PN Gadgil Jewellers shares hit a 5% lower circuit on BSE at ₹545.3 per share, extending their decline for the second consecutive session. The stock tanked 15% after posting Q4 results, significantly underperforming the broader market where the BSE Sensex was down 1.27% at 74,280.05. According to reports from Business Standard, this marked the second consecutive session of decline for the jewellery retailer's stock.
In the March quarter (Q4FY26), PN Gadgil reported strong revenue growth with net profit increasing 45.6% to ₹90.26 crore compared to ₹61.99 crore in the previous year. The company's revenue from operations stood at ₹3,544.31 crore, up 123.2% year-on-year from ₹1,588.22 crore. However, Ebitda margins compressed to 4.7% from 6.9% a year ago, with absolute Ebitda at ₹166.33 crore compared to ₹109.04 crore previously. As reported by Business Standard, the company's gross margin also declined significantly to 9.7% from 12% year-on-year.
The company attributed the contraction in consolidated gross margins to three key factors. According to Business Standard, the higher share of gold bars and coins in the sales mix rose from 28% to 40% of revenue, compressing margins by approximately 150 basis points due to the segment's structurally thinner spreads. Additionally, lower contribution from studded jewellery due to a one-time Foundation Day and Gratitude offer on gold jewellery diluted margins by approximately 30 basis points. Higher trade discounts and promotional offers during the Gudi Padwa festive season and new market expansion weighed on margins by approximately 50 basis points.
Management highlighted that an increase in gold customs duty from 6% to 15% could moderate bullion demand and accelerate old gold exchange trends. As reported by Business Standard, the company remains focused on increasing old gold contribution from the current 40% to 50% through its 'Suvarna Swarajya' initiative. The company also plans to increase the hedging ratio to 75-80% from 60% in FY26 to reduce margin volatility. Despite the margin pressures, brokerage firms maintain a positive outlook, with one reiterating 'Buy' rating and a target of ₹715, citing ongoing strategic initiatives and long-term growth visibility.
