D. P. Abhushan Limited (DPABHUSHAN) Earnings Call Transcript
January 24, 2026
Earnings Call Speaker Segments
Ladies and gentlemen, good day, and welcome to D. P. Abhushan Limited Q3 FY '26 Earnings Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ajit Mishra from Ernst & Young. Thank you, and over to you, sir.
Thank you. Good afternoon to all the participants on this call. I am Ajit Mishra from Ernst & Young Investor Relations. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risk that could cause future results, performance or achievement to differ significantly from what is expressed or implied by such forward-looking statements. Please note that we have mailed the press release results and the same are available on the exchange and company website. In case if you have not received the same, you can write to us, and we'll be happy to send that back to you. To take us through the results and answer your questions today, we have the top management of D. P. Abhushan Limited represented by Anil Kataria, Whole-Time Director; Vikas Kataria, Promoter; and Mr. Manish Laddha, Chief Financial Officer. We will start the call with an opening remark on the company performance for the third quarter and 9 months ended, and then we'll conduct a question-and-answer session. With that said, I will now hand over the call to Anil, sir. Over to you, sir. Thank you.
Good afternoon, everyone quarter 3 FY '26 earnings call [Foreign Language]
Good afternoon everyone. Gold continued to remain the dominant category with revenue of INR 2,494 crores -- INR 2,494 crores in 9 months financial year '26, reflecting steady growth despite price lead, volume moderation, wedding demand, along with positive festival momentum during October and November, [indiscernible] overall revenue growth. Silver emerged as a key growth driver with revenue rising sharply to INR 114 crores, up by 118% year-on-year, supported by festive gifting demand and its relative affordability. Revenue from diamonds stood at INR 115 crores. Customers with committed events, particularly wedding continue to purchase actively while investment oriented. Customers remain engaged through our saving and accumulation scheme. From an operating standpoint, customer walk-ins over the 9-month period stood at 175,350 with a healthy overall conversion ratio of 82%, indicating sustained purchase intent despite elevated price. We observed encouraging traction across multiple markets on a 9-month basis, particularly in Kota, Ujjain, Bhopal and Udaipur. Our flagship locations such as Ratlam and Indore continue to attract strong customer footfall and stable footfall conversion ratio. With a strategic focus on strengthening our aesthetic jewelry portfolio, which continued to offer relatively higher margins, the company undertook select brand building initiatives during the quarter to deepen customer engagement and enhance market presence. This includes the World of Diamond exhibition held in Ajmer from 13th to 26th November aimed at improving customer interaction and visibility of diamond jewelry as well as the Diamond Polki Festival organizing Banswara and Bhilwara to showcase curated diamond and polki jewelry collection. Overall, this initiative supported brand visibility and customer outreach across key markets. Looking ahead, we remain confident in the strength of our brand product portfolio and calibrated expansion plan to drive sustainable growth over the medium to long term. With that said, I would now like to hand over to Mr. Manish Laddha for a detailed financial overview. Thank you.
Thank you, Vikas. Good afternoon. Now let me walk you all through the financial performance of quarter 3 financial '26 and the 9 months ended financial year '26. During quarter 3 FY '26, revenue from operations stood at INR 122.4 crores, registering a sequential growth of 26% and a year-on-year increase by 13%, driven by seasonal wedding and festival demand in October and November, especially, while higher gold prices continue to weigh on volumes. EBITDA for the quarter was INR 105 crores, up 39%, continued to quarter-on-quarter and 89% year-on-year with the EBITDA margin expanding to 8.64%, reflecting the operating leverage and the better cost absorption. Profit after tax came INR 73.35 crores, marking a 43% quarter-on-quarter and 96% year-on-year growth with the PAT margin improving to 6%. On a 9-month basis, revenue from operations stood INR 2,731 crores, reflecting a 5% year-on-year growth. EBITDA for 9 months was INR 236 crores, up 79% year-on-year with the margin expanding by 357 basis points to 8.67%. PAT for the period stood at INR 161.24 crores, an increase of 84% year-on-year with the PAT margin improving to 5.90. Overall, the performance reflects continued improvement in the profitability metrics, driven by margin expansion and the operating efficiencies. Separately, on 4th of November, the company granted 62,300 stock options under the ESOP scheme, of which 1,200 options were forfeited on 17th of December 2025. The necessary accounting treatment has been carried out in accordance with Ind AS 102. The ESOPs have been allocated not only to the key managerial and senior personnel, but also a long-serving employees, who have contributed meaningfully to the company's growth. This initiative reflects the company's continued focus on the employee engagement program, ownership and alignment with the long-term value creation. With that, now I would like to open the floor for question-and-answer session. Thank you.
[Operator Instructions] The first question is from the line of from Chetan from Systematix Group.
Sir, can you please highlight how has the festive demand been compared to last year in our core markets? And any noticeable change in the consumer behavior or say, buying mix during the festive and weddings?
Thank you, Chetan, for asking the question. The consumer demand during the festival, we see it's good, very good. So [Foreign Language] I think people are very excited to buy the gold jewelery and it is because the gold prices continue rising [Foreign Language]. We are trying to introduce a 9-carat as well [Foreign Language].
[Foreign Language].
[Foreign Language].
The next question is from the line of Kushal Kasliwal from InVed Research.
[Foreign Language] 3 quarters, margins are increasing. And if I look at FY '24 or some part of calendar year '24, they are more than double, in some cases, almost double. So [Foreign Language] what have we changed that we are now doing a very high -- significantly higher margins. Margins are also due to gold prices because [Foreign Language].
Thank you for asking and very good question [Foreign Language]
[Foreign Language]
[Foreign Language] 30% -- around 25% to 30% price increases [Foreign Language] inventory gains [Foreign Language] 70% remaining [Foreign Language] from a permanent like by 4% margin to 8%, 9%, 10% margin [Foreign Language] .What is the remaining 70% mix of this margin increase.
[Foreign Language] this is the one thing plus [Foreign Language].
[Foreign Language].
[Foreign Language]
And sir silver and diamond is how much percentage of our sales.
Silver and diamond, I think silver in quarter 3 [Foreign Language] 10%, 12% silver and diamond percentage [Foreign Language].
Okay. And earlier, it was very low, [Foreign Language]
[indiscernible]
Okay. Okay. [Foreign Language]
Yes, margin is sustainable.
The margin is sustainable, inventory maybe not [Foreign Language]
The next question is from the line of Lokesh from LK Investments.
Sir, [Foreign Language] out of this INR 73 crores [Foreign Language]
[Foreign Language] INR 20 crores is the inventory gain.
INR 20 crores [Foreign Language] 11 stores [Foreign Language] April 2025. So it's been like 9 months, and we haven't opened any more stores, so [Foreign Language].
[Foreign Language] Coming next year, we have a plan to open another like 4, 5 stores.
Sir, current weighted average cost [Foreign Language] gold.
Current weighted average price is somewhere around like INR 1,10,000 lakh.
INR 1,10,000. And sir, 1 more last question is [Foreign Language]
Yes. So [Foreign Language]
[Foreign Language]
Definitely, we'll share with you [Foreign Language] we'll share with you.
Next question is from the line of Purab Agarwal, an individual investor.
Congratulations on a good set of numbers. Just wanted to know what would be our SSSG for this quarter? And how do we see it going forward for the full year FY '26 as well as for FY '27 going forward?
So our SSSG growth for this quarter is like around 20% to 25% overall.
Okay. Is that SSG or is that revenue growth, yes?
Revenue growth.
Okay. Okay. Okay. And how do we expect this going forward?
So around like the 10% to 15%, we are like expecting. 10% to 15% we are expecting continuously growing.
Okay. Okay. Okay. Understood. And I think my question might have been repeated, but how do we see our margins going forward given the gold prices -- if the gold prices stabilize, and we don't see much increase in gold prices. So will we see a margin expansion from here? Or will we see a margin correction?
No, no margin expansion, we are seeing the margin expansion. If the gold price is stable, gold price is down, because we are introducing the more category, and we are like the more focus on the lower credit [indiscernible] and new products where we can increase our margin. And silver, diamond, polki, where we can get more margin. So we are -- continuously our focus is to increase our margin.
The next question is from the line of Paras Kakkar from AB Capital.
Congratulations on a very good set of numbers. My question is what is your outlook on growth, let's say, for the next 1 or 2 years? Because the revenue that we have seen is increasing, but it's also in line around INR 3,300 crores, INR 3,400 crores like the last year. So do we expect growth this year and the next year on the revenue front?
Yes. So we expect growth, both the year and like in the further more year through the SSG growth and to open a new store. So maybe this year, we are growing by like 25% to 30%. And again, next year, again, on the same pace we are growing. And continuously, this percentage of growth will be remain same minimum, and we are trying to open more stores. So maybe it will be increased more.
Okay. And do we also expect the margins to sustain with increased revenue?
Yes, yes, definitely. In the payment, it will be increased.
The next question is from the line of Vijay Chauhan from RHPMS.
So my first question is basically the clarification of 1 of the participants has asked. So [Foreign Language] so if I look at the gross profit in the PPT, it's up from INR 85 crores to INR 137 crores. It's somewhere around 57%, 58%. But other expenses, it used to be somewhere around INR 28 crores Q3 FY '25 and currently, we're at INR 31 crores, INR 32 crores. It's a jump of 10% or 11%. So is it fair understanding like this is purely basically the operating leverage, which has led to the increase in the EBITDA margin. Is understanding correct?
Sorry, come again?
So [Foreign Language] employee benefit expense or other expense, which is combining INR 32 crores. okay? So last year, somewhere around INR 28 crores, INR 29 crores. So [Foreign Language] other expenses 10%, 11%, but gross profit around 57%, 58%. So [Foreign Language] EBITDA margin expand basically from 5% to 8.7%. So my -- so is my understanding correct, that is the whole reason for the margin expansion because we are getting operating leverage.
So actually, you see what happened that last year, eventually, we opened 3 showroom. So that cost also added in that expense, number one. Number two, definitely, inventory gain is also playing a very important role because of the heavy gold prices. So these 2 components are actually adding to the gross margin as well as in the net margin of the EBITDA level.
Right. [Foreign Language] so INR 20 crores was the inventory gain. So even if I remove the inventory gain from INR 137 crores, which is gross profit, and it comes to INR 117 crores so it is still showing growth of 36%. So if we see the similar price increase going ahead, and we are charging a percentage of the -- basically the making charges as a percentage of gold, so the more our gross profit increase, maybe 30% even for the next year. So you continue to see the expansion of the EBITDA margin because our other expenses or the employee benefits are not going to grow at the speed of 30%. So is that understanding correct?
Yes. Yes. Obviously, the moment the gold prices, the same pattern will follow 100% the inventory gain is going to come in the books, at least for the next couple of quarters, the same momentum we will see in the numbers also. And simultaneously, definitely, the new showrooms are coming. So the expense will also gradually increase. But nevertheless, compared to that, the profitability is going to increase drastically.
Right. [Foreign Language] employee benefit expense , other expenses typically [Foreign Language] year-over-year, 10%, 15% band if you can suggest?
Yes. So overall, like 10% to 12% is the -- this is the band, actually.
Okay. Okay. So 10%, 12%. So [Foreign Language] 20%, 25%, we'll continue to see the operating leverage.
Yes.
Now my question is on the demand side. So how we have seen the transition in the -- basically the H2, Q3 is strong as you highlighted, but how the Q4 is spanning out because there are higher number of weddings. So what's your general observation so that we get the idea of like what's happening on the ground? Because now a little bit, again, high has been made because of various geopolitical issue on the gold side. So how are you seeing the demand?
So the demand of the Q4 is very good. The wedding season started and a lot of wedding during this month of January, February. And I think that after 30th January, there are a lot of weddings. So [Foreign Language] and gold prices is continuously rising. So we can see a very good demand in particularly this quarter, especially the 3 months, January, February and March. I think, yes, we are closing very good numbers this year.
Right. And [Foreign Language] estimate, if you would like to share regarding the gold price, general like question, like how do you see the gold price maybe in FY '27? Do you have some internal estimate or something?
FY '27, maybe -- the gold price is continuously rising. [Foreign Language] $5,000 gold price, [Foreign Language] $6,000, $6,500, maybe it will touch and then [Foreign Language] we are expecting huge volume growth in the business.
That's fine. That's fine. What's our store expansion plan for maybe next 2, 3 years?
I can say 1 thing overall long term gold price will increase like -- with the 9%, 10% of like CAGR, so [Foreign Language]
Yes, yes, definitely. Even like a lot of countries central banks are also shifting towards from -- moving from treasuries to gold...
[indiscernible] by currency.
Yes, yes, definitely. [Foreign Language] store expansion guidance if you would like to give maybe for next 2, 3 years?
So yes, next 2, 3 years, we have plan to open another 20 stores, 20 more stores [Foreign Language] by the end of the '29 [Foreign Language]
[Operator Instructions] The next question is from the line of Anjali Singh from Bansal Family Office.
So my first question is, what is the average CapEx and payback period per store currently?
So in general, it depends on the store size, the CapEx remains between INR 2.5 crore to INR 3 crore for the decent size of 3,000 to 5,000 square feet and for the 8,000 to 10,000 square feet, it remains between the INR 5 crore to INR 7 crore. It is the past trend, which we have observed. And the same is going to continue, except the inflation, which comes like 5% to 7% every year. And so far as payback period is concerned, I think what our past experience is saying that within a period of 9 months, in general, we get all our CapEx recovered.
Okay. Sir, also second question is Ratlam shows the highest conversion at 88%. So what best practices from flagship stores can be replicated across other regions.
So Ratlam is our flagship store, and it's a legacy of more than 85 years and especially Ratlam store [Foreign Language] footfall to conversion is higher as compared to [indiscernible].
The next question is from the line of Sunil F from Sunil Investments.
[Foreign Language]
So volume this quarter 3 is 924 kilos in gold and what else you asked?
[Foreign Language] 924 kilograms. [Foreign Language]
[Foreign Language] in gold.
[Foreign Language]
Same period [Foreign Language] 1,317 kg and [indiscernible] 3,297 kg.
3,297 [Foreign Language]
Yes. Around 29%.
Okay sir [Foreign Language]
[Foreign Language]
[Foreign Language]
[Foreign Language] wedding season is there, so [Foreign Language] we can achieve this.
[Foreign Language]
[Foreign Language] 60% is our wedding season. So [Foreign Language] we can say number achievable.
[Foreign Language]
Definitely.
[Operator Instructions] The next question is from the line of Risha Shah, an individual investor.
So my first question is, how has elevated gold pricing alter customer behavior in terms of ticket size, purity preference and product selection?
So how -- gold price is like shifted the consumer preference. So [Foreign Language]
Okay sir. So my next question is there appears to be a growing industry interest in 18-carat and 14-carat jewelry. Is this trend visible across our key geographies?
Yes, definitely. [Foreign Language]
[Operator Instructions] The next question is from the line of Lokesh from LK Investments.
Sir, [Foreign Language]
QIP is in the process [Foreign Language]
Sir, [Foreign Language]
Definitely.
Okay. And sir, one more thing [Foreign Language]
[Foreign Language] so now we started [Foreign Language]
Okay. And sir, 1 more thing [Foreign Language] if I'm right?
Yes.
[Foreign Language] same store growth, 20%, 25% [Foreign Language]
Few stores has good growth, [Foreign Language] overall growth is at 13%, definitely. [Foreign Language]
The next question is from the line of Hari Sharma, an individual investor.
My question was also with respect to the QIP investment because in the last quarter, it was mentioned that we are on the final discussion and the outcome shall be communicated shortly, but it was not communicated, so I wanted to ask on that aspect. And secondly, whether the delay in store opening is linked to somewhere with the QIP offer?
Not exactly [Foreign Language] already, we have finalized 2 locations. So [Foreign Language] store opening is [Foreign Language] plus yes, definitely, [Foreign Language] next, before Akshaya Tritiya, we are planning [Foreign Language] and continuously in [Foreign Language]
Thank you. As there are no questions from the participants, I now hand the conference over to the management for closing comments. Thank you, and over to the management. Sir, we are unable to hear you.
Thank you, everyone, for your thoughtful questions and active participation in today's earnings call. As we conclude today's call, we would like to reiterate our focus on strengthening our operation and continue to build the business in a disciplined manner. We remain committed to serving our customers with consistency and maintaining the trust of all our stakeholders. We would like to thank our employees for their continued efforts and our investors and partners for their ongoing support. Thank you for joining us today. We look forward to engaging with you again in the coming quarter. Should you have any further queries, please feel free to reach out the EY Investor Relations team. Thank you.
Thank you very much. On behalf of D. P. Abhushan Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.
Thanks.
Thank you.
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