Company Update : P N Gadgil Jewellers Ltd by Motilal Oswal Financial Services Ltd
Retail growth at 30%; miss in operating margin on high opex
Revenue
* PNGJ’s consolidated sales rose 9% YoY to INR21.8b (est. INR21.5b) in 2QFY26.
* The company has stopped HO Bullion accounting from 3QFY25 thereby reported numbers are not comparable and are lower than the underlying performance.
* Total revenue (ex-bullion) grew by 31% YoY.
* Retail segment (72% of revenue) grew 29% YoY to INR15.7b, reflecting stable store-level operations.
* SSSG is 29% QoQ.
* Company delivered 66% YoY increase in festive sales during Navratri, amounting to INR4.3bn.
* E-commerce revenue grew 113% YoY to INR1,435mn, now contributing 7% to total revenue.
* Franchisee operations saw 106% YoY growth to INR3.4bn, contributing 16% to total revenue.
* Company delivered 35% YoY growth on day of Akshaya Tritiya and record INR1,395m sales.
* The transaction count grew by 18% and ATV at INR90k
* The company recorded a 20% increase in footfalls, coupled with a strong 93% conversion rate.
* Company opened 8 stores during the quarter taking the store count to 63 stores.
Profitability
* Gross margin expanded by 420bp YoY to 11.9% (est. 12%)
* EBITDA margin expanded 130bp YoY to 4.9% (est. 5.8%)
* Employee expenses up 51% YoY and other expenses up 104% YoY.
* EBITDA grew by 49% YoY to INR1,071m.
* PAT grew by 50% YoY to INR793m. PAT margin came at 3.6% vs 2.6% in 2QFY25.
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