Goldiam International Limited (526729) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Goldiam International Q3 FY '25 Earnings Conference Call hosted by Monarch Networth Capital Limited. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital Limited. Thank you, and over to you, Mr. Dani.

Yes. Thank you, Renju. Good afternoon, everyone. On behalf of Monarch Networth Capital, we're delighted to host the senior management of Goldiam International. We have with us Mr. Rashesh Bhansali, Executive Chairman; and Anmol Bhansali, Managing Director of the company. We will start the call with opening remarks from Rashesh sir and then move to Q&A. Thank you, and over to you, sir.

Thank you, Rahul. Good evening, and welcome to Goldiam's Q3 and 9 months of FY '25 Earnings Call. I would first like to thank the entire team of Monarch for hosting this call. Goldiam reported one of the best financial performances for the third quarter of the current financial year. Our Q3 consolidated revenue at INR 2,880 million grew by 41% year-on-year and 104% quarter-on-quarter. Revenue for 9 months FY '25 at INR 5,988 million grew by 29% year-on-year. We posted higher revenue with better margin profile during Q3, thus improving overall margin for 9 months ended so far of FY '25. Q3 typically is a better quarter for Goldiam due to the festive season purchases across U.S.A. Besides revenue bookings of pending sales on account of shipments delays during the previous quarter, Goldiam's efforts to improve wallet share amongst its existing customers has translated in better revenue growth, even as the U.S. jewelry market remain more or less stagnant. Factors such as increased LGD jewelry contribution are quick time to market. Innovative designs and effective procurement of diamonds are helping us in protecting and strengthening our margins. Our EBITDA for Q3 at INR 708 million increased by 62% year-on-year and 105% quarter-on-quarter, whereas 9 month EBITDA at INR 1,397 million grew by 39% year-on-year. EBITDA margin for Q3 is at an all-time high of 24.6%, 9 month EBITDA margin too remains extremely healthy at 23.3%. Q3 profit after tax at INR 498 million is up by 54% year-on-year and 125% quarter-on-quarter. Profit after tax for 9 months at INR 939 million is up by 28% as well. Cash and cash equivalents, including investments at INR 2,759 million as on December 31, 2024. The Board of Directors of the company have also approved the second interim dividend at the rate of INR 1 per equity share of face value INR 2. During Q3 FY '25 lab-grown diamond jewelry exports contributed 80% compared to 58% in Q3 of FY '24 to the overall export sales mix. Online revenue accounted for 28% of the revenue during Q3 FY '25. About 74% of the inventory of finished jewelry as on December 31, 2024, is with customers as finished goods of jewelry to be sold in subsequent months to their consumers. Goldiam's order book position as on December 31, 2024, stands at about INR 1,750 million. This order book also will be fulfilled within the next 3 to 4 months. Now, gentlemen, let me give you an update on our Indian B2B brand, Origem. As you know, Goldiam opened its first floor Origem during the festive season of Diwali to the great customers' response subsequently. Goldiam opened another store at Kharghar, Navi Mumbai in December. We recently opened our Mumbai flagship store in the key jewelry market of Turner Road in Bandra as well, marking our entry into one of the most prestigious shopping destinations in our country. We hope this established -- establishes Origem's brand and promise as we roll out more stores nationally in near future. Goldiam will open 3 more Origem stores in Mumbai by March 2025. These stores will come up at Andheri West, Mulund West and at Fairmont Hotel near Terminal 2 of Mumbai International Airport. Following these openings, the company plans to open more stores in Delhi-NCR region. Recently, we have also launched a dedicated commerce website for Origem under the domain, www.origemindia.com. The website is witnessing good customer traffic as well. With the robust 9 month numbers, we hope to close FY '25 with decent annual growth in revenue as well as profits. Let me also emphasize that there is no further room for decline in lab-grown diamond prices. We have a road map and resources for making Origem India's largest lab-grown diamond jewelry brand and we are progressing well on that front. With that overview, I'm happy to open the floor for questions.

[Operator Instructions] The first question comes from the line of Bhavya Gandhi with Dalal & Broacha Stock Broking.

Congratulations on a good set of numbers. Sir, my first question is regarding the outlook for the B2B business. So overall, you are hearing in the diamond industry that is going through a rough time. So if you can provide at least outlook for next 2, 3 quarters, how is it going to pan out? And is there any impact of tariffs when it comes to diamonds, natural or lab-grown? Yes.

Thank you, Bhavya for your question. Now the diamond industry is the loose diamond industry, which generates or -- which manufactures natural diamonds. As you are aware, natural diamonds is no more a store of wealth and that's where demand has decreased due to the increased demand in lab-grown diamonds, which is a much more cost effective way of consumers buying diamonds which is chemically, physically and optically, the actual same thing. So the clear shift of demand from natural diamonds to lab-grown diamonds is very evident. And that is why the diamond industry, which is the loose diamond industry, which Goldiam is not a part of, right, is affected.

Okay. And...

You had a question on how do you see the coming couple of quarters? Well, we already have said that we have INR 175 crore order book and so the order visibility for the next quarter is very strong. This is higher than what we did same time last year, right? And I think we will be capable and to really get there and increase it as well. We see huge growth and demand for lab-grown diamond jewelry within our customers. We are actually now seeing customers asking us for diamond sizes which are 5 carat to 10 carat, while earlier it was from 1 carat to 5 carats. So there are very, very good chances that Goldiam's business will maintain and grow further.

Got it. Fair enough. Just wanted to understand if you look at the natural diamond average realization, that has increased sharply to 16% Q-o-Q in even in dollar terms and even in rupee terms it has increased 17%. So what has led to this growth in natural diamond average realization?

So we had earlier goods on memo, which clearly is selling down, so that helps to increase the revenue share out there. And again, you've seen the rupee being depreciated at a certain point. So probably that's again another reason why you've seen that happening. And we've been using slightly -- since diamond prices and natural diamonds have also gone down, all the new orders that are coming, we're getting for better quality, which is a higher size.

Okay. Got it. And with respect to a retail store, what has been the total revenue till now?

I would say -- you would want this number as on December, or as on today?

I want today as well as on December if you can help with both the numbers.

I think as on December, I think we've done around INR 75 crores, INR 78 crores -- INR 75 lakhs, INR 78 lakhs. And as on today, we cross INR 2 crores.

You've crossed 2 crores, okay. And we had alluded earlier that we wanted to open 15 stores in next 6 months, but the target now seems to be opening 3 new stores in Mumbai. So how long will the entire 15 stores be opened within?

Anmol, would you want to take this?

Sure. Thanks for the question, Bhavya. So our plan, we've taken a month to work on the tech and the backend operation for Origem. So we are very geared to now run faster in terms of [indiscernible] expansion. The plan is by March end 2025, so March 31, 2025, have our 6 stores in Mumbai all open. That itself will make us the largest [ coco ] lab-grown retailer in Mumbai city. In fact, not just coco. It will make us the largest lab-grown jewelry retailer in Mumbai by far margin. Post that we hope to very quickly expand both in NCR and Bangalore region. And the idea is over the 6 months thereafter, so effectively, Q1 FY '26 and Q2 FY '26 focus on NCR and Bangalore region markets.

Next question comes from the line of Dixit Doshi with Whitestone Financial Advisors Private Limited.

My first question is regarding the prices of the lab-grown diamond. So how it has moved from Q2 to Q3 level? Because I think the lower carat diamond, the prices last time you have mentioned that it has started increasing.

Sure. Thank you, Mr. Dixit. I'll give my comment here and then I'd open the floor to our Chairman as well to add on his comments. So for us now, prices of lower carat lab-grown diamonds are very stable. We have no price depreciation or reductions happening in any size in the last quarter or 2 quarters that is below 3 carat in diamond size. So for us now, we are comfortable and our focus is on volume expansion and, of course, upselling customers into larger [ caratage ]. So as an example, moving a customer in the U.S. who was buying a 1 carat lab-grown ring into now buying a 2, 2.5 carat lab-grown ring and so on so forth. I'd open the floor to our Chairman to add any comments.

Mr. Dixit, we now do not expect any further fall in the pricing of lab-grown and the company is very confident that at these prices, margins will be stable and we will grow from here with larger sizes as we've already spoken before.

Okay. My other question is, you did mention about the demand in the U.S., if you can also mention about our expansion into the other geographies, like UAE, Middle East or even Australia, Europe. And my last question is, so the real diamond jewelry do require a certification because of, obviously reason the higher value per diamond. But do you feel that even the LGD jewelry will need certification in future? And if yes, why do you feel so?

So I will first ask Anmol to answer the question on certification. Anmol, can you take that?

Yes. So lab-grown jewelry we don't -- see, certification for us is driven by our customers' requirements. As an example, in the U.S. when lab-grown diamond jewelry just started being introduced, all customers, all large retailers, required certification to separate the inventory which was lab-grown from the inventory, which was natural diamond jewelry. Today, with bulk of stores crossing more than 50% of the inventory being lab-grown diamond jewelry, they find a lesser and lesser need for full certification, or complete certification. Again, for us at Goldiam, it's a pass-through cost that goes directly billed to our retail customers. But we do see some large retailers now asking us to reduce the type of certification or reduce certification completely on entry level lab-grown jewelry items. I hope that answers the question.

Yes.

What was the other question, Mr. Dixit?

Yes, about the demand or the traction in the other geographies like UAE, Middle East, Europe, Australia?

So as I had mentioned earlier, we were foraying into Middle East as well as Australia. I'm very happy to announce that we made 3 shipments to Australia. Customer loves the product and they've already paid us for the same and we are now negotiating further orders from Australia. So we assume that Australia -- I mean, we don't assume, we are clear that Australia will be another strong geography for Goldiam going forward with the customer penetration that we've already achieved. Regarding Middle East, we have sent samples and we're still awaiting larger orders from -- we've just sent samples and small things have happened, but we're still awaiting larger orders from the Middle East. And with Europe, we haven't done much yet in Europe, because we've been looking at India as the other geography for starting Origem.

Next question comes from the line of Aman Vij with Astute Investment Management.

My first question is on the U.S. presence, so we are present both on the mom and pop store and on the big retailer side. So if we remove the mom and pop store, could you talk about what is our presence today, in terms of, say, number of final retail stores where -- what is the challenge today and where do you see this number in the next one year?

Mr. Aman, so Goldiam, at the moment, sells more to the larger retailers, but we do have a strong presence in mom and pop through our wholesale channel partners out there. It is really very difficult for us to sell to individual, one, one, one, one store ownership all across America, because shipping cost and other such geographical factors are against the value of the transaction. So we have a wholesaler, we ship to the wholesaler and the middleman and that person distributes in America via FedEx or UPS to all these smaller mom and pop retailers. So that wholesaler does close to $6 million, $6.5 million from us. There are -- these couple of wholesalers who do this kind of business and that's the kind of business we sell to this kind of mom and pop stores. The rest of our business is completely going to larger retailers.

So let me replay this. So I was trying to understand for the larger retailers only. So we are selling to largest retailers, but they would eventually have the final stores. All of them have like 1,000 stores and plus, as you have talked about historically. So as of today, our product in terms of the final retail stores of these larger retailers, I was trying to understand that presence in...

Okay. Anmol, would you want to take this?

Sure. So if I understand your question correctly, is it how many retail stores is Goldiam product present in?

Yes, and excluding the small stores, I'm only talking about the big retail chain will each have like, 500, 1,000 stores…

Correct. Correct.

Include everything. What is the number today? What was the number, say 1, 2 years back and where do you see this number in the next 1 year?

Sure. So we don't track that data. But to give you an anecdote and understand our business, 2 years ago, we were -- we would probably be in 1,500 to 2,000 stores in terms of large corporate retailers. Today, our presence would be north of 3,000 -- 3,000 to 3,500 retail doors of our large corporate retailers and there are a few more that we see potential with, but we have not started our account with them. But rest assured, the largest jewelry retailer in the U.S. is a customer of Goldiam and we are working on increasing penetration with them, along with deepening our penetration of accounts with our other top clients as well.

Sure, sir. So just continuing this question further. So we have seen a very strong growth after a long time in U.S. for this year. And I believe this is mostly due to increasing our presence from whatever you said 1,500, 2,000 to now 3,000 stores. So going forward now with this presence in more stores, is it possible to keep growing at this 20%, 25% level for next year?

It's a good question, Aman. Actually, I would say that your understanding is a bit incorrect. Yes, there is some amount of increase in distribution, but the priority for us, which we have maintained in prior calls as well, is to increase dollars per store or items per store. So we have access to some very large customers, very large retail accounts in the U.S. And for us, it's to give an anecdote, it's like adding for a car auto component manufacturers, adding more components within a car. So for us, it's how much presence do we have within the retail store itself. So that's been the focus. I think we easily can see visibility to grow our business significantly. Even with our current business, I think and the current growth, I don't see a challenge to keep growing for the next 3 to 5 years, provided, of course, there is no -- at least for the next 3 to 5 years on a long-term basis.

Sure. Just to finally talk about this. So say, if the value was X per store 1, 2 years back, could you talk about it what it is today and what it can be in the next 2, 3 years? What is your aim?

So we don't have -- we don't track data like that, but we've certainly grown some accounts 2x, 3x from what they used to be 2 years ago in terms of the account size that is enjoyed by Goldiam. If you would like, I can pull out that data on an overall number and maybe work on a report and share it in a couple of days.

Mr. Aman, just to add to that question, as I earlier said that earlier, Goldiam used to sell between 1 carat to 5 carat stones to these large retailers. Now we are seeing a traction from 5 carat to 10 carats. So it is -- once that happens and all the samples are through, once that happens, then it's very easy to even within that area, increase much more or double our business with those same retailers.

[Operator Instructions] Next question comes from the line of Tanay with Investec.

So I just had a couple of follow-up questions regarding a earlier participant's question regarding certification. So I understand you all pass on 100% of the cost to your customers. Is there a margin you all make on that also or no?

No, not really. It depends customer to customer. For the large part, there is no additional margin we add on to certification.

And like what percentage of your customers are seeking certifications now? And how has that trend been for lab-growns especially?

So it started with almost all 100% of customers seeking certification. Maybe on the entry-level styles on the lower ticket price items, $300, $400, they would not want certification. And for the higher ticket price items, they used to go for certification. Today, that number is lower than it was this time last year.

Would you be comfortable sharing like at what percentage would that be of your customer base?

Again, we don't really track it, but I can show you -- for us, it's not our core business. So it doesn't matter. It's a business line expense. So all I can say is that I'm speaking to customers and I know that they are looking to reduce their certification costings.

Got it. And in terms of certifiers, do you all have any specific names that customers usually want? Or do you all certify with anyone that's available?

For us, it depends on what the customer chooses. I can just share there are companies like IGI, GSI and discount certification labs like IGL, EGL, SGL, et cetera. Again, please remember, we are a jewelry company. So all of our certification is only on the finished jewelry side. We don't do any loose diamonds, and therefore, we don't have any loose diamond certification.

Next question comes from the line of Ankush Agrawal from Surge Capital.

Sir, firstly the question is around growth during the quarter. [indiscernible] about INR 50 crores of deferred sales that we had from Q2.

Sorry, I'm sorry for the [indiscernible]. We're unable to hear you.

So the question was broadly around growth. So if I remove about INR 50 crores of deferred sales that we had from the past quarter, we have done revenues about INR 230 crores, which seems lower given that we had an order book of almost INR 270 crores as of Q2 end. And typically, we do much more higher sales than the order book because about 20%, 25% of the sales which is online sales, is not captured in order book. So what was the reason why the revenue number this quarter was lower than the order book that we had as of last quarter?

Hello? I still haven't heard you, Ankush. Can you please maybe get on the phone or not be on speaker line?

The next line is [ Akshay ] from Exponent [indiscernible].

I want to go back to a question earlier in the conversation where you spoke about your increasing order values or number of pieces per store orders that you present in. So sort of maybe if you can help us understand exactly how this works once you enter an account, do you get orders from store level and you have to do marketing or push your product at a store level? Or is this something that client does at a system level and then sort of pass through to kind of produce as much or sell that much? And so the reason I'm asking is sort of, what is our lever to be able to increase penetration at a store level? That's one. Second is you spoke about the fact that you're probably present in about 3,000, 3,500-odd stores. If you had to take a 5- to 7-year, 10-year view, what kind of stores -- what kind of number of stores can you get to? And I would imagine that U.S. market would have a significantly larger number of stores. So yes, these are the 2 questions.

So thank you, Akshay. Let me answer the second question first. So again, we don't track the store -- the number of stores that we sell to, we track our account and account sizes. Just to anecdotally, again, just to share the exports of finished jewelry from seeds from Mumbai and from India to the U.S. are very significant from seeds itself, it's north of $3 billion, $3.5 billion. I would say that is easily our addressable market and much more, of course, looking at other regions of India, China, et cetera, exporting to both retailers in America and global brands around the world. So for us, we see that is our potential addressable market and opportunity size. On a longer-term basis, the idea is to at least -- well, on the medium-term basis and short-term basis, the idea is to increase depth of account size with each of our retailers, so add more introducing high-end fashion, introducing various sizes of lab-grown diamonds within entry-level bridals, regular mid-priced bridals as well as we mentioned, high-priced 6, 7, 8 and even 10-carat center stone bridals within the U.S. retail market. So for now, we are focusing on going deeper with our current customer base, but the opportunity size is very clearly there. Your first question, I didn't understand you because of audio issues. If you could repeat what you meant and what you were referring to regarding store level marketing, I'd be happy to answer that.

Yes, sure. So in the conversation, you spoke about how over the last few years, you all have been able to penetrate stores better, right, essentially number of pieces you sell per store.

Yes. Yes. Yes.

So how -- what does Goldiam do to get here? Because you don't get to a store by store and figure out what inventory should I keep here or here in either of the stores?

No, no. Very clear. Very clear, Akshay. Thank you. So this is a pure-play B2B business working with large corporate retailers. The idea is you crack an account, you open an account and you develop a relationship with the buyer who buys your line of jewelry within that retail organization over the span of 6 months, 8 months, you introduce new product, you look at what they are -- what they have in stores and understand white spaces. We have a small team of data analysts also at our factory to help us understand what is missing, what is trending up, what is trending down. And basis on this data, we feed our product design team who comes up with new concepts, new designs that work specifically for that retailer. Our sales team then goes and pitches that. And based on success of some of those lines, that trust develops with a buyer of that line of jewelry with the corporate account. The idea is as trust develops, as your design sell better than what they have in store, that buyer is also naturally inclined to keep growing your account size with them to keep saying Goldiam's designs are doing well. They're performing well. Let us increase the number of rings or the number of earrings that we buy from this one vendor. So that's on one side within who we already work with. But also then once you develop a deep enough relationship, it's working with that buyer to ask them to introduce us to not just the bridal jewelry, but also the fashion jewelry side, also maybe the studs and solitaire side. So then reaching out to ancillary buying groups and the other buyers for the same retailer and starting a relationship with them. Again, pure-play B2B developing trust, focusing on data and design is how we are able to go deeper with our existing retailers.

Next question comes from the line of Rupesh Tatiya with Intelsense Capital.

My first question, sir, is the question earlier participant was asking. I think last quarter, you said that INR 50 crore revenue got deferred. And if I take that out, then the -- for the quarter, the growth is like from INR 200 crores to INR 230 crores. I mean it's just a 15% growth. And that -- I mean, I think it doesn't match with your commentary that we were expecting high growth. So can you maybe explain that? And also did some sales get pushed to Q4 due to shipping or some other timing issues?

Yes. So that was the reason why those sales were shifted to this current year. But I think the figure was not INR 50 crores. We'll get back to you on that figure now. But yes, there was a lag and that sales happened this quarter.

Then that number seems low, sir, from INR 200 crores to INR 230 crores seems a little low given that...

It's quoted accordingly. And then this is an ongoing effect, right? So there are goods that are shipped, right, and which is also waiting for the customers to open their warehouses to take them in. Now those figures, we're still not aware. So the numbers are there. The numbers are pretty strong, right, and we will get back to you on what is shipped from the previous quarters and what is still to be shipped from the current quarter.

Next question comes from the line of Keval Shah with [ MK Capital ].

My question is on the retail market. Can you give some color how the resale market is for this lab-grown diamond?

Thank you, Mr. Keval. So if your question is regarding the resale market, so it's exactly the same as natural diamond jewelry, where each retailer will only buy back the goods and products which are sold by that retailer. Similarly, in natural diamond jewelry, a company like Tanishq will only buy back Tanishq jewelry in studded in the -- at least in the studded section. In the same manner, Origem is happy to buy back jewelry that is made and certified by Origem itself. We have the best-in-class policies, which are all on our website. I forgot to mention as well, but we have gone live on our website and we've started omnichannel sales on www.origemindia.com. I'd request everybody on call to please check out our website and we've got all our policies as well as full customization of all of our jewelry available from day 1.

And my second question is regarding -- due to recent surge in gold price, do you see the increase in footfall, especially for the fashion jewelries and lab-grown jewelries for non-marriage events?

Thank you, Mr. Keval. So it's a little early for us to comment on that with 3 stores live at the moment. But we do see -- our thesis is and the reason for being Origem is that the sub INR 1 lakh, sub INR 2 lakh jewelry market in the next 5 years, 8 years, 10 years and that longer period of time will really boom in India. And given where gold prices are, because they are so high now, it, in fact, lends itself better for the customer to move from buying natural diamond jewelry in these price points to lab-grown because what money is left over to fit into the diamond segment, natural diamonds made because gold is so high already, you don't end up getting a lot. I mean lab-grown, in the lab-grown section, you can get much bigger and much more diamonds without compromising on budget or look. So we believe it will certainly play out very strongly as gold prices have gone up that the customer finds more reasons to purchase lab-grown diamond jewelry in these price segments.

Next question comes from the line of Rupesh Tatiya with Intelsense Capital.

My second question was on B2C model. So is the model settled? I mean, what is our, let's say, revenue per store? What is the ticket size? What is the carat range? How many -- what is the breakeven point? Is the model settled? If you can give some information about the Origem?

Sure. Thanks, Rupesh. Great question. We will be able to give a lot more color in the Q1 conference call, but I can share with you our working model and what we're seeing happen at the moment with these number of stores itself. So as per our -- it changes store to store. For our flagship, it would be higher. But the general store fleet should -- the way we are planning it should have a breakeven just a little bit shy of INR 30 lakhs of monthly sales per store. In our 3 stores, we are achieving it in all the 3 at the moment. And as business footfalls increase, as business increase as generally brand awareness grows up, grows and demand increases for Origem's products, we see the model because of a higher gross margin built in compared to every day compared to our peers in everyday fine jewelry in the natural diamond side, we see that the model lends itself to being a higher ROE, faster store level breakeven than some of our competitors. So this is the breakeven that we are working with at the moment. It's matching our costs and the revenues from our first 3 stores are also hitting the breakeven point at the moment. So we're very happy given that we're only 2 months or 2.5 months into this journey of retail and B2C. And we are looking forward to within the next 6 months, opening stores faster so that brand awareness increases in general as well.

So sir, just one clarification. So you said in the natural diamond gross margin, the industry makes around 20% to 25%...

I think for everyday fine jewelry players that are in that omnichannel space, similar to our price points, the margin would be slightly higher even in natural diamond jewelry, close to 25% to 30%. Yes.

So then the LGD margin, is it fair to assume it will be 60%, 50%, 60%, like that?

So the way we are modeling is post-discounting, we will be north of 40% and we are achieving that, 40% to 45%. With that also, I'm happy to share we've done a competitor study with a few start-ups which have launched in the lab-grown diamond space. Origem is certainly on the solitaires between 15% to 40% cheaper than competitors that don't have the benefit of creating the designs, creating the jewelry and buying the diamonds or growing the diamonds themselves. So our end-to-end model really and the heft of Goldiam's strength as well really helps us to not just maintain a higher gross margin, but also compete very strongly against some of the lab-grown start-ups, which do not have a prior experience of a jewelry business feeding them.

Next question comes from the line of [ Anand Jain ], an individual investor.

Great work. Just a few questions. One thing I wanted to understand is like in reply to the previous question, you said that you are already breaking even on the retail side on the 3 stores that we are currently operating. Is that understanding correct?

Yes. Thank you, Mr. Anand. We are breaking even on the store level operations, not including, of course, head office and...

Yes. Corporate expenses. Yes.

Yes.

Okay. That's amazing because I think it's just 3 months and that's absolutely amazing. The second question is in this 1 month since we have -- it's been almost a month that we launched our website. What kind of sales revenue have we driven through the website?

Sure. So because it's omnichannel, we -- in fact, we have deeply integrated similar to some of -- some of the largest omnichannel jewelry players in India some of the online revenue, if the store -- if the piece is available in store gets booked by the store as well. So I'll double-check the data and I'm happy to share that with you in a day or so. But we are fairly satisfied and we're looking forward to keep building the online segment. We work every -- effectively at the moment, every day or every second day, we get 1 or 2 orders.

Oh, that's good. Last question is that are we looking for any celebrity brand endorsements or any of like large ticket marketing exercises?

Yes. Great question, Mr. Anand. So we are having our flagship store in Turner Road, Bandra being inaugurated formally at a launch event day after with a celebrity, Bollywood celebrity will be coming to launch the store along with media rights. However, that's a ribbon cutting and event exercise in terms of a face of the brand or a brand ambassador. At the moment, we are not looking to add someone on until we expand our store fleet to in the range of 15 to 20, 25 stores. So once we're present in Bangalore as well as NCR markets, I think that's certainly on the agenda.

Next question comes from the line of Bharat Gianani with Moneycontrol Pro.

Congratulations on each of the numbers. Just wanted to check that how is the demand at the ground level and the consumer sentiment in the U.S. market? We have seen some good festive commentary that you shared in the press release. So wanted to check on the sentiment -- consumer sentiment side on the U.S. market. And given the growth opportunity that you have highlighted of increasing the sales to the retailers that is there, deepening the presence that you pointed out. So can you give a revenue outlook guidance for the medium term, what kind of revenue growth you are targeting, excluding the Origem brand that we have and including the Origem brand, if you can highlight it overall company level for next 3 to 5 years, what kind of growth you are looking at?

Mr. Bharat, I would like to state that this year, we still look at opening close to 20 stores. And in the next 3 to 5 years, we are looking at 150 to 200 stores that are wishing to get opened now. Retail is a segment where there could be a certain amount of delays in opening and getting there in times with the rentals and getting the right location and stuff like that. So -- but if you see the unit economics, we are looking at doubling our business from Goldiam with the help of Origem within the next 4 years. Because that's the foot plan of opening the number of stores that will come out. And I think the export market is very strong. We will grow. We are looking at growing at a minimum -- our direction is always 10% to 15% and then we try our best to do more. But if you really go to see with the help of Origem in 4 years, we should be doubling our current export figures, current revenue.

Next question comes from the line of Bhavya Gandhi with Dalal & Broacha Stock Broking.

I just missed the time line of the store openings. You said in next 6 months, we are planning to open 3 more stores by March. And then in the Delhi NCR, what is the time line? And for Bangalore, what is the time line?

Sure. So thank you for the question, Bhavya. We'll be opening 3 stores by March end, so not the next 6 months, just in the next 40, 45 days, we should have a store fleet of 6 stores in Mumbai. Post that, we will start looking for locations and engaging with potential asset owners, both on the high street and mall side within Bangalore as well as NCR. The idea is if all goes according to plan and the right locations are available at the right prices, of course, we hope to do between -- do around -- open around 20 to 25 stores, in that ballpark more or less, by December end 2025. I'll open the comments to our Chairman to correct me if any.

No, you were absolutely bang on, Anmol.

Next question comes from the line of Aagam Sanghvi with Wallfort Financial Services.

Yes. You currently said that you are planning to open 20 to 25 stores by December '25. So what will be the model of expansion? Like it would be a company-owned and company-operated model or a franchisee model?

So complete coco, we were not looking at franchise opportunities at the moment in this calendar year. We'll certainly evaluate and look at that model once we have the brand well established.

All right. My next question would be regarding the e-commerce sales. So for the next 1 or 2 years, what would be the percentage of sales from the e-commerce division? And what margins can we expect from there?

Sure. So let me answer on the B2B side. So e-commerce selling online via our customers' retail websites. So about 20% to 25% of our sales come from that channel. Again, that's really amazing for Goldiam because that channel operates at a negative working capital. We get paid within 7 to 30 days, whereas raw material is bought -- diamonds are bought with longer terms. So it's been a phenomenal avenue for us to increase profitable sales with very strong ROEs. We expect this ratio to continue, about 20% to 25% of sales coming from online channels moving forward as well, which is double of where the industry stands.

No, I mean, I was asking from your own website, like Origem.

Sure. So from Origem, we just launched, we haven't modeled the figures yet. We're happy to share that data in the Q4 conference call. And certainly, Q1 conference call onwards, we'll have much more color to present on Origem, both stores and e-commerce side.

Next question comes from the line of Aman Vij with Astute Investment Management.

Continuing on the Indian retail side, sir. So on the online side, there are a couple of players, the oldest player, Bluestone is doing like INR 300 crores, INR 400 crores sales. So is it possible for us to do, say, INR 100 crore kind of sales in the next 2 years on online, domestic channel as well as when you talk about we have planned of, say, 20, 25 stores. So obviously, this will happen throughout the year in CY '26. But say, for CY '27, if these stores generate similar run rate, which you are talking about. So is it safe to assume that for, say, next 1, 2 years, this retail revenue can scale to, say, INR 100 crores, INR 150 crores kind of sales as well?

Thank you for your question. Yes, as we said, if we open the 25 to 30 stores within the next -- by the end of the year and if we calculate on an average, INR 30 lakhs per store, it's very safe to say that within the next time frame you're looking at, you will see an additional of INR 90 crores to INR 120 crores between e-commerce as well as store openings.

Yes. And specifically on e-commerce, is it possible for us to like grow this business very fast once we have like 15, 20 stores? So e-commerce alone, can it contribute like INR 1,500 crores sales for us?

So let me take that question, Mr. Aman. Certainly, down the road, I can't comment on exactly whether that would happen in the next year or so, but it's certainly possible down the road. See, our biggest learnings from now very well-scaled omnichannel everyday fine jewelers on the natural side is that once you cross a certain price threshold, which is INR 20,000, INR 25,000, online is more used as a platform for omnichannel sales. So the customer looks online, but comes to the nearest store to actually transact. That's why we see many names, some of which you, of course, very well know, rapidly being online-first company now expanding or already expanded north of 200 to 300 stores. So yes, online will be an important part of the journey and it can certainly grow. I can't comment on when that -- exactly when that would happen. It's linked to development of the brand and growth of the brand in general. But for our category in everyday fine jewelry, given the price points we are targeting, which is more or less an ASP of INR 40,000 to INR 50,000, bulk -- I assume bulk of sales will end up being offline in general.

And just one clarification on this realization, which you mentioned around, say, INR 40,000, INR 50,000 per customer. So is it safe to assume, sir, for achieving that INR 30 lakh number we just need 2 customers a day and then anything addition, everything will flow to our margins and to the bottom line. And is there...

Absolutely. That's why we see a lot of potential in this business model at Origem. Once stores hit breakeven and thereafter, the stores season well. The brand is well accepted. The designs are well liked and revenue naturally takes its cost to go upwards. It could be a phenomenally value-accretive business model as well.

Next question comes from the line of Sunil Shah with SRE PMS.

Sir, just want to understand one basic question on the business side. Sir, what happens to the unsold inventory which lies in the large format store overseas? What happens to that?

Sure. Right. That's a great question. So as we put out the data, about 70%, give or take, 70% to 75% of our inventory is sitting as finished goods on consignment with large retailers in the U.S. So every month, every day that sells down, we get paid for it every month as it sells. The styles that do not work, that don't sell well after a course, a period of time of 12 months or 14 months or 16 months as required, Goldiam has a binary choice. We can either take a markdown on those items and move them to the clearance section within those stores, in which case, hopefully, with a lower retail, then they can liquidate naturally in store itself or we take that back, take the inventory back, melt it. And the unique thing about diamond jewelry inventory is once you melt it, gold is immediately recyclable in tomorrow's orders. And diamonds, if you've done your job well of inventory management, then you know you can use those diamonds, those shapes, those qualities, those sizes within your future orders in a quick period of time. So other than, of course, design and working on improving the hit ratio of designs, a particular thing that we do at Goldiam is keep a keen eye on inventory management. It's a very important part of our business so that we can ensure that dead inventory is not sitting in any store and we are able to recycle what needs to be recycled fairly quickly.

Sir, the second question, again, in the context with inventory and so working capital. Sir, the credit period that is given, right, for -- we have 4 different ways, the wholesaler overseas who buys the product from us and then sells it through those multiple mom and pop stores overseas; the large format retailer who buys from us overseas. Then we have our own stores here in India and we would also have perhaps wholesalers in India. So there are 4 major customers so-called categories of customers or if there's anything more you can add to it, but just tell me the number of days of credit that is provided to you.

Absolutely. Absolutely. No problem, Mr. Shah. So let's start with the smallest segment, which is wholesale sales to the U.S., so where we sell to wholesalers, credit terms there are usually between around 150 to 180 days. Then we go to selling to stores, so large format retailers whom we deal with directly. When we sell to the stores, credit periods are between -- and directly on purchase order basis, credit periods are between 60 to 90 days, at max 120 days with 1 or 2 retailers. Then we sell online on the same customers' websites. So XYZretailer.com. On their website, any sales that happen, our credit period is 7 to 30 days, so much, much faster and that's why it's been a particular focus for us. And then memo sales. So any consignment that's been sold by the retailer, they have to pay us by end of the month. So they sell between day 1 and day 30, by the 5th of the following month, they have to pay us for what has been sold. So that is immediate, but of course, that's consignment, on consignment. The India operations, we don't sell to any wholesalers or retailers in India. We only sell in India through Origem, which is our own brand. Because it's a new brand, we -- the sales are -- and because it's directly retail, there is no credit period here.

Sir, if I can squeeze in one more question. Sir, where I'm coming from is the perception of the stock market community towards the diamond industry. And the broader perception created over the decades has been the misconception or anything, but by and large, the sales numbers are always questioned by the stock market community for the diamond industry. There is a lot of circular sales which happens in the perception. So how does that particular perception change? Meaning I'm trying to understand why would the company in the diamond industry be rerated in the eyes of the stock market community. Could you make me understand this, please?

Anmol, let me take this.

Sure.

So first, let me explain to you 2 things that Goldiam's operations for export are all in [indiscernible], which is the SEZ. So we can only export, we can't sell in the domestic market. None of the exports of Goldiam go in loose diamonds, which can be circulated to Dubai, Hong Kong and back -- Dubai, Hong Kong and back, right? And there is, first of all, no reason for a company like Goldiam to sell loose diamonds, which we anyway don't. We have a 0 export of loose diamond. We don't have any debt. So once we don't have a debt, we don't have to show to the bankers to keep the same line, so we keep circulating and stuff, things like that. We are a pure design-based jewelry company. Our exports are straight to the largest retailers in the world in America, right? We are not shipping product to Hong Kong and getting it back to Dubai and getting it back, our balance sheets and can really explain that to you very easily. And now we have a business in India. So the question of circular trading in Goldiam's book just cannot exist, right? Now whereas these loose diamond people, we are not in the same industry. So I just want to state again that we are not -- we are -- diamonds is only our raw material. We are not in the diamond industry. We are completely into design-based retailing or design-based exporting, creating value addition for the company.

And if I can add on, Mr. Shah, it's something that we take pride in and we have a lot of importance that we give to is our disclosures and our governance. As promoters and management, this is the sole business that we have. So all of our efforts and time goes within -- to Goldiam and, of course, our subsidiaries. And beyond that, the track record of Goldiam over the last few years shows the amount of true cash being generated by the company. It's being distributed or has been -- so far been distributed in the form of dividends and buybacks. Despite of that, we have maintained our cash balances at near to all-time high region. So that clearly shows how a company our size is rewarding shareholders, is creating governance and is focused on being clear and transparent in all that we do.

Next question comes from the line of [ Taksh Malhotra ] with [ Atriv Global ].

Congratulations on the great set of numbers. So 2 sides to the question. First one is a little more detail while you've answered a lot of the questions asked by other participants. But just keen to understand that given that the gold prices are increasing so steeply, is Goldiam also looking at making jewelry with silver as the base metal along with the lab-grown diamonds?

Thank you, Mr. Taksh. So it depends on our retailers in America. If they want us to, we're happy to do that. Very, very small portion of our line is silver-based jewelry that diamond started in silver and silver-based jewelry manufacturing. I don't see retailers in America pushing too much, especially in the bridal segment. And because we particularly focus on bridal, I don't see that portion increasing dramatically. But -- so I hope that answers the question. And at Origem, we are not introducing silver.

Okay. Yes. Because it makes sense. Otherwise, it becomes just another fashion jewelry with regards to Origem demand. Also, you mentioned that you have a buyback policy within Origem. Are you buying back -- is the buyback usually at the same price? So in case a walk-in client comes and happens to buy something for INR 1 lakh and probably a couple of years later, they come and want to sell it back. Is it just the making charges that are reduced? And -- or how does that work?

Sure. So I can run through the buyback policy. We've benchmarked it to our largest jewelry retailers in India, Tanishq, et cetera. So the way it works is making charges are deducted. Any -- and of course, gold and diamonds both are credited back in the form of the current market value. So if gold increases, if gold goes to $3,000 per troy ounce or even higher, the customer gets the benefit of that. And diamonds, depending on where current market is, as per Origem's grid, it will be credited at that rate. Again, going back to the question of lab-grown diamonds, we see no further price falls coming in, especially in the diamonds, which are now not 3 carat, but also below 5 carat, 5 carat and below. So at the moment, I think it's a great time to buy lab-grown diamond jewelry.

Yes. Okay. So what is the maximum caratage that you guys have started making yet?

Sure. So in terms of diamond caratage in most of our stores, it goes up to 3 to 4 carat. For our flagship, we're taking it all the way up to 10 carat center stones as well.

Next question comes from the line of Rupam Jaiswal with Investwell Agents Pvt Ltd.

Sir, I may be repeating this question, but I just wanted to know like do all your customers require certification for the jewelry? Or does it depend on the value of the piece?

Sure. It depends. They don't require jewelry and it depends on their personal requirements. So value of the piece, who their customers are, what they want to do. It's a retailer-driven choice.

Next question comes from the line of Dixit Doshi with Whitestone Financial Advisors Private Limited.

No, all my questions have been answered.

Next question comes from the line of Ankush Agrawal from Surge Capital.

So the question -- first question I want to ask is, if I look at our natural diamonds revenue, those have been de-growing like 30%, 40% for almost 6, 7 quarters now. But -- so I wanted to understand what is happening over here because I believe the industry wouldn't be de-growing this past. So are we consciously trying to sort of reduce that business or it is an outcome of, say, the retailers themselves not willing to do that business any longer?

Sure. Thank you, Mr. Ankush. So yes, it's a conscious decision. Natural diamond jewelry, especially being distributed to stores, which has a requirement of also doing a certain amount of consignment for new product testing. We are moving more and more towards lab-grown. Of course, if a retailer needs product in natural, we have design capability and we are able to deliver it. But we want an understanding from retailers on an exit plan, a way to purchase that inventory, a way to sell down that inventory because for us, what we are seeing on the ground level in America, because we have data on what's selling every month from our consignment and memo sales, the lab-grown diamond jewelry is selling faster as a percentage of inventory than the natural diamond jewelry. That simply means that the capital being invested is working faster by investing it in lab-grown diamond jewelry. The trend, of course, is moving towards there. And the end customer is clearly telling us what he or she wants to buy. So at Goldiam, it's been a decision we've taken to lean more heavily on lab-grown. But of course, we're -- at the end of the day, we're a jewelry company. So we're technically stone agnostic. But our desire in terms of what to distribute, invest in and sell would certainly be lab-grown diamond jewelry.

Next question comes from the line of [ Anand Jain ] with -- individual investor.

Just one question, Anmol. What has been the EBITDA impact of our retail operations in this quarter?

Thank you, Mr. Anand. So we haven't -- we can share that data. We haven't split it up at the moment. We'll certainly share that data in a day or 2. In December ending quarter, it was not very significant, especially due to growth in the business and the overall revenue pie increasing. But please give me a day and I'll be happy, a day or 2 and I'll ensure that we split that number out and share it as well. That is also something we are planning from Q1 onwards to share in our corporate deck.

Next question comes from the line of [ Akshay J. ] with [ Exponent Try ].

I wanted to sort of get some thoughts on what are the learnings so far from the retail operation, maybe things that have worked well, things that have not worked well on merchandising, marketing. I know it's a little early, but [indiscernible] get a sense.

Sure. Thank you, Akshay. Happy to share some thoughts. Well, a few things that were surprising to us was the quantum of made-to-order or customization requests we got. Thankfully, because of our jewelry supply partners, the ability of us to be able to buy diamonds ourselves in a very rapid manner and deliver them to -- for custom manufacturing, we've been able to adapt to that trend and that's a non-insignificant part of our sales at the store level. Another thing that we've noticed is, in fact, in key jewelry markets, especially, for example, Borivali, which was our first store, the customers already is fairly well educated on lab-grown diamond jewelry. They come in knowing what lab-grown is, how it is truly chemically, optically and physically the same as natural diamonds. So that requirement to convince the customer to come into the category isn't as prevalent. Now of course, as we expand, as we move into regions and lab-grown players are not present or even mall stores where there's much higher daily footfall that may change. But in our current store format, that's been a particular interesting learning that we've had. And again, the focus on design is extremely important as well. I'll open it to our Chairman if he wants to add any comments here.

So also, we feel that we're kind of understanding more of what the consumer behavior and patterns are in the 3 months of learning that we've had with Borivali store, 2 months from Kharghar and a few days from Turner Road. Our 14-carat, 18-carat both have been liked by consumers and that's really not a reason that we only need to make 18-carat jewelry. 14-carat is being bought by consumers in our country unquestionably. So that's one good learning. And earrings and rings are very strong sales and the fastest to sell from all the other things like either a pendant or a large necklace or stuff like that to add on to what Anmol has said.

Ladies and gentlemen, due to time constraints, we have reached the end of question-and-answer session. I would now like to hand the conference over to the management for closing comments.

I want to thank all the participants for joining us today. If you have any further questions or need additional information, please feel free to contact Dissero Consulting, our Investor Relations team. Thank you all and have a good evening.

Thank you very much.

Thank you. On behalf of Monarch Networth Capital Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.