KHAZANCHIJEWELLERS Q2 FY26 earnings call.
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Revenue
₹548.92 Cr
verification pending
Revenue YoY
46.25%
reported change
EBITDA
₹32.62 Cr
latest reported figure
Source
bse pending
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Khazanchi Jewellers delivered exceptional Q2 FY26 with revenue of ₹548.92 crore (+46.25% YoY) and EBITDA of ₹32.62 crore (+112.86% YoY), driven by favorable product mix shift away from low-margin bullion toward ornament sales. EBITDA margins expanded 186 basis points to 5.94% reflecting strong operating leverage. The 90-95% B2B-heavy model (bullion contributing ~25% of volume at 1-1.5% margins vs. ornaments at 4.5-5% and retail at 9-10%) drove profitability. Key strategic catalyst is the 10,000 ft² flagship showroom at Showroom Cross, Chennai (puja December 12, 2025; launch mid-January 2026) targeting ₹550-600 crore annual revenue with 12-13% retail margins. Diamond brand Vajra (natural diamonds, 10-12% B2B margins, 16-18% retail) aims for 5-10% of mix in 2-3 years. Management guided FY26 revenue of 2,000+ crore and targets B2C contribution rising to 20-25% by FY27. Risk: Volume growth of 11% was flattish in real terms given ~doubling of gold prices since 2023, and higher inventory investment (~₹150 crore for new store) increases working capital pressure in a volatile gold price environment.
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Guidance to track
- Management guided achieving 2,000+ crore in total revenue for FY26, driven by H2 festive seasons, wedding demand in South India, and the new showroom contribution starting January 2026.
- Current retail segment operates at 9-10% margins. With the new showroom carrying premium collections (kundan, jadau, polki, diamond) and high-margin gemstone jewelry, management targets 12-13% retail margins as B2C mix improves to 20-25%.
- Starting FY26 with single-digit B2C contribution (~10%), management targets reaching 20-25% B2C revenue mix by FY27 as the new 10,000 ft² showroom scales up, improving blended margins structurally.
- The 10,000 ft² Chennai flagship (opening mid-January 2026) with ₹150 crore initial inventory investment is expected to generate ₹550-600 crore annual revenue, contributing meaningfully to both top line growth and profitability.
Risks flagged
- Gold prices have nearly doubled from 2023 levels, causing a 2-2.5 month demand digestion period. While October showed improvement, sustained high prices could keep volume growth constrained despite design differentiation strategies.
- The new showroom requires ₹150 crore in inventory funding (internally generated), doubling from the ₹20 crore raised in 2023. Combined with gold price inflation, this increases financial risk if revenue ramp is slower than expected.
- Management acknowledged that lab-grown diamond demand is slow, particularly in South India where natural diamonds are preferred. This limits the addressable market for any future LGD offerings.
- Management's target of scaling B2C from ~10% to 20-25% of revenue by FY27 (just ~18 months away) requires successful execution of the flagship store launch and sustained retail demand, which faces seasonality and competition risks.
Key quotes
- We have grown volume wise by 11 to 12%. As we have reduced our bullion, the top line shows that but volume wise ornament volume wise we have grown by 11 to 12% and it would be going to be better in H2.
- The upcoming store with an inventory of 150 crores, we are expecting in the upcoming years annual revenue of somewhere around 550 to 600 crores out of that store. So it is going to be a better ROI and since it is a retail segment the margins are somewhere around 11 to 13%.
- Over the upcoming 2 to 3 years, we are expecting the diamond sales to be a part of around total top line somewhere around 5 to 10%.
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