#PNGSGargi #Gargi concall financial highlights
PNGs Ghi Fashion Jewelries Limited hosted its earnings call for the year ended March 31st, 2025, providing insights into its financial performance for FY25 and its outlook for FY26.
FY25 Financial Performance Highlights:
- The company's turnover grew significantly from ₹51.5 crore to ₹126.35 crore in FY25, marking a strong growth of 147% year-on-year.
- EBITDA margins, excluding other income, improved by 22% to 30%, attributed to a better product mix and operating leverages.
- Excluding a one-time B2B inventory sale, the actual B2C (Business-to-Consumer) sales were ₹82.44 crore, demonstrating a 62% growth compared to the previous year's ₹51.5 crore.
- The company added nine new stores during FY25, bringing the total number of stores to 14 by the end of the fiscal year. Most of these new stores were added in the second half of the year, with four in the last quarter and two in the last 45 days, including one large-space store opened just two days before year-end.
- Marketing spend for FY25 amounted to ₹3.75 crore, with a significant portion (around ₹2 crore) spent in the seasonally weak Q4, which negatively impacted Q4 margins.
- Over the past three years (FY23-FY25), B2C revenue grew from ₹28.67 crore to ₹82.49 crore, achieving a substantial 69.7% growth (roughly 70% CAGR), which "substantially outpacing the industry average growth of 20% to 25%".
FY26 Outlook and Key Initiatives:
- Store Expansion: The company intends to open 10 to 15 new stores in FY26, committing to not less than 12 stores. Approximately 6 to 7 stores are planned for the first half of FY26, with a minimum of five located outside Maharashtra. By the end of FY26, the company expects to have 47 to 50 stores, up from its current 45 (14 EVOs and 31 SIS with PNG). The backend system is already capable of handling at least 75 stores over the next two years.
- Marketing Spend: PNGs Ghi Fashion Jewelries plans to spend around ₹7 crore on marketing in FY26, a significant increase from ₹4 crore in FY25. This increased spend, particularly for creating brand awareness outside Maharashtra, is expected to impact bottom-line margins but is anticipated to be absorbed by higher earnings resulting from increased top-line growth.
- Online Sales: The company is targeting 10% of total sales from online channels, up from the current 4.5% (which was previously as low as 2%). This goal is expected to be achieved over a minimum of 2.5 years. The company is launching its own app on iOS and Play Store and exploring ways to increase online sales through its website.
- Profitability: Despite the higher marketing spend, the company expects to maintain or improve profit after tax (PAT) in absolute rupee terms.
- Growth Pace: The company is confident that its organic growth will more than offset the impact of the one-time inventory sale from FY25, and its B2C growth will continue to outpace the market average of 20% to 25%.
- Sales Channel Mix: The company is actively working to reduce its dependency on PNGSL. While currently 77-78% of sales come through PNGSL, with 10% from Exclusive Own (EO) stores, 4.5% from online sales, and 6% from Shopper Stop, the goal is to reduce PNGSL's contribution to 60% and increase its own channels to 40% within the next three years.
- Gross Margin Fluctuation: The drop in gross margin in Q4 FY25 was attributed to increased human resource and marketing costs (specifically ₹2 crore in Q4) and the impact of rising silver prices on older, pre-priced inventory being sold. The company anticipates maintaining or improving gross margins due to the scale of operations.
- Store Inventory and Setup Costs: For mature stores, the company expects an inventory stock turn of three to three and a half times, with the best performing stores potentially reaching four to five times. The cost to set up a new store (typically borne by the franchisee) includes: ₹20-25 lakh for fitment, ₹2-3 lakh for hardware and miscellaneous assets, and inventory requirements of around ₹30 lakh for silver jewellery (up to 400 sq ft) and ₹50 lakh for diamond jewellery, all at label price.
- Fundraising: A fundraise of ₹10-15 crore via preferential issue to promoters is planned. These funds are exclusively for marketing costs over the next two years, and the process is expected to be completed before August 31st.
- Product Categories: Diamond threaded jewellery constituted over 45% of total sales last year, and the company has successfully introduced higher-ticket items like ₹2 lakh necklaces in the Gagi range.
- Mainboard Listing: The company plans to shift from the SME platform to the mainboard platform after completing three years in December 2025, as it is compliant with all requirements.
Read the complete transcript here - https://stockmarketssahihai.com/knowhow/8/pngs-gargi-fashion-june-2025-concall-transcript
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