PNGS Gargi Fashion Jewellery Limited (543709) Q3 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the earnings call with Identified Investors and/or Analyst Conference Call hosted by PNGS Gargi Fashion Jewelry Limited. [Operator Instructions] I now hand the conference over to Ms. Hiranyamai Deshpande, Company Secretary from PNGS Gargi Fashion Jewelry Limited for opening remarks. Thank you, and over to you.

Thank you, Ryan. Good evening, everyone. This is Hiranyamai Deshpande, Company Secretary and Compliance Officer of PNGS Gargi Fashion Jewelry Limited. A very warm welcome to all of you to the earnings conference call. For discussion, we have here with us Mr. Amit Modak, Mr. Aditya Modak, our Director; and Mr. Vishwas Honrao, our Chief Financial Officer. Welcome, everyone. We wish to start by qualifying that during the call, we may make some forward-looking statements. PNGS Gargi does not provide any specific revenue earning guidance. Anything which is said during this call, which may reflect our outlook for the future or which may constitute as a forward-looking statement must be reviewed in conjunction with the risks that the company faces. These statements are considering the business environment we see as of today, and therefore, there could be risks and uncertainties that could cause actual results to vary materially from what we are discussing on this call today. An audio link and transcript of this call will be shortly available on the Investors section of our website www.gargibypng.com. With this, we are now ready to begin with the opening statements and the performance of the company. And post that, we will be available for the question-and-answer session. I now request Mr. Amit Modak to take over. Okay. Now I request Mr. Aditya Modak to take over. Over to you, sir.

Thank you, Hiranyamai. I hope I'm audible. Yes. Thank you all for joining the call. Our Q3 results were announced on 9th February, and we are here to explain those and other updates happening around the company and industry that we are observing. Our Q3 did top line of INR 46.18 crores with a PAT of INR 10.65 crores. This shows growth of almost 27% in top line and PAT also rose by almost 16.5% compared to last year's Q3. Our last year's top line was consist of onetime sale of goods amounting to INR 25.74 crores due to change in -- from FOCO to FOFO in our SIS. If you reduce that sale number from the top line of the last year, our sale rose by INR 41.89 crores, that is almost 53 -- 54% in first 9 months and we are really satisfied with this number when we compare this with other -- with the industry growth. Last year, we said that the '25, '26 will be all about the expansion and creating new footprint in coming years. And we also said that we will be opening exclusive sale points or brand outlets. The number we directed in previous calls were not less than 12 locations, and we are happy to tell you that we opened 16 locations in this year. And still, there are a few in pipeline for this year. As on date, we have total 121 point of sales across India. And similar to this year, next year will be again about opening new stores, creating new markets, creating more brand awareness and concreting our presence in growing markets. In last year, we also promised that we will be spending on pan-India marketing. For that, our promoter infused approximately INR 10 crores equity during the year at a rate of INR 970. We are utilizing that money to create brand awareness across India using a variety of sources, including digital media. This market is set to triple in coming 5 years, and we are getting ready to grab this opportunity through all our product lines, whether it is 925 Sterling silver jewelry, 14-carat natural diamond gold jewelry or Utsav fashion jewelry. We are exploring new ways and avenues to take this opportunity to expand our business. With market tripling in this year, one more advantage that we have is that there are very few organized players in this segment and the consumers are moving or preferring organized players for their quality concern and brand awareness. And that should help us grab more market share in years to come. This positive environment ensures us to grow at least by 35% in years to come with good [indiscernible] additional sale point that we are creating. While taking advantage of growing market and expanding our footprint, we are also maintaining our PAT profitability over 20%, which is best in the industry. We are a zero debt company, and we have self-financed all our growth we did until now and intend to continue it with excellent cash balance and current ratio. Our current liquidity is sufficient for another at least 25 EBOs without any debt or any equity expansion. As we always have talked about the philosophy that we will not hurry to showcase the numbers but we'll take thorough measures to create profitable locations and indeed a sustainable model to thrive in years to come. We won't be compromising on quality on any aspect whatsoever while growing at the fastest pace. We will continue our excellent corporate governance also with quarterly results, con calls, et cetera, every year. And we'll take our business to new heights with journey as smooth as possible. This is it from my side. I now hand it over to Mr. Amit Modak to give his commentary and Q&A session. Thank you.

Good afternoon, everyone, and welcome for this investor call. We are giving maximum transparent information from time to time plus quarterly results along with the explanatory statement, quarterly statements, giving the details about the previous quarter, quarter-over-quarter, period-over-period, everything in the standardized format, which is supposed to be of the mainboard entity kind of thing. I hope you must be appreciating these efforts to have good corporate governance through all these things. Before taking question and answer, I want to summarize something. Like Indian fashion jewelry market is INR 10,000 crores today, likely to be INR 30,000 crores by 2030. Organized retail portion is less than 10% currently. So there is a huge scope for the organized sector to expand but only thing with the price point, customer shift is also required because customer shift will happen only when customer will realize that price is not only the concern, the quality and finishing and sustainability for the product which they are buying is also the concern. And it is happening because we are looking that there is a great shift is coming. Silver jewelry has got 4% to 6% CAGR in the market. Fashion jewelry has got almost 11.5%. CAGR driven by Gen Z adoption. Our company is founded in 2021, backed by 193-year-old legacy of P.N. Gadgil & Sons. Brand Portfolio Gargi is a contemporary, Utsav is a bridal and heavy but not having any resale value. Product range includes that Sterling Silver, brass, 14-carat gold and diamond and now recently added 9 carats gold. Our touch points are spread pan-India, and Aditya has given you the details about the number. Recent period, 9 months, if we set off the onetime sale of previous year's number, then the growth is around 52% to 54% somewhere between. Revenue last full year was INR 126 crores. This year's first 9 months revenue is INR 119 crores. That INR 126 crores is without taking the set off for the onetime sale. So it is almost matching. Even if we keep that onetime sale, our growth is going to be more than 30%, including that onetime sale. So if you remove that onetime sale, you will find that growth is far better than the market trend, which is right now. EBITDA is around INR 39.56 crores. PNGS Gargi has got 22.8% PAT margin, 31.3% EBITDA margin. As against the market, I will not take the names of the brand. I have got -- even though I have got the information about this brand, their company name and everything. I can mention the largest competitor in the fashion jewelry or the pocket-friendly diamond brand, they have got 2.7% PAT margin with 5.5% EBITDA. The apple-to-apple company, which is operating in market with us has got a loss-making of INR 58 crores, and they are showing that there is a reduction in loss, and that's why they are coming in profit, which is not acceptable term to me because I only accept the rupee, which can be wrote on the check or which can get reflected in the bank statement. It should not be in the negative or in the bracket on the financial statement that I don't accept that. Then one global brand is there, which has got 11.8% PAT margin with 18.3% EBITDA margin. From all these figures, you can assess the quality of the company in which you have got investment and we are leading that company. It's proud for us. It's a zero debt. Cash balance is almost equivalent to the INR 70 crores, which is in the form of treasury in the form of short-term deposits with the bank. And that is sufficient, as Aditya has said, to expand minimum 25 locations in the coming year without asking for any debt from the market or without asking for the expansion to the equity. Working capital is INR 97 crores for the INR 119 crores top line. Five years CAGR is 95.24% hyper growth phase. FY '25, 150% revenue growth with 23% PAT margin. 150% is always said 100% is the basic and 50% is the growth. That concept, even though for the investment purpose, I'm explaining, actually, it's a 50% growth and basic 100% is there. So we call it as 150%. Nine months FY '26, INR 119 crores revenue. Annualized run rate is INR 160 crores but I will not say that INR 160 crores will be there because last year, onetime sale will not be there. So I can say you will see not less than 35% to 40% growth in any year in the down line, which is coming year in after for at least next 3 to 4 years. Profitable in every quarter since inception, which is exceptional for the fashion jewelry in the market, neither listed nor unlisted, no one is having this kind of the profitability in the fashion jewelry. Fixed asset, it's an asset-light model. From start itself, we are saying it's an asset-light model. So for INR 126 crores last year, top line, we were having only INR 4.7 crores fixed asset. FOCO model 75 inventory funded by the franchisee and investment per store is around INR 50 lakhs versus INR 1 crores to INR 2 crores for other competitors. Minimal CapEx expansion is required. FOCO stores are franchisee-operated company-owned inventory, SIS PNG, which are FOFO, franchisee operated and franchisee owned and retail partners like Shoppers Stop and third-party franchisees. Product diversification, as we have seen in earlier my statement only, it is a silver jewelry, brass jewelry, copper jewelry, Utsav jewelry with the plating, then 14-carat gold studded with the natural diamond. Natural diamond is a precisely thing, we need to keep in mind because very shortly, whoever is selling the lab-grown diamond will not be allowed to use diamond word in their billing or in their sales matter. They need to mention either LGD or stone, not even precious stone. So that BIS standards and BIS notification is coming very shortly. Kids' collection, we have introduced and which is becoming very popular. One company is operating at 5% market share, around INR 3,000 crores. Another company is operating at 1.5% market share, around INR 500 crores. We are operating at 0.15% market share at INR 126 crores. But we should keep in mind the earlier 2, which we have mentioned, they are selling plain gold jewelry also along with their product. If I start selling tomorrow plain gold jewelry, I can beat all these numbers that much, I'm confident. But my main purpose of this fashion jewelry segment is not to sell plain gold jewelry but to sell fashion jewelry, which is a profit friendly and fast-moving jewelry. We have got blessings from 193-year-old brand. Only player with 20% PAT margin, pan-India, 0 debt versus industry norm of leveraging through the equity calls or the debt and FOCO model, superior unit economics versus owned stores. For me, that is a summarization and you can start now your question and answer. I'm happy to receive your questions and happy to answer your questions.

[Operator Instructions] We take the first question from the line of Nishant Joshi from Equisense Advisors Private Limited.

I have 2 questions. First question relates to our distribution system. I believe we have larger distribution in and around Pune, Mumbai or Maharashtra. Do you intend to copy this concentric circle growth in different states? Because as of now, what I've been seeing that we are opening stores in a staggered manner in different states. So would you like to comment on that? And can you give details how much sales come from Pune, Mumbai or Maharashtra area in percentage terms?

Mainly, we have already having presence in almost 13 states. So saying that we are concentrated in Maharashtra now I will not accept that statement because we have started expanding in other states also. Getting good turnover from all these states where we are approaching or establishing new locations will take some time. It will not beat the Maharashtra top line because Maharashtra is our core area of operation where our brand has got very strong presence. And there are many brands who have got strong presence in some specific area, even though they are present in the national scenario as a national brand. If you take their split of the turnover or the top line, they are also having substantially coming from their native brand area and coming -- remaining from the pan-India area. Same thing is here. But yes, we are doing extremely well where we have expanded in last 8 to 12 months. So still, those locations are in position to the gestation period kind of the thing. They need to get matured in a 3 to 4 years' time, and then we can assess whether they are matching with our Maharashtra performance or not. Secondly, the SIS location with P.N. Gadgil & Sons Limited because there is a by default or the generic footfall is there and customer comfort is there. They are shopping at a higher price point or higher level in these 33 locations as compared to other. But my one Pune location or even the 3, 4 locations, which are in Pune outside the P.N. Gadgil & Sons location, stand-alone kind of shop, having stand-alone location shop, they also have got INR 1.5 crore to INR 2.5 crores per annum kind of the top line in a single location. Our recently established Laxmi Road franchisee model, third-party franchisee. They have clocked in the first year of their operation because they started last year on 30th March. So last year, only 2 days, they were working. They clocked till date, almost INR 2.25 crores turnover. That means they will close around INR 2.5 crores by end of the year. Lucknow is doing well. Amritsar is doing well. Then Patna kiosk is there and kiosk is doing equivalent to the stand-alone shop kind of the thing. Indore Citadel Mall is there, which mall is upcoming and still infrastructure is in progress. But yes, there also, we have got good response, and it is also clocking almost INR 3.5 lakh to INR 4 lakh sale every month, which was not expected by us to achieve this kind of sale in an early period. So it is in line. Even the Gurgaon Elante Mall, we started in last February, and that is also carrying out more than INR 5 lakh a month. So I'm not worried whether outside Maharashtra, I can perform or not. On the other hand, I'm confident that it will perform, and I'm happy to say that we have received a very good response even though our brand name was new to the North Indian places. And because Shoppers Stop was keeping our brand within their shops, we become popular pan-India in advance before expansion, and our strategy is working very well.

My second query was that as the industry itself is growing in double digits and organized market is all good, unorganized market is also getting converted to organized on a faster pace. So are you estimating 30%, 35% growth on a conservative basis or as we...

I always say not less than.

Sorry, sir?

I always commit not less than. Not less than means that much I am getting bound to do. I will say not up to 45%. Up to 45%, even if I perform 19%, I will say I said up to 45%, it comes 19%. But I'm getting committed myself by saying not less than. That is more important for me. I'm also from the finance background. So anybody saying not less than is more important for me rather than up to. So my -- all commitments in every call, earlier call also, I commit every number not less than. So my growth will be not less than 35%. You said double digit. So I mean double digit, very well in double digit.

And sir, any rationale that why Q3 was...

Because I saying I can grow at 50% and next year saying, sorry, I don't accept that kind of thing. So I say always not less than because this year, I have grown by 53%. I can say I can grow by 50% but I will not say that.

Maybe I appreciate that, sir. I just intend to say that any rationale, you can give for why quarter 3 was in line with quarter 2. This was a season wherein a higher sales could have. Any reason for that, sir?

I will reply this question. But before that, I will address to all the investors that I perform for the year, not for the day-over-day, week-over-week, month-over-month, quarter-over-quarter. So if you compare 9 months over 9 months, why to quarter-over-quarter. My growth is 53% -- and now come to the Q2 to Q3. Q2 start ended with the festival start, 10 days of festival were there in the Q2. If you remember, it started around 20th September this year. So out of 45 days festival days, 10 days were in the September month. Secondly, there are some FOFO models where franchisee-own franchisee operated, where I need to move inventory for their purpose well in advance. I cannot move it a day-on-day basis. So almost 60% inventory required for their festival sale was moved in Q2 in last 10 days. So that sale got booked there. And even though irrespective of that, I have shown overall growth. So if that sale would have happened in the first week of the October, subject to festival starting after 1 week of October, my sales would have been higher by 45% in Q4 to Q3.

We take the next question from the line of [ Di Shah ] from Sapphire Capital.

Yes. Sir, so I think this -- how many stores are we planning to open for the next year?

Last year, I said not less than 12. Right now, I have already opened 16, and there are some in pipeline as Aditya has given in his explanation. Next year, I am saying not less than 20, but up to 25 to 30.

And what geographies will you be targeting?

Pan India, except South, [Foreign Language] because there is a popularity for the pure gold jewelry. So we are targeting first North India where fashion jewelry or costume jewelry is very much popular.

Okay. And what sort of CapEx per store do we see?

Around -- for us, if it is a franchisee model, because franchisees do all things, that is a CapEx for the furniture fixtures and rentals, rental advances and everything, we need to keep the inventory only. So to the extent of inventory, if it is only for fashion jewelry of the silver, then CapEx is required INR 25 lakhs to INR 30 lakhs. If it is including diamond, then CapEx is required around INR 50 lakhs to INR 60 lakhs.

And if it's not the franchisee model then...

Then if my own store is there, I require INR 1 crores because infrastructure I need to create on my own. And generally, when we create our own franchisee, it has got a little bit different look because our brand value gets involved there.

And sir, so the new store openings that we are planning any sort of split between the franchisee model and our own store model?

Right now, we have got almost 90% plus our own stores or the stores operated by our master franchisee, you can say that is a parent company, P.N. Gadgil & Sons. So third-party franchisee, we are very much cautious before giving because if they start and afterwards, they say that it is not becoming viable, we want to quit, then it becomes passive expansion for me because I have got legacy of 190 years with a USP that not a single shutter is down.

Right. Okay. And sir, just on the EBITDA margins, we've seen some expansion Q-o-Q. Where do you see these margins? And what sort of steady-state margins do we expect?

On the COGS side, you can expect COGS to the level of 53% to 55% and PAT margin somewhere between 20% to 22% [Foreign Language].

Okay. Okay. And sir, just on the marketing expenses, what sort of -- so the expenses as a percentage of revenue, what sort of number will we target there?

Last year, first 9 months, we have spent on marketing, just a minute -- we spent on marketing last year first 9 months, INR 364 lakh. This year, first 9 months, we have spent almost INR 6.75 crores. So it is almost near to double. And we are mainly targeting social media marketing through Insta or the YouTube or the influencers created AVs.

So this INR 6 crores to INR 7 crores is the sort of annual number, can we see going ahead? Or do we see it inching up further?

Wherever I will have expansion, I need to create a marketing buzz for a certain period for creating footfall and creating awareness about the same. So till the time I'm expanding, this spend is going to be remain annually somewhere between INR 7 crores to INR 9 crores.

Okay. Okay. All right.

And our promoter have contributed separately INR 10 crores at INR 970 per share, exclusively for this marketing purpose. If you refer to the recent preferential allotment, the object was for spending on marketing purpose pan-India.

We take the next question from the line of Saurabh Kumar from Scientific Investing.

First, thanks a lot for setting up such a great corporate governance in SME. Though I am invested in your company for the last 6, 7 months, it's very impressive. Sir, I have a few questions. First question, sir, in terms of unit economics and just right now, you said if you are setting your own exclusive store, around INR 1 crore is required for inventory and CapEx. So if you take your existing stores at mature level, how many stores can fund this new store? [Technical Difficulty]

No, your voice was breaking and...

So sir, I'm looking at the mature level profit of your exclusive store. Just to come at a number that to open 1 new store, how many stores need to contribute through internal accrual? What is the profitability of unique exclusive store at maturity level?

It depends what rental I am taking. [Foreign Language] So there's not any hard and fast. But if I invest on my own for INR 1 crore CapEx with CapEx plus inventory and within 2 years' time, it gives me ROI on my investment basis somewhere between 20% to 25%. [Foreign Language]

Okay. This is cash profit, sir, after factoring working capital.

No, I'm talking about PAT profit. [Foreign Language]

Okay, sir. Second, sir, in terms of expansion strategy, like there are Tier 1 cities with very high 1 crore population, then you have Tier 2 cities in like 25 lakh, 30 lakh population, then you have smaller cities. Do we have any strategy in mind that we will restrict to a certain minimum [indiscernible] is one. And city like -- let's say, a city like Pune, what is the total number of stores you see there is a possibility to open x number of stores at maturity level?

In Pune, Pune can accommodate not less than 40 stores. It has got 70 square kilometer area, and Pune has got population of 80 lakh plus. And many surrounding places are becoming the suburb of Pune. Right now, we have got almost, I think, 15 or 16 locations within Pune. So there is still scope to expand in Pune. [Foreign Language] If I will keep on expanding in Pune first, investor will start asking me why you are not going outside. So I'm keeping mix. [Foreign Language] so that becoming brand, it is necessary to spread everywhere. I cannot concentrate in single area. Investors are also right because they want a brand perception, brand presence everywhere. So we are trying to create a brand presence along with profitable location. So it will be a mix. [Foreign Language]

Got it, sir. Got it, sir. [Foreign Language] in every state there is a different language [Foreign Language]. Some companies in the past, they have suffered because of aggressive expansion. And we are going pan-India but in fashion jewelry. So how is your reading of fashion jewelry market? There also, every state is different or once you have built a design strategy, you can apply it across North India or West?

Generally, in fashion jewelry, there are no different design from Kashmir to Kanyakumari. Fashion jewelry has got some standards. [Foreign Language] for plain gold, it is there. [Foreign Language] But for fashion jewelry it is not like that. Fashion jewelry is a Gen Z jewelry [Foreign Language].

Got it, sir. Got it. And sir, for these 2030 -- sorry, stores, which you told you will be expanding, and we have a marketing budget also. Are we looking for any further dilution?

No. As I said, in coming at least 18 months period, I'm not requiring any dilution or any debt for funding the expansion company-owned or third-party franchisee. For everything, I am prepared because on own, when I make a store, as I said, INR 1 crore is required. And I've got treasury of almost INR 70 crores. And I'm too conservative. That's why I can keep that treasury. Whatever earning is there, I'm retaining it very properly and very carefully.

We take the next question from the line of Rajesh Singla from VTG Capital.

First of all, thank you for maintaining sir, top-class corporate governance, which we have maintained so far. And so far, we have grown at 2x to 3x versus the industry growth. And considering the strong expansion plan, which we have, we are looking forward to strong growth in the coming years as well. So my couple of questions, I will go one by one. So probably first question would be like how are we managing silver prices? Like can we say that -- maybe just your silver pricing strategy, if you can tell a bit of that?

First of all, we are not selling on the grammage basis. We are selling on MRP basis. So silver prices, if you go with the 1 gram top [Foreign Language]. One thing. Secondly, government has banned importing silver jewelry ready-made silver jewelry. Up to 31st March '26 at first level, they may extend it. And with taking into that consideration, we have already established our own manufacturing setup within Maharashtra with many [indiscernible] have got expertise in 9-carat, 14-carat gold jewelry export. So they have got very good machinery available with them. With using their expertise and machinery and setup, we are manufacturing their silver jewelry, which is equivalent to the imported silver jewelry, and we are getting cost benefit also that you are watching that COGS has come down from 56% to 53%. So that benefit is coming out of our indigenous manufacturing process. Silver price is very comparatively irrelevant because if you take INR 15,000 item which 10 gram of silver, today, 10 gram of silver is costing you, even at INR 4 lakh, even if you consider it is INR 4,000. So main is a mark of finishing, design and marketing. So silver prices are not going to directly impact. But yes, we are saving on silver prices because we are timely procuring it. And I cannot disclose it explicitly but keeping in mind, whatever stock is valued, it is at the average purchase price, not at realizable price. And realizable price is far better as compared to the 12 months back. So margins are likely to improve.

Right. My second question would be on the share of silver jewelry or silver items in our total revenue. Like what -- so how that share has changed over the last 3 years? And where do you see that changing in the next few years, sir?

See, I can -- in percentage, if you want, I will give you just a minute. It is at 38% of the diamond jewelry.

For this year so far, right?

Up to 9 months, first 9 months. And 57% is a silver jewelry. And I am expecting it to become almost 45% of the diamond and 55% of silver by H1 of next year.

Right. So the share of diamond and basically gold jewelry is increasing. And what would be the ticket size, normal ticket -- what is the normal ticket size?

Normal ticket size in diamond jewelry, it is INR 15,000 to INR 25,000. If anyone buys say like your necklace with tops or necklace with bracelet or necklace with fingering, that kind of combination, it goes up to INR 125,000 also. And generally, during this Valentine period, we keep certain -- this kind of design, and we have seen good traction for this design in the last 2 years. This year also, we are likely to see.

Right, sir. Great, sir. And last question would be on the marketing spend. So we have spent a significant amount this year so far. So should we expect a good amount of benefit or yield from this marketing spend in the coming quarters, given that your new stores might have started already generating revenue driven by the strong demand, which we have seen so far as well as the marketing -- aggressive marketing, which you have done?

[Foreign Language] It very difficult. But even if I will take some celebrity for marketing, whether that celebrity will be acceptable or not one thing, whether that celebrity will come in some controversy in future and that will hamper negatively on myself even after spending, that is also difficult. But yes, we are spending on the marketing with very thoughtfully. [Foreign Language] So it gives a good return on that. But I will never say that whatever I'm making 20% PAT out of that 3% PAT is coming because I'm spending on marketing, that kind of thing I will not -- never say or comment [Foreign Language]. So -- but yes, we will have effective marketing for creating more and more awareness for our brand. And in last con call only, I have mentioned very precisely that next year, we will spend largely -- means next 2 years, 24 months, we will spend largely on the pan-India marketing. [Foreign Language] w we are spreading pan-India. So for getting awareness about our brand, we require that kind of marketing. So as I said, it is double as compared to last year and promoter have contributed to it.

We take the next question from the line of Ajay...

With permission, sir, can I take one e-mail question, which I have received because that person is not connected, I think, in the QR. He is the -- yes, yes, he is there. [ Rahul Somvanshi, ] we take him on the top so that I can finish the questions which he has asked because he has sent the mail.

Sure, sir.

Rahulji, you are listening.

Yes, am I audible?

Yes, you are audible. So Rahulji, your -- that question about the Q3 sale and all this things, I think you have received the answer in the first question -- person [Foreign Language] I hope. So your questions were mainly regarding the Q3 lower growth. I will not say lower turnover. It was a lower growth as expected growth for the people, but it is as per the expected only, but partial 10 days for all the store was in September. And for FOFO stores, 60% of their festival sale was sold in the 10 days of the Q2 because I need to transfer stock to them by billing [Foreign Language].

[Foreign Language] our brand profitability...

There is a growth, sir. I'm looking that there is a growth because I'm taking statistics from FOFO model also, how much they are selling to the customer and their B2C plus my own store B2C, if I sum up, it is -- it was almost a good larger number since I have not mentioned it here, but I can communicate you on the separate mail because I need to calculate it separately, and I have to quantify it separately because right now, it is not in the audited statements of the account. I cannot give some number with my own thought process as a gross or approximate number. I will communicate you. But I can assure you all that the sale in Q3 or the festival sales was definitely good at higher number, and it is matching to our growth.

Perfect. [Foreign Language]

Yes. Yes. Continue.

[Foreign Language]

[Foreign Language] I'll definitely disclose that number.

[Foreign Language] it's easy to enter because of the third-party manufacturing are available, right? [Foreign Language] So how are we different from them? [Foreign Language] I think, you would have seen that, I think, [Foreign Language] any because one the bigger brands similar to the Maharashtra, right? [Foreign Language]

No, if you tell me about the brand name, then only I can comment about it.

[Foreign Language]

Litestyle is plain gold jewelry it is not a fashion jewelry.

[Foreign Language]

[Foreign Language] that is not competing with us as far as top line of our business is concerned about fashion jewelry. And as I explained, there are many brands but they are not matching to us in the profitability, in the variety. We have got 190-plus year experience. We are not a startup. We are not IITL starting jewelry business. We are hardcore jeweler or the [indiscernible] are entering in the business. So our knowledge age will be far better than any -- other than the shop kind of the experienced person. [Foreign Language] they want to create a number, whether it is profitable or not, it is immaterial. But since we are hardcore business people [Foreign Language] rather than top line unless something is going to make profit, we will not enter into it.

Thanks for your corporate governance. This give us the confidence, right, irrespective of what is currently happening in the market.

We take the next question from the line of Ajay S, who is an individual investor.

Sir, I have a question. So we have been maintaining the EBITDA margin around 30% consistently. So if you look at other brands, they're able to maintain around 12% to 15%. So what is that we are doing differently in our company such that we are able to maintain these margins.

[Foreign Language] We have a 190-plus year legacy promoters [Foreign Language] All these new people require to spend on marketing, which I call as a cash burn. That's why their profitability is low as compared to ours. So that is an advantage to our brand, advantage to our company and blessing to our company.

Sir, but if we have to expand outside of Maharashtra, is our brand visible? I mean, do we have to do more on marketing?

So we have started doing that. Last year only, I told that next year and next to next year, we'll spend double or triple on the marketing. This first 9 months vis-a-vis last year's first 9 months, we have spent double on the marketing. Because I know that we are a regional brand. So in Maharashtra, Gujarat, Karnataka, we are well known, very well versed with the people. But when I will go to north like Lulu mall, Lucknow or the Lucknow High Street or NCR or Gurgaon or the Pitampura Delhi or the Patna or the Bhubaneswar or Jaipur or Indore, I need to create awareness to the people, and I'm doing that. And that is giving me the good returns also. But that I will not spend just like a mad. Cash burning, I will not do.

Got it, sir. So because of this, do you see or do you expect any contraction in EBITDA margins? Or do you expect the same margins to continue? Or you see an improvement?

I always talk about the PAT only, sir. I will talk only about PAT. You will see PAT between [Foreign Language]

Got it, sir. Sir, recently, there is a note that the company has released about PNGS Reva diamond jewelry. If you can talk about what are the product mix of Reva diamond because also you have recognized as a group company, PNGS Gargi. So in PNGS Reva diamond.

Group company classification is because of the related party transaction. Otherwise, there is no group company kind of thing. Because in Reva jewelry, some location, we may start selling Gargi diamond jewelry also because Reva diamond jewelry, DRHP, it is sale, it will be a multi-brand store also. So in some store, we may sell it. It is not necessary that every store will sell, but we may sell in Tier 2, Tier 3 city under Reva, Gargi fashion jewelry, diamond jewelry.

Okay. And that will be a shop-in-shop, right?

No, no. As it is -- Reva is a shop-in-shop. So in their inventory, we may keep some affordable inventory or fast-moving inventory on which we will get commission from -- means I'm talking in the contest of Reva. So I'm saying we will get some commission from Reva.

Okay. Sir, and one last question, sir. And so we have 3 formats of Gargi, right? One is franchisee, one is shop-in-shop and one is exclusive brand store. In the future or in the next report or any time, could we get the breakup of each format.

Yes, definitely. In annual report, I will give them. Because in another 2 months' time, you will get annual report, that time you will get that.

We take the next question from the line of Kiran, who is an individual investor.

I have 3 questions. First one is regarding 9 carat gold. It was started a couple of months back. Can you please update us in terms of how is the progress?

It is only 3 months back, it has started in Navratri. First time it was started in Navratri, and it is getting good response as new product is introduced. And it is -- that 9-carat gold jewelry is not available in 33 SIs of P.N. Gadgil and Sons because it is a conflict of interest for their business. Other than 33 location of P.N. Gadgil and Sons.

Okay. So it's only for exclusive or...

Exclusive franchisee or exclusive brand stores. And I can tell you 1Q on gross weight basis, we have already sold 9 carat jewelry.

Okay. Okay. Great. Great. The second question was regarding main board listing. Last time we discussed, you mentioned that by December, January '26, we can become main board company, right? So can you update us on the progress of that?

So last time when we conducted meeting that some criteria got changed in April, May '25. Like earlier, it was said previous 3 years positive profit, means positive result. Now they are saying minimum INR 15 crores operating profit in every year. So if you calculate '21, '22, '23, '24 and '25, in that '21, '22, I was not having that INR 15 crore operating profit. Now '22-'23, '23-'24, '24-'25, '25-'26. So when I completed '25, '26, I will have previous 3 years more than INR 15 crores operating profit I'm eligible because as it is, I have got more than that minimum number of shareholders. Right now, company has got more than 2,500 shareholders. More than INR 100 crores net worth, that criteria is also fulfilled. So we can get listed in main board after the declaration of results for 31st March, and it is on the track. We are preparing for that. And you will get it to see if everything goes correct to the regulators and everything. By September '26, you will see ourself on the main board.

Okay. Thanks for the update. I didn't know the change. So I was wondering whether it will happen this month or next month. Okay. And the third question, again, I will leave it to you whether you want to answer it or not. This was related to our associate company or Reva. Now the DRHP was filed a couple of months back, but we didn't hear anything about listing. My question is purely related to Gargi because last time when we discussed, you mentioned that Reva expansion has a benefit for Gargi because Gargi will be able to sell our jewelry over there, as you mentioned just now also, right? So hence, I'm interested in Reva listing. So any update on that, if you can share?

So it is already on public domain that issue is opening on 24th of February and tentative listing date is the 4th of March.

We take the next question from the line of [ Paras Kakkar ] who is an individual investor.

My questions have been answered well.

We take the next question from the line of Rahul Kumar Paliwal from Shefa Family Office.

Sure, sir. But I have to congratulate on excellent financial prudence with INR 70 crores of treasury in place, industry-leading margin, ROCE, ROE in tune of 25% to 30% and with just 0.15% of market share. So things are going like dream for investor, any investor. So congratulations to the team. I have 4 questions, sir. So one is like AI is now impacting IT jobs, okay? That is for sure. And that can impact Tier 1 consumer sentiments. So how are you assessing the risk? Can I put all 4 questions or one by one, I should go. Sure. My second question is, apart from Mithila, are we planning any other male or female model, which can be a better marketing expense ROI-wise, probably. That's second question. Any comment on in-house manufacturing capabilities, which can be an added advantage? And are we trying with any other metals in the jewelry and any other cross-selling opportunity in Reva because there, the customer will come with a higher budget in mind and the higher ticket item of Gargi can be sold out there. And my last question is the snowballing impact. Where we can -- that impact is like where we can drive the next year growth with the profit of last year. So like opening the number of stores with the profit of last few years, the snowballing effect, can it be fair to assume can be played around INR 300 crores of top line with the operating leverage kicking out by maybe '27, '28?

Operating profit or PAT?

Operating leverage may be kicked out by '27, '28 with a top line of INR 300 crores. So that snowballing can play out like running the -- opening the new stores with the profit of last year. Where we don't have to dilute the equity in other words, actually.

So you must appreciate that I have conserved the entire earnings of the earlier year, and that make the treasury right now because whatever was raised in the second round of QIB, that the first round of QIB and second round of QIB is almost getting consumed. So whatever is remaining is -- so accumulated profits only of the earlier year. So those will be used for the expansion. No debt will be there, no expansion in equity will be there, at least for the next 18 to 24 months. Secondly, you want to know about the metals. But yes, we are -- that 9 carat is something kind of using other metal only because in 9 carat hardly 37% is gold, remaining is alloys only. And right now, there are research going on in the industry. I cannot pronounce the name of the metal because I'm in the industry so I need to keep the confidentiality of it. But yes, we are trying about it. And if successful, we will definitely introduce but high polish means [Foreign Language] but don't take any of my -- this statement as something concrete statement [Foreign Language] so this is just what is going on, I'm briefing you without any time line commitment. Then Mithila for us, she is reasonable for our regional brand assets and she is known on the web series pan-India also. So I can tell you probably one Sharma from a very prominent banking sector came to us for some other work. She said [Foreign Language] I'm not an internet savvy or techno savvy, I don't have even Facebook account or Insta account or anything. But since she has given this compliment, I will say, okay, that means our model is okay. And we have extended contract with her till July '26. Then again, if she continue or anyone new comes, we will accept it. But your question about ROI earlier also, I think you were not there in queue. You joined a little bit late. I replied that advertisement or marketing ROI [Foreign Language] and concept is only spend without expecting anything. If something comes, it's a bonus for us. So -- but yes, it is showing the effect because 0.5% PAT is improving. So we can say that it is because of the marketing [Foreign Language] Again, whether it is ROI or negative ROI, I don't understand. AI, yes, definitely, the software industry is going to hit with the AI. There will be loss of job and everything. But it happens every time in 2000 Y2K was there or earlier 1985 to 1995 there was a threat because of computer loss of job and everything. [Foreign Language] So date changes, time changes, things changes so we need to take it as something new challenge. But I don't think that it will reduce the consumers buying power drastically [Foreign Language]

Got it. And just a correction. I was not asking about replacing Mithila, but adding another male or female -- yes, okay. Got it.

[Foreign Language] And kids jewelry has got good response.

Got it. And any idea about Reva cross-selling and on this front male side, just give us some innovative product like pulsar definitive male. I'm sure this category will surprise you. We have lot of -- right sir. Reva side, if you can comment cross-selling...

Reva, if you excuse me, I will comment because there are N number of regulatory limitations you also understand. You can also understand. And right now on the public domain so I'm restricted to talk only within the DRHP or RHP content. So I will request you to give the part...

We take the next question from the line of Rajesh Singla from VTG Capital.

All my questions have been answered. [Foreign Language] There are other people who are entering in this industry, they are exploring like premium watches or premium scent or any other kind of premium clothing as well. So any like maybe in the...

Parent company introduced onetime past watches, and we need to write off a few crore rupees because those watch companies are not giving us stock on sale or return basis. So it is a very high-risk business and cash burn business.

Yes. Great. I think investors are -- I think probably most of us are quite comfortable with the management acumen as well as their strategy for growth. So nothing to worry on that front. It's just that it's always curious to know like what management is thinking.

Yes, definitely. But wherever we have got already experience, I will also explain to you that we have already experienced this. Instead of saying, yes, we will try kind of thing.

We take the next question from the line of Anand [indiscernible] who is an individual investor.

Congrats on very good numbers and great corporate governance. My first question is on the same store growth. Like how has been the -- on the PNG side as well as on the EBO side, how has been the same store growth, sir, for 9 months?

PNG side, it is not less than 25%. And on EBO side since these are new EBOs. All our EBOs are new. [Foreign Language] Because it is not going to get repeat. [Foreign Language] that doesn't mean there is a 200% growth or 300% growth because it's a one time -- that is our experience as far as previous all things are seen. [Foreign Language] If you go and average out, the SSG will not be less than 25%.

And on the diamond jewelry side versus the silver, like how is the margin differential between these 2 segments? And like you are telling that next year, the diamond jewelry proportion will go up. So like how does it impact the overall working capital as well as the margins?

In diamond jewelry, gold component has got lower margin. This year, we got good margin because of the rate appreciation in gold. But on diamond front, there is a good margin, making charges, there is a good margin, which is compensating no margin on the gold. So overall, it is matching with the silver jewelry only on a granular basis. If silver jewelry is giving say gross margin of 55%, this may be giving us 45% to 47%.

Okay. And this diamond jewelry is only sold in the EBO stores or even in the PNG stores.

No, no, even in main stores also. PNGS store also, we are selling jewelry Gargi diamond jewelry.

We take the next question from the line of [ Madhav Malpani ] who is an individual investor.

Sir, congratulations for amazing set of numbers. Sir, I have just one question with respect to Reva and Gargi. You just mentioned that Reva will be selling a few products of Gargi. Sir, just taking a hypothetical example, a customer walking into the store choosing Gargi at around -- suppose a ring of around INR 40,000. And if he gets a better option at around INR 60,000 of Reva, the same diamond ring, different. So wouldn't that be in conflict of interest, sir? The customer...

Selling Gargi jewelry in Reva is not my prime object. It is an additional avenue for Gargi diamond jewelry because Gargi has got its own store. Gargi has got P.N. Gadgil and Sons. So Gargi's expansion or Gargi's profitability or sale is not depending how Reva will sell Gargi's jewelry. So it will be an additional option available to the customer. It is not competing to each other. [Foreign Language] That is not my prime object. My prime object in Reva store will be to sell Reva jewelry, not Gargi's jewelry.

Right, sir. Sir, and another thing I just want to ask is, is there any strict distinction that the Gargi will be holding only 14 carat and anything above 14 carat won't be included in Gargi?

No, no, 14 carat why? To make it affordable. 14 carat is not something classification. 14 carat means affordability because gold value in that 14 carat thing will be lesser as compared to 18 carat content or the 22 carat content. [Foreign Language] In Reva, we will be selling 14 as well as 18 as per choice of customer.

Okay. So same will be applicable to Gargi also even in Gargi...

No, in Gargi, we are not keeping at all 18 and 22 carat because there it's a fashion jewelry store. So it has to be affordable, pocket friendly. So with 18 carat, 22 carat that pocket friendliness will get removed. Thanks to all for joining, and I will ask Hiranyamai to conclude the meeting. Thank you.

Thank you so much, everyone, for joining the meeting. I hand over the call to Ryan now.

Thank you. On behalf of PNGS Gargi Fashion Jewelry Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.