ago. Growth is driven by 18kT, 9kT, and 14kT categories, alongside lab-grown and natural diamond-studded jewelry.
Company-Specific & Strategic Commentary
- Sky Gold 3.0: Strategic shift toward “lean growth” funded entirely by internal accruals. The company targets ₹18,000–₹19,000 crores revenue and ₹945 crores PAT by FY2030 with a 30%-35% CAGR.
- Manufacturing Excellence: Reduced gold losses from 1.5% to 0.5% through technology and ERP implementation. Use of 3D printing and direct casting has made jewelry 20%-30% lighter to combat high gold prices.
- Corporate Governance: Appointing a global audit firm effective Q1 FY27. Promoters have committed to a “Zero Salary” model starting FY27, drawing income exclusively through dividends linked to operating cash flows.
- Distribution Expansion: Established a sales office in Thrissur to penetrate South India. Launched a digital app now contributing 7%-8% of orders, aimed at automating the design selection process for retailers.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Revenue | ₹8,100 crores (FY27) | Based on 30-35% CAGR and projected gold price of ₹1.05-1.10L/10g. |
| PAT Margin | 4.25% - 5.20%+ | Expected to reach 5.2% by FY30 as interest costs (1.2% of sales) drop to zero. |
| Cash Flow | OCF/PAT: 20% (FY30) | Focus shifts from external capital to generating robust free cash flow and deleveraging. |
| Debt | Net Debt Free (FY30) | No further equity dilution planned; growth to be funded via internal accruals. |
Risks & Constraints
| Risk | Context |
|---|---|
| Gold Price Volatility | While back-to-back hedged, sharp price spikes dampen consumer demand and increase working capital needs for unorganized competitors. |
| GML Technicalities | Slow transition to Gold Metal Loans (GML) due to banking limit constraints and 2-3 day delays in raw material availability compared to spot markets. |
| Execution Risk (Global) | Entry into US/EU markets is delayed by 1-1.5 years as the company currently lacks the specific design/quality standards required for Western consumers. |
Q&A Highlights
Domestic Demand & Gold Prices
- Question: How are retailers behaving during current gold price fluctuations? (Deep Shah)
- Answer: Consumers are shifting to 18kT and 9kT to maintain budgets. 80% of our inventory is priced below ₹1 lakh. While high-end jewelry (Kundan/Polki) is hit, our lightweight segment remains resilient. (Mangesh Chauhan)
Working Capital & Cash Flow
- Question: What is the roadmap for cash flow positivity? (Anushka Vora)
- Answer: We improved working capital to 63 days in December. We aim to be cash-flow neutral by March 2026 and positive in FY27 as advanced gold and export segments expand. (Siddharth Sipani)
Advanced Gold & Corporate Clients
- Question: Is Tanishq on board as a client? (Raj Sarraf)
- Answer: Yes, we recently onboarded Titan/Tanishq via our subsidiary, Starmangalsutra, and are currently processing ~50 kgs per month under the advanced gold/job-work model. (Mangesh Chauhan)
Vision 2030 Strategy
- Question: Why cap growth at 30-35% when the opportunity is larger? (Palash Kawale)
- Answer: We could grow twice as fast, but we wouldn’t generate operating cash flow. Our priority is becoming net debt-free by 2030 through disciplined, self-funded growth. (Mangesh Chauhan)
Key Takeaway
Sky Gold and Diamonds Limited delivered a robust performance in Q3 FY26, reaching a monthly volume run rate of 631 kgs and reporting 9M FY26 PAT of ₹190 crores against a full-year target of ₹225 crores. The company is successfully executing its “Sky Gold 3.0” strategy, characterized by a shift toward value-added products (50%+ of revenue) and the “Advanced Gold” job-work model, which improved gross margins to 8.27%. Strategically, the firm is prioritizing financial discipline, aiming to be net debt-free by FY2030 with a 20% OCF-to-PAT conversion. Management is reinforcing corporate governance by hiring a global auditor and moving promoters to a dividend-only compensation model starting FY27. Looking ahead, the company is targeting ₹8,100 crores in revenue for FY27, supported by a growing corporate client base including Tanishq and Damas, while maintaining a watchful eye on gold price volatility and its impact on consumer footfall.
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