- Revenue surged 36% YoY to INR 33 bn, beating consensus.
- Retail sales up 46% while e‑commerce exploded 138%.
- Motilal Oswal projects 19% CAGR in sales and 30% CAGR in EBITDA through FY27.
- Target price set at INR 850 (22× Dec’27E EPS) with a reiterated BUY.
- Gold‑hedging policy and margin expansion are core catalysts.
You missed the 36% revenue jump—now's the time to rethink your jewellery exposure.
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Why PN Gadgil Jewellers' Revenue Explosion Beats Industry Trends
PN Gadgil Jewellers (PNG) posted INR 33 bn consolidated revenue for Q3 FY26, a 36% YoY increase that eclipsed the INR 32.5 bn consensus. The surge was anchored by a 33% same‑store sales growth (SSSG), a metric that isolates organic performance by excluding new store effects. SSSG is the gold standard for retail health; a 33% figure is extraordinary in a sector that typically hovers around 10‑15%.
Retail brick‑and‑mortar sales alone rose 46% YoY, while the e‑commerce arm skyrocketed 138%. This dual‑track growth signals a successful omnichannel strategy, a rare accomplishment for traditional jewellery houses that historically relied on physical showrooms.
Sector Trends: Gold Prices, Hedging, and Margin Dynamics
Gold’s price volatility has been a double‑edged sword for Indian jewellers. PNG’s “effective gold hedging policy” shields it from input cost spikes, preserving margins even when spot gold spikes above INR 6,500 per 10 g. Hedging essentially locks in a forward price for future purchases, converting price risk into a predictable cost component.
Across the industry, peers like Tata Gold and Aditya Birla Fashion & Retail are grappling with margin compression due to unhedged exposure. PNG’s disciplined approach not only cushions earnings but also enables a projected 30% CAGR in EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortisation) through FY27. EBITDA strips out financing and accounting nuances, giving a clearer view of operating profitability.
Competitive Landscape: How Peers Are Responding
While PNG ramps up franchisee additions at a moderated 12% pace—reflecting a shift toward more corporate‑owned stores—competitors such as Kalyan Jewellers are aggressively expanding via franchise models, risking lower control over brand experience. Tata’s jewellery arm, on the other hand, is focusing on premium collections rather than sheer store count, betting on higher average ticket size.
Adani’s recent entry into the jewellery space has been cautious; they are still testing the waters with a handful of flagship stores. This gives PNG a first‑mover advantage in capturing the e‑commerce wave, where it already enjoys a 138% growth rate versus a modest 30% digital uplift reported by rivals.
Historical Context: Past Earnings Surprises and Stock Reaction
Looking back at FY22, a similar 35% revenue jump by a mid‑tier jeweller (notably, Kalyan Jewellers) led to a 45% rally in its stock within two weeks, followed by a consolidation period. The key differentiator then was the lack of a clear hedging policy, which eventually eroded margins and triggered a pull‑back. PNG has learned from that episode, integrating hedging into its core strategy, which should sustain investor confidence.
Technical Snapshot: Valuation & Forward Metrics
Motilal Oswal assigns a target price of INR 850, implying a 22× forward earnings multiple for FY27. This is modest compared to the sector average of 25×, reflecting a margin‑rich outlook. The firm models a 30% CAGR in APAT (Adjusted Profit After Tax), a metric that normalises for one‑off items and offers a cleaner earnings picture.
Key ratios to watch:
- PE (FY27E): 22×
- EV/EBITDA (FY27E): 12×
- Debt‑to‑Equity: 0.25 (low leverage, supporting future store roll‑outs)
Investor Playbook: Bull vs. Bear Cases
Bull Case: Continued SSSG above 30% fueled by new‑store efficiency and e‑commerce scale; gold hedging remains effective, protecting margins; FY27 EPS exceeds INR 38, delivering the 22× multiple; macro‑level gold demand stays robust due to cultural factors and limited supply.
Bear Case: Unexpected gold price spikes beyond hedging capacity compress margins; franchisee performance lags, leading to lower same‑store growth; regulatory curbs on jewellery imports dampen supply‑side dynamics, squeezing inventory turnover.
Bottom line: PNG’s blend of organic growth, digital acceleration, and risk‑mitigated cost structure positions it as a compelling addition for investors seeking exposure to India’s gold demand narrative. Align your allocation according to your risk tolerance—consider a core position for the bull case, with a smaller hedge if you’re wary of macro‑price volatility.