RBZ Jewellers Limited (RBZJEWEL.BO) Q2 FY2026 Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Q2 H1 FY '26 Earnings Conference Call of RBZ Jewellers Limited. [Operator instructions]. Please note that this conference is being recorded. I now hand the conference over to Ms. Hena Khatri from Valorem Advisors. Thank you, and over to you, ma'am.

Thank you. Good evening, everyone, and a very warm welcome to you all. My name is Hena Khatri from Valorem Advisors. We represent the Investor Relations of RBZ Jewellers Limited. On behalf of the company and Valorem Advisors, I would like to thank you all for participating in the company's earnings conference call for the second quarter and the first half of the financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in the -- today's earnings conference call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's beliefs as well as assumptions made by, and the information currently available to the management. Audiences are cautioned not to place any undue reliance on these forward-looking statements in making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and the financial quarter under review. Let me now introduce you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Harit Zaveri, Joint MD and CFO of the company; Mr. Harshit Gandhi, Internal Financial Controller; and Mr. Bhavesh Sabhnani, Senior Manager, Accounts and Finance of the company. Without any further delay, I request Mr. Harit Zaveri to start with his opening remarks. Thank you, and over to you, sir.

Thank you, Hena, and good evening, everyone. Welcome to our earnings conference call for discussing the second quarter and the first half of the financial year 2026. Before I give you the financial and the operational highlights of the period under review, let me first start by giving you a brief overview of the company for some of those participants that may be new to the -- to our company. RBZ is one of the leading organized manufacturers of gold jewellery in India. We are a unique jewellery company with diversified business model, wherein we offer products to national retailers on wholesale and job work basis as well as direct to customers from our flagship retail store in Ahmedabad. We have a state-of-the-art manufacturing facility equipped with advanced casting, laser and 3D printing technologies, which is supported by 200-plus professionals and 250 skilled artisans. Because of our manufacturing setup and presence across both Wholesale and Retail segment, we are able to garner better margins than our peers. We offer a diverse range of jewellery collection comprising of different manufacturing techniques and varieties, but our specialties lies in antique gold bridal jewellery. Our flagship showroom Harit Zaveri Jewellers in Ahmedabad offers bridal occasion and daily wear jewellery across diverse price ranges. The retail product portfolio features a diverse selection of gold studded and other jewellery, including bangles, chain, necklaces, rings and earrings, et cetera. We are also planning to expand our retail presence in Rajkot, Surat and Baroda as well. Now coming to the financial highlights for the second quarter of the financial year 2026 under review. Despite gold price touching lifetime high, we remain aligned with our revenue guidance. Revenue from operations from -- for the second quarter stood at INR 145 crores, marking a strong growth of 24% year-on-year and 92% quarter-on-quarter. This performance was driven by successful new launches of design, productivity improvement and positive consumer sentiment from early onset of the festive season. EBITDA for the quarter rose sharply at INR 28 crores, an increase of 105% year-on-year and 118% subsequently, with margins expanding significantly up 766 basis points Y-on-Y and 230 basis points Q-on-Q to 19.5%. PAT for the quarter stood at INR 19 crores, reflecting a robust growth of 130% year-on-year and 162% quarter-on-quarter with PAT margins improving 12% -- to 12.82%. For the first half of the financial year 2026, our revenue from operations stood at INR 221 crores, reflecting a healthy growth of 11% Y-o-Y. EBITDA came at around INR 41 crores, up 47% Y-o-Y with margins expanding by 455 basis points to 18.62%. Net profit for the first half is INR 26 crores, growth of 50% Y-o-Y with PAT margins improving to 11.64%. In terms of segmental performance for the second quarter of the financial year 2026, our retail revenue stood at INR 87 crores, registering a growth of 18% Y-o-Y. Wholesale revenue came in at INR 56 crores, up 40% compared to the same period last year, while job work revenue grew 22% at INR 3 crores. For the first half of financial year '26, retail revenue grew by 11% Y-o-Y to [ INR 132 crores ]. Wholesale revenue increased 11% Y-on-Y to INR 84 crores and job work recorded a healthy growth of 17% year-on-year to INR 4 crores. We closed the first half of the year on a very strong note, driven by robust traction across both occasion and daily wear. This growth was supported by evolving consumer preference and enhanced product offerings and early offset of festive season. During the period, we actively participated in multiple exhibition to strengthen our market presence, 5 national level B2B exhibition and 7 B2C exhibitions, significantly enhancing the brand visibility and customer engagement. We have also launched several impactful digital marketing campaigns showcasing both our festive daily wear collections in occasion wear campaigns such as Chaand, [ Rangat ], Navratri Bridal and Akshaya Tritiya festive highlights. Our exclusive Gold, Polki, and Antique collections were there. In daily wear campaigns, Humsafar and [ Rozana ] celebrated lightweight elegant collection for everyday use. Our retail expansion front, encouraged by the strong performance of our Ahmedabad showroom, we plan to strengthen our presence in Gujarat by expanding in other key cities such as Rajkot and Surat, with at least one of them opening in the quarter 4 of this financial year. Building on our strong Q2 performance, we remain focused on accelerating growth across segments. Our continued emphasis on design innovation and well-diversified product mix and operational excellence positions us well to drive sustainable growth in evolving and dynamic market environment. We are witnessing encouraging demand trends and expecting robust consumer traction during the upcoming wedding season in retail, particularly led by strong interest in occasion wear category. However, while the overall demand looks -- remains positive, we are also cautious on the revenue trends given the recent volatility in global precious metal prices. With this, now I open the floor for question-and-answer session. Thank you.

[Operator instruction] Our first question comes from the line of Sahil Patani from Strokes Capital.

Congratulations, Harit, on a very strong quarter. I wanted to understand in the presentation we mentioned that RBZ has about 1% market share in the organized wholesale gold jewellery market, right? So, since this industry is like so fragmented, what are we kind of doing to consistently gain market share in this business?

So, Sahil, thanks for asking the question. And, correct, we have 1% market share when it comes to organized occasion wear category. Given that we are also -- you're talking about market penetration. So important thing would be launching of new designs and that we have been doing so since now many years. The design team is efficient. We are having a very organized approach when it comes to approaching season, building up capabilities in terms of -- are there -- on a month-to-month basis to understand that seasonality is there, there can be a demand pressure and can we handle the demand pressure. So, generally, market penetration right now because of higher gold prices are done by reducing the weight and not compromising on looks, or enhancing the looks also. So basically, reviewing the trends and forecast. That right kind of IT infrastructure is essential because organized players would demand delivery at a very [indiscernible] period -- in a very short period of time. So, the inventory blockage is low. So, for that, we need to have a right kind of an infrastructure that can facilitate, give us right kind of reporting so that the whole supply chain of manufacturing can be right in place. So obviously, productivity optimization will be one of the scenarios. But on the penetration side, again, we can do exhibitions. We have already received a warm response when you do B2B exhibitions. So, if you see, you can clearly understand on the first half of the year, we have done 542 kgs. That is almost -- we have not degrown on our volumes. So, when you say when we are -- we have not degrown on our volumes or we are volume positive in the first half, that actually speaks about the strength and the robustness of the company, right? Because gold prices has risen now 50%. If any company tells that, okay, I'm 20% revenue positive, that clearly -- and they don't have job work in their portfolio as offerings, that clearly indicates that they are minus 20% on, let's say, volume terms. But when we say that we are volume positive, even marginally, that speaks robustness about the company and its right kind of penetration strategy. But overall, to answer, design emphasis, lightweight design for not compromising on looks and strengthening the operations via IT and other productivity measures.

Understood. Now my second question is, usually, given like the second half, H2 is usually stronger for us -- the halves. And with the festive and the wedding season, I think we have guided for about INR 700 crores top line for the whole year and INR 45 crores bottom line. And we've already done INR 26 crores in the first half. So even if we just match that, I'm pretty sure you'll beat your own guidance. So, do you want to update that? Or do you want to stick to the INR 45 crores PAT and INR 700 crores top line?

Sahil, actually -- see, what is -- what we are right now seeing is more and more corporates are going towards this gold metal loan. So, when they are going to gold metal loan, the emphasis are coming in job work. So right now, let's say, last quarter, Y-on-Y basis, quarter 2, we have done 163 kg of job work, versus this year, we have done 249 kg of job work. So, there's a very high, steep increase in job work. Now, our consumers, those who are corporates, basically have GML facilities and they want to do work with us on job work model. And we are also preferring those models because we get the gold prior to the dispatchment. So, in this case, if you see, the top line might get shifted, but the volumes will support it. Let's say, if I'm not doing 700 top line, but that, let's say, 10 kg of order which has come, has not come on the sale basis. It has come on the job work basis. My profitability would still remain same, but my top line would shift. That's why if you see the top line is not -- has only grown about 25%. But overall, the volumes are flat. So, the company has grown in its original -- on an ideal way about 50%. So, with that keeping in mind, bottom line at INR 45 crores is -- I think now it's -- as you already know TTM level, it is INR 47 crores. So let us -- and the environment is quite dynamic. Let us not revise it. Let us understand quarter 3, how is it rolling out. It is pretty good actually in terms of retail. It is going very strong. So let us hold on to the next quarter until any other revisions. It will be too early to revise any of [ them ].

Yes. That's fine. Sir, just one last question. How is the Diwali and the whole festive period for you? And I know that we have like 4 stores that we are trying to open over the next couple of years. How -- what's -- any update on that? I know one of them is supposed to come in Q4 itself. So, if you could just provide an update on that? And how was the whole festive period for you?

Yes. So, if you talk about festives, Navratri was early, like it was seen quarter 2 this year, the start of Navratri. And it was a good festival season. In retail, we saw a very strong ticket size upgradation and there were customers coming in and despite the gold prices moving this high. So, we are able to -- I think quarter 3, when the results will come out, you will really see that the retail has done fairly a good job because quarter 2 is dominated by job work that is on the B2B segment. But quarter 3 will really have -- I think retail is doing fairly well. I mean, to answer your question, festive season has really gone good. We have seen a strong growth despite having only one single store. And because of the strength that the store has really done well, we are so confident to develop another coming couple of stores and then adding up 2 more. So, yes, so festives have gone good and the coming store rooms of 4 stores, one is in Rajkot, Surat, and then another 2 stores are in pipeline. We are understanding what kind of thing. But the overall intention would be to really become a good player on a retail front in Gujarat. So can we really go forward for further strong expansion of stores. And in terms of Rajkot and Surat, those stores are the largest -- one of the largest in their respective cities. So, 10,000 square feet carpet area each, there is minimum. Rajkot might be a little bit larger. So, I think we are aggressive in terms of store expansion. And the Ahmedabad store is showing us that reflection that it is growing despite having the same store high numbers, still we are able to grow at xyz percent. So, it is showing us that confidence.

Again, congratulations on a strong set of numbers and hopefully, we continue this trend for the remainder of the year as well.

Our next question comes from the line of Deepesh Sancheti from Maanya Finance.

Congratulations on a great set of numbers. My first question was regarding -- am I audible?

Yes, you are audible Deepesh.

Okay. My first question was regarding the number of showrooms. You mentioned that you opened 4 showrooms. You already mentioned 3 names, that is Rajkot, Baroda and Surat. What is the fourth location?

So, Rajkot and Surat is finalized. Baroda being a major economy, we are surely wanting to open that. We are looking for locations. But on the broader guidelines, we want to -- see, there are many places in Gujarat, right? So, we might be looking to add a couple of stores in Ahmedabad also, so -- or nearby Ahmedabad or basically North Gujarat. But certainly, we are looking at some spots, and we are keen to finalize it once, at least in the next quarter or so. So, I think when the overall guidelines are to become one of the strongest player in Gujarat in retail, I think 4 is quite a conservative number itself. So, pardon me for not telling the location, but you can expect expansion.

Right. And then just wanted to understand how do you decide on these locations? Because point is, I know that these cities are well-known cities. I don't know about Gandhinagar, whether you're planning or not. But, I mean, how do you decide on the locations of this, whether you look at the high-income group? Or how do you actually decide on these locations?

So, jewellery industry is highly fragmented. And we -- the first thing that we look on to deciding location is demographics, the community sense. So, let's say, in Gujarat, we are -- in Ahmedabad we are having a strong customer base of certain communities, be it Patel or Jains or Marwaris. So, our stock or the merchandise is famous in those communities. And when we understand that we are basically a little premium because of the occasion wear segment and the antique jewellery, we are positioned a little premium. So particularly in those segments, we are finding that, yes, Surat and Rajkot or Baroda have the same demographics and the income levels, so on and so forth. So -- but we will look at many of the aspects, right? Certainly, a right location will be the thing. The community will be the thing. We cannot open, let's say, tomorrow a showroom in which we are unknown, let's say, a Marathi community or any other community wherein we don't have an experience. So, we -- the start would be to do an exhibition at a particular location to understand from different stakeholders, from the consumer, from the vendors that what kind of products are getting served. So, it's a very conscious call. So before freezing any location, a lot of exhibitions has already been there. Like Rajkot and Surat, we have done exhibitions throughout. There are many customers who are coming from here. Via Instagram and digital marketing, we understand that what kind of followers in percentage are there in Surat and Rajkot. So, when we tap in there, we are -- because these are good bets. So, we would want to always receive a warm response. And also, we understand about the province, like Rajkot is a great place to go because you cover the whole Saurashtra side of the Gujarat. So, Surat is wonderful because it's the ninth largest in terms of GDP. And also, it covers -- fantastically, it covers South -- Southern Gujarat. So, it's -- we look at quite a lot of things. I mean demographics to -- quite simply stated.

What I meant was that going into Rajkot, how do we decide the place? Like do you go to -- like if you're setting up somewhere in Mumbai, do you do it somewhere near the Zaveri Bazaar? Or similar to that, do you think in a particular city, or you look at the different location only?

We would look at hubs. So wherever the strongest hub is in the jewellery market, we would want to get the place only on that location. So we are very stringent when it comes to the store location. In Rajkot, let's say, the store is in the Kalawad road. If it is Surat, it has to be the Parle Point or the Ghod Dod Road. So, we are very stringent about the location. We do not want to go and try ourselves out of the jewellery cluster with any -- there is no risk -- that location has to be 100% intact and right. So no going away from the marketplace even to spread the stores, et cetera.

So these stores will be on lease format? Or will you purchase these stores, the real estate?

Generally, we prefer lease. If we see that there's an exciting location and the landlord is somewhere -- not agreeing for lease and et cetera, then we might go for purchase. So in Surat, half of the property is purchased and half of the property is leased. But in Rajkot, it is fully leased.

Okay. Great. Okay Just wanted to understand now, we have a sanction limit of around INR 150 crores. And have we -- how much have we utilized that? And have we utilized it for purchase of gold? And if yes, then what is the average price of purchase?

So working capital limits will be generally -- will be only utilized for working capital purposes. I mean CC limits, if you see, it will be utilized for working capital purposes only. And primarily, it will be through for buying of gold. So we have utilized around -- [ and ] not through with the data, but most of the limits are utilized for gold.

I'm not saying for the general -- like when you sell gold and you purchase it on one hand, not for that. I'm talking about the own stock. Have you -- I mean, have you increased the amount of stock also in -- during this entire H1?

Yes, because the demand was very strong, right? So if you see the volumes are still flat. So we have the gold -- the purchase and sale will be done throughout. So yes, we would be utilizing that stock. And it was a season period. In fact, for retail, right now also it's a high on peak season period, wedding seasons are on. So we would be utilizing it for stocks. And yes, we have utilized those limits for inventory purposes.

I remember we have been speaking to you since your IPO times. And in IPO also, you said that the entire money, which I'm taking, I'm going to build my stock with it. At that -- I think at that time we were around INR 60,000 per 10 grams, that was the rate. And I mean, we all were surprised that you're putting everything and not trying to go for gold loan. Of course, it turned out to be right decision for you. So just wanted to understand, even now you're putting at the same thing or you're also going for gold metal loan?

So Deepesh Bhai, it is not like -- see, I'll tell you at that point of time, I have said that, okay, INR 60,000, I'm buying gold. But it is not about that. See, when we have demand, we generally buy gold. And whenever we sell, we generally replenish it by the gold thing. Why we do not go for, let's say, the INR thing or the GML is just because of -- let's say, the gold has shot up from INR 60,000 to INR 1,00,000. So we'll have to pay the margins, right, to the hedging -- for using the hedging tools and all. And to -- we cannot get the margins so much instantly. So keeping the reserves and all in -- like the cash reserves and everything in place is like on the seasonal times, it is quite -- like right now we are not able to do. But going -- and we are also not saving on the interest, right? So CC we are paying, let's say, 9%. On the GML, we could have got it by 3%. But I think that's a decision to take, whether we go on GML or on the gold buying. But certainly, most of the -- right now, when you see the results, the main -- the strongest progress that you can see is that we have not lost on volumes in the first half of the season. And in the quarter 2, we have grown the volumes to 380 kg from 317 kg. So 20% is the volume rise that has happened in quarter 2. That really speaks about the robustness of the company [ rather ] than anything which is to do with price gains and et cetera.

Coming to the volumes -- Sorry, you were saying something.

Going forward -- we are still understanding and looking at the GML part or the hedging part very strongly. I mean we really don't want any downside risk and the book value of gold is sufficiently and very nicely in place to remove us from any of the downside of metal prices that can happen. So, we are quite cautiously covered, Deepesh Bhai.

Okay. Just coming on the volumes. You said that you've done 380 kgs versus 317. This is quarter -- I mean, quarter-on-quarter or year-on-year?

Y-on-Y.

Okay. And how much of this has been job work and how much has been from corporates?

So 249 is -- 250 ideally is through job work in among 380 kgs. And the bifurcation of corporates would be quite difficult because -- I'm not having in hand, but most of the people are right now preferring to do job work with us. Like there is a preference change maybe because some of them are worried, okay, the rate is [ 1.25 ] -- like INR 1,25,000. So let us give GML rather than buying and selling. So that is why maybe the preference change has happened. Similarly, the same change has happened in retail also. People are selling -- exchanging gold instead of buying fresh, more freshness. So it is industry-wide same. It might reverse. So -- but the bifurcation of family versus corporate I'm not having, but we are really focused on corporates, right? That is how the company is also aligned. So -- and they have given us good growth. I mean, we are certainly happy that they have prepared for the season and the numbers are also showing quite nice.

So going forward, we, as an analyst, should not look at your sales growth numbers, but we should only look at the volumes as well as your bottom line. Is -- that would be the right way to judge the company?

No, incorrect, Deepesh Bhai. I would add to this. You are not -- like I cannot say incorrect, but partially correct. So the best way to look at the company is, first, look at the volume numbers, multiply it by the weighted average gold price, okay? And look at -- you can look at the company from that [ type ]. So now when I say that this quarter I have done 380 kgs of volume, ideally, you should multiply that whole thing by the weighted average volume, let's say, INR 1,10,000 is the weighted average, if INR 1,25,000 is the current rate. And then see that this much amount of business that the company has done and then the bottom line about, let's say, INR 18.5 crores or whatsoever, then can come at the relatable figures. Otherwise, you will always be jumping, [Foreign Language]. If you look at multiplied by the weighted average, things will become easy. Yes, you can look at the sales figure also. In retail, sales figure will be very critical because when I say that multiple locations will happen, so revenue will 100% grow. Why? Because the retail expansion will happen. So sales will be important, but volume figures cannot be not considered. And whenever the job work figures will be high, the margins will be -- will rise up.

Right. I'm not ignoring the volume figures. In fact, the volume figures are very important. I was just trying to ignore the value figures, whether it should be taken. But I think it's a fair point of multiplying it and then getting the whole margin scenario also, very easy. If you can add this to your slide also, I think it will be great because for us also to get the weighted average -- Of course, it's easy, but not a problem, but we'll definitely do this, if you can give us the volume numbers every quarter. Great. Just wanted to understand one more thing as a business point of view. Do you think that when you're growing number of stores and maybe will you go for more stores in Ahmedabad because just like what Titan is doing in a bigger city, you have more number of stores. Will you go that way? And if yes, then when the major expansion of stores will be coming, will that be in your own gold only? Or will that -- you will actually come to GML for the retail business?

So, see, as far as we are comfortable with the book value of gold and the weighted average price of gold, we are -- we will be comfortable in accumulating gold. But once we come with the market parity or, let's say, 10% near to that, that time we would be surely hedging going forward for a certain portion of GML exposure also, why not. And on the future level or long-term level, 100% of the company would be going on -- we would be wanting to go on a GML basis. The preference would be there, but the change will be gradual and it will be quite -- like it has to be quite monitored also. So -- and when you say about the store expansions, like how -- any of the corporates -- major corporates will be doing, everyone will be having their different strategy. And we -- first thing has to be looked at not the competitors of the peers, but the consumers. Now consumers will tell the story. If the consumers are coming from, let's say, another region and we are not able to map that and we are going on to a different region for building stores, that might be sad, just because the competitors are doing it. So we want to focus our -- everything has to be focused in terms of where the consumer preference is, and where -- which locations the consumers are coming, what is the preference that consumers are having. And according to that, we'll be opening stores. So let's say, if consumers are coming from Tier 3, then why not Tier 3. If consumers are coming from Tier 2, why not Tier 2. And yes, then if consumers are coming from the metro cities, for sure. But focus will be not about, okay, [Foreign Language] Focus will be where our consumers are coming from, which community they are coming from, the whole detailed study of demographics and their behavior, et cetera.

Why I asked this question is because many of the family jewellers, when you see their -- I mean, the way they work, they work mainly in a city -- in one city where the family actually comes from, like even a PNG or even Ranka Jewellers, they actually are there, but their presence is majorly in Pune. Of course, PNG has now expanded a lot. But -- so does Harit Zaveri also want to do this or you want to become a pan-Gujarat player?

So, Deepesh, I'm 36 years old. My jewellery store is merely 11 years old. it was a pilot test store. I can assure you in 2019, we had a retail revenue of INR 24 crores. And right now, we are at -- last year we were at INR 323 crores. Nothing to do with family store. We have no bargain system. Things are systematized in the store. No one can come and say that okay, discount [Foreign Language]. We are purely running on -- running this retail store on the basis of right marketing that we are doing. You can check our Instagram page, Harit Zaveri Jewellers, you will understand. And you can surely come to the store, feel it itself that is -- whether it's run by the -- mainly the relationships or actually driven by products and right kind of policies and procedures. Yes, I think this is my submission.

Yes. Great. I mean, [ says it all ]. But again, just one more thing that if the retail presence is going to be -- I mean, you're a 36-year-old guy. So point is your focus will be on retail or your focus will be on B2B? Where is Harit Zaveri's focus?

So volume-wise we will -- see, right now, we are having a manufacturing facility, and we are for sure, of course serving corporates who are giving us the right amount of right volumes. We are goodly -- fairly focused in manufacturing. And the margins are coming from retail and the scalability can -- should come from retail. So, we are focusing on enlarging the brand. For the coming medium-term goals, we can surely say that you will see the similar kind of numbers coming in with respect to volumes and the volume of retail and wholesale will be somewhere around 50%, 50% in the medium-term level. Right now if you see, the volumes are 30%, 70%, 70% of the B2B level. So yes, we are growing B2C, but that does not mean that we are anyways compromising on B2B or we are not growing on B2B also, like there's a lesser growth or anything like that, no. Because see, the main reason is B2C is run by, let's say, Ahmedabad market. If I'm understanding Ahmedabad market, let's say, I will understand in terms of rupees. Let's say, it's -- my store has a maturity level of INR 500 crores. The -- On that same side, technically understand, having a manufacturing facility and having, let's say, 10 karigar, each karigar having 1 kg of capacity [Foreign Language]. That will translate to INR 50,000 per 10 grams. That is INR 50 crores of manufacturing capability I had with 10 karigars. Now the same 10 karigars will not produce less because the gold price has gone up. They will produce the same amount. So right now, my manufacturing capability will be INR 125 crores, given the rate is INR 1.25 lakh [Foreign Language] There is a strong focus in B2B, and we are growing, expanding in B2C. But in medium-term, you will see that revenue shift will happen in retail much strongly. Volume will remain in both.

Great. Just last question, if I can ask. One -- this is the last question. If I can just squeeze in a last question. Okay. Just last question. What is the order book as of now? Because you had said that in IIJS you have booked till Diwali. What is the order book right now? And what is it in terms of caratage? I still prefer people preferring 18 carat, or we have gone lower also? That's it. That's the last question.

Yes. So caratage-wise, we are experimenting in 18 carats. So we are building up inventory in occasion wear also 18 carat. That is new for us also, but we are certainly seeing the demand coming up. As far as order books, see, job work has done its job in the quarter 2 itself. We cannot expect the same thing to roll out in quarter 3 because the season is already -- the season was early this year, so the demand has come out early, okay? And the quarter 3 for job work will be quite muted. But on the -- you should check it on the year-on-year, we are still on a very good side when it comes to job work. On the retail level -- retail level, it will -- it is quite seeing the 41 days of retail, it is going very good. And we are -- I mean, we are sure that -- until unless something else happens, we are sure that the momentum is going to go. I mean quarter 3 will be good in terms of strong retail sales, I think we are going to have. So yes, caratage and both, I think the revenue part. I think I hopefully have answered.

The next question comes from the line of Raj Shah from RK Family Office.

Yes. So, for once I thought this was a private conference between Deepesh and management. But -- so my first question is, on year-on-year basis, there is solid revenue growth in Wholesale division, but I think with the lowest volume. So can we say that this year we will close below 200 kg of volume in Wholesale division? Of course, gold prices are prices, but on volume figures, I just like your view that we will be closing below 200 kg because 200 kg will be the lowest in past 3 years. Similar to that, 19% EBITDA margin on company level, is it majorly due to Wholesale division driven by gold prices or any other factor is that?

Raj, certainly, we had a good conversation with Deepesh, but we'll take your question. And -- so coming to the point, kindly see wholesale plus job work when you see volume datas, okay? Why? Because a customer, which is -- for me which can be a corporate or an independent retailer, can ask me to supply goods basis on wholesale as a sale bill, or he can tell me, okay, I am providing you gold a little extra for the days and you can job work and bill it to me, okay? So if you see the volume data, you can see that, okay, the customer preference can change. We are not sure that in quarter 2 we expected the wholesale to actually grow very strongly. But because of the preference in giving the gold early was there just to -- because of the price rise, they did not want to take the risk to actually have a purchase in their, whatever financials. So maybe with that kind of thing, looking at job work plus wholesale would actually mean -- will be a right kind of a meaningful thing. And if you want simple datas, in this quarter, wholesale was, let's say, 51.5 kgs and job work was INR 249.25 crores. So, around 300 kg of B2B was there, which is in last year, 163 plus 57. So last year, volume were 220 kgs. So, we don't know if the customer preference changes from job work again to wholesale, we might have to give them a sale bill. Otherwise, they are happy to do -- go for job work. This is quite dynamic in nature. Second point about margins. Margins are clearly dictated by the rise in job work volume. So, if the -- right now, in my sales mix, if you check quarter 2, 65% is job work. So total 380 kg volume, simple calculation, 250 divided by 380, 65.7% is job work. If job work is this high in the sales mix, margins are bound to rise. In quarter 1, if you see, it is 87 divided by 162, is only 54%. So, from 54% sales mix, it is 65%, 66%, the sales mix. Margins are bound to rise when the job work is high.

But sir, like on a year-on-year basis, there is only INR 5 crores of difference. Like in quarter 2 FY '25, we did INR 23 crores in job work. And this quarter we did INR 28 crores in job work. So, INR 5 crores difference in revenue terms and you are telling me that INR 19 crores [ PAT ] we have reported in quarterly numbers.

Correct. So, I'll tell you. So, when you look at job work basis, the revenue of job work, the sale of services is one part, that is just a billing of stones and et cetera, things, other materials. But we also earn from the salvages that the wastage part of job work. So, let's say, if there's 100 gram set [Foreign Language], but major revenue or major thing will be 100 grams of gold [Foreign Language] what amount of wastage that has been given to us, we are saving that wastage. So, our recovery or the manufacturing capability to recover gold is very efficient [Foreign Language] we will be able to save on the wastages part. And those wastages part will be added on the -- directly on the bottom line, basically the closing inventory. So that is why job work is a very critical data to see and not just the sale of services in terms of rupees. Kindly gauge quantity of job work.

[Operator instructions]. Our next question comes from the line of Chandan Mishra from [ Finvestors ].

Congratulations for the great numbers. Sir, my question is related to margin. I see we have variation in margins in -- across quarters in EBITDA as well as PAT margins. My question is what sustainable margin we are targeting for?

Sir, if you want to understand or if you want to understand the relatability of margins, the simplest method would be you multiply volumes with the average amount of gold -- weighted average amount of goal. Let's say, if I'm telling that 380 kg is my volume done, you multiply that with INR 1,10,000, let's say, an average rate or INR 1,10,00,000 as a rupee value. So INR 418 crores of top line you can take and then you can understand the bottom line, it will be equal throughout all the quarters. Now, to get back what will be the sustainable margin level in terms of revenue mix, on the revenue part, it will fluctuate basis on the job work proportion that we do. On the year-on-year basis, if you check the full year basis, generally, it will be more or less same with any of the previous years. But if you check on the quarterly basis, quarter 2, if the seasons are early, margins are going to be heavy because job work will be more. Quarter 3 will be dominated by retail, margins are going to be a little lesser.

Sir, my next question is related to how much is inventory gain for this quarter?

So inventory gain in this quarter, I have -- what do you mean by inventory gain?

We have inventory of [ only ] last quarter.

Correct. So you are telling what is the profit that we have made from the increase in price of gold, right?

Yes, definitely, sir.

I can tell you it's not significant. Though I don't have the numbers handy right now, not significant. The company's performance in this quarter is highly driven by the volume that they have produced. We have really grown on this quarter 20% by volumes despite prices of gold rising 50%. So you can understand if the price of gold has risen that much, and we have still grown beyond that 20% by volumes in quarter 2, the robustness of the company's performance is right now getting shown. Less it is to do with the increase in price of gold. It is not a significant portion.

[Operator instructions] The next question comes from the line of Rajendra Pasi from NP Analyst.

Firstly, congratulations on a great set of numbers. My first question would be like we are going to open 2 stores, one in Q4 FY '26 and the other one would be in Q1 FY '27. Is that the correct time line?

Yes, it is more or less a correct time line, yes.

So regarding this, have we finalized the locations like in Surat as well as in Rajkot?

[ It is ] finalized. The lease deal has been done.

Okay. And when can we expect this store to be fully operationalized within Q4? Like will it be somewhere in the mid or at the end of Q4? Like what our internal agenda?

It will be late Q4.

[Operator instructions]. Next question comes from the line of Kunal Sharma from Veritas.

So, Harit, on the question on retail store side, Surat and Rajkot that you anyway identified. So wanted to understand the strategy behind the Surat store wherein the major players like Indriya and many more stores are there. So what do you -- so what's your take on the marketing strategy side? And how are you gaining the market share in the Surat as a whole market?

So first, the merchandise is correct. Second, the sensing of the demographics is correct. We are into Ahmedabad. It is the seventh largest city in terms of GDP. We are in the demographics of Patel. Surat is in also the same demographics. The market intelligence that, we gather the kind of exhibitions that we do, already the customers of Surat coming into Ahmedabad purchasing from us basically gives us the confidence to develop a store in retail. Now, if you talk about whether Indriya and et cetera corporates are there, they are there. Will it hamper us? They're already there in Ahmedabad also. Why it has not hampered us. We are still growing in Ahmedabad fairly well. We are not a retailer which has been into the legacy period like 50 years, 70 years into the business. We are just new. Like it's been 10, 11 years, and we have got from INR 24 crores to INR 323 crores without giving policies, procedures and on the best of merits. So why not have the confidence to actually scale.

Okay. No, sir, that is correct. But question on the market share side and the marketing strategy. So are we doing any marketing campaign over there?

Certainly. I think that plans will be 100% there, and it will be shown -- it will be very evident.

Okay. And what is the marketing as a percentage of sales as of today?

So generally, the marketing budget would be from the -- in the new store expansion, it will be somewhere around 2% to 3%. On the maturity of the store, it will be generally from 0.75% to 1%.

Okay. And the last one on the payback side. So what -- like in these 2 stores, what would be the payback and the breakeven can we expect from these 2 stores?

Payback and the breakeven, I think I told you about the -- if you can understand the forecasting of revenue that we have done, we have for next year. We have already included the revenue of these 2 stores with that. And if you understand the marketing expenditure, I have told you that 2% to 3%. It generally speaks about the kind of revenue and the subtraction of the marketing expenses that are -- that will happen. So I think the max will be there. Plus my forecasting of numbers, it will be generally in [ align ] with that. So even in the quarter 4, the store is coming, we have generally understood the marketing budget for that coming store. And that is how it is in pipeline. So we are -- in the Surat and Rajkot, we are majorly expecting that the maturity of the store will be around INR 500 crores and INR 400 crores, respectively. But the maturity will come in the fourth or fifth year. So in the first, second year, it will be generally -- let us understand, we are on the double-digit -- high double-digit or triple-digit side of numbers will be there in terms of revenue.

[Operator instructions]. The next follow-up question comes from the line of Raj Shah from RK Family Office.

Sir, you have told that PAT number is higher because of higher job work services, like we are -- we have saved gold during job work services. So, if I see the revenue and volume terms -- in volume terms, I think we are also flat on H1 basis in job work. And in revenue terms, there is not a significant growth. So, can we say that because we have done the same volume last year, but prices are different -- of the -- prices are different of gold and that's why margin has increased drastically?

[Foreign Language] Raj. Let us clearly understand, simple we will talk. 250 kg is my job work volume this quarter. Last year quarter it was 163 kg, okay. So now 250 kgs into sales figure, that is 250 into, let's say, INR 1,10,000. So job work volume is -- in the job work, the amount of goods delivered is INR 275 crores. How I have got it 250, into 110. That is INR 1,10,000 the gold rate per 10 grams. So, last year, it was, let's say, 163 kgs, okay? So 163 into last year average, it was INR 75,000 -- INR 75 lakh per kilo, okay? So it is INR 122 crores. So from INR 122 crores, we have moved to INR 275 crores. Now, if you tell that it is because of gold price rise that you have got this, no. Retailers already adjust their gold price rise and then they give demand. That does not mean [Foreign Language] It is never like that. It is based on the designs or the manufacturing capability that we have, we are able to garner higher amount of volumes or we are able to at least maintain volume flat despite prices growing 50%. So understand, if I have a retail store, okay, my retail store is increasing, let's say, at the pace of 20%, 25%, still my volume will be growing at 15%, 20%. And in the same way, my merchandise will follow. So it is clearly -- you need to check the numbers with multiplied by the weighted average, and you will come to know the merits of the demand of the company in that case.

Sir, can you quantify?

Yes, very clear.

So, sir, can you quantify that on INR 28 crores, how much we have saved? Like how much crores gotten into bottom line just by doing INR 28 crores of job work services? How much more we have saved in the gold, which...?

So generally -- in job work, we generally assume that at least we should be able to save at least a minimum of 2% or 3% or maybe a little bit on a higher side, sometimes on the lower side, sometimes depends on the complexity of designs, et cetera. Numbers are not that handy. You cannot take it like extremely on that level, but general [ notations ] will be that.

So you are saying 2%, 3% of 250 kgs?

Yes.

Okay. Understood. And sir, my second question is like we have seen over the years, our retail businesses have been structurally growing. Last year, despite price rise, our volume growth was pretty solid. But I think -- so what is your expectation for H2 because H1 volume growth -- like H1 has not seen volume growth?

Correct. Perfectly said. So, what we have done, we took a little bit -- we took the making -- we lifted the making charge a little bit up. We checked the consumer response. The consumer response was good in terms of revenue, but they were still hesitant for purchasing more -- we increased the -- we were checking the price sensitivity of consumers, right? So, because of that, the making charge was a little bit increased. But now understanding that the demand is, whatever shift, the taste preferences, the price sensitivity, we have redone that making charge. We are -- and again, the demand float is strongly there. On the complete financial year, retail is going to be very strong. Quarter 3 will [ dictate ] retail, see. There is nothing -- quarter 3 will tell most of the stories of retail. And I think we'll be able to touch -- if last year it was INR 323 crores, we should be able to touch a good double-digit growth, plus double-digit growth, in fact, in retail this year also.

Okay. And sir, you have said that after 4 showrooms coming in, we target to have 50%, 50% share of volume in B2B and B2C. So sir, I think then volume of 600 to 700 kg in retail will be massive for our P&L, right? So what's your view on that?

It will be good, but store expansions will also cost marketing. We have marketing cost also. So we need to subtract that. On the overall basis, the company will be 100% in the path of expansion. As we have said, we need to become -- we are going to become one of the -- we want to become one of the largest player in Gujarat for retail. I think, so for that whatever is necessary will be done, be it brand, be it marketing, store buildup. And yes, there will be revenue maximization.

And sir, what kind of operating leverage does our retail business enjoy? Like in our current store, how much more margin can increase as turnover increases?

So it depends on the product mix. If the diamonds are doing good, then the margins can increase. Certainly, in our case, if occasion jewellery is doing good, margins are always good because we are also the manufacturer of occasion wear jewellery. So that is where the actual play comes in. We can sell at a lesser cost than market and still gear up more margins than any of our peers just because we are the original source manufacturer of those products. So integrated manufacturing capabilities helps us in gearing up the margins in retail. Also -- the design exclusivity is also being maintained in that case. So that is actually the USP of very strong selling proposition or [ brand ] exclusivity, but -- and also cost leadership. So going forward, if the occasion wear demand is there, surely the margin will sustain in retail.

Sir, can you bifurcate like how much EBITDA does our retail operation make?

Product mix margin bifurcation I don't...

Product mix [Foreign language] retail division.

Not handy as of now, but let me see, but -- not handy.

Si, if 19% is our quarterly EBITDA margin, then like how much -- like if you can say how much comes from retail?

[Operator instructions]. The next follow-up question comes from the line of Chandan Mishra from [ Finvestors ].

Sir, my question is related to, sir seeing the price fluctuation [indiscernible] on the downside in Q3, [indiscernible] sir?

So, seeing the downside price in Q3 -- gold price shooting up and correcting, this as per my experience has created a nice spike in retail for buying. This is the moment when the price gets corrected after increasing -- [Technical Difficulty] customers come and they want to buy gold or the gold that they have -- [Technical Difficulty] that they have selected or make a sale of the selected gold. That is what I have seen. Nothing is going to get affected in terms of dropping in gold prices, value of gold and we should enjoy the demand that is coming when the gold prices corrected once in a while, and then [Technical Difficulty]. Continuous drop of gold prices make the customer confused and continuous increase of gold prices also makes the customer confused. They hold. But because we are in an occasion jewellery, delay of demand can be there, denial will not be there.

One last question, sir. You have given your guidance for INR 700 crores for revenue and INR 45 crores of PAT. In H1, we have already achieved almost more than half of guidance of PAT. But in a revenue level, we have achieved almost 38% to 40%. Do we achieve -- on track to achieve the revenue guidance?

Chandan Bhai, it really depends on our retailers who wants to get their goods on the sale bill or who wants to do job work services with us. So let's say, if you are a retailer, you are giving me 1 kg of gold, okay, for a job work service. So I'll make a job work and I will give it to you, but I will charge my profits. And if you are wanting to take that on the sale bill side, on 1 kg, I'll book the sale, let's say, INR 1,25,00,000 and I'll give it to you and then you can give me the payment. So it really depends on the consumer or retailers' preferences. The little bit of preference is because of sharp increase in gold prices has shifted in more of job work. That is why you're not able to see the reflection of revenue. Kindly see volume data of B2B combined to actually understand the company that how it is doing in B2B side and multiply it by weighted average price of gold.

The next question comes from the line of Rajendra Pasi from NP Analyst.

Yes, so as I was continuing [ when ] we are going to open 2 stores, one in Surat and the other one in Rajkot, as we will definitely need to increase the inventory side as well, right? [Technical Difficulty] is almost at INR 350 crores. How much do we see it to be going up and how we are going to [indiscernible]? Will it be mainly through debt, [ internal accruals or ] [Technical Difficulty]? What would be the size of inventory that we are looking at? Right now it's [ INR 350 crores ], so where it can land?

So for competitive purposes, we are generally not wanting to disclose this inventory because it will directly be relating to the new stores that is coming up. You will eventually see when the results are out, and inventory will be actually seen. But generally, in the debt-equity ratio has to go on 1:1 level, you can see that what amount of float will be there, going forward, what amount of inventory will be built up. Whatever the debt-to-equity ratio 1:1 will be there, will be generally through working capital mix.

Okay. And the second question would be, as we already have a large chunk of our revenues coming in from the B2B, are we doing something to increase our customer base on the B2B end, like acquiring new customers or something?

Continuous practice of exhibitions will be there, launching of new designs will be there, understanding market dynamics, experimenting in different caratage like 18 carats will help us in actually penetrating the market more. It is more of a very organized and systematic approach that we do because we are dealing with majorly corporates, also one of the only wholesalers or manufacturers who is able to demand gold in advance or prior and actually get a job work done for that. So specialization is in place. We are maintaining the design quality, the product quality, the specialization. And yes, the penetration is certainly seen. You can see it from the results itself, that volumes dictate the robustness of it and 50% price correction still we have served Y-on-Y in equal volume. Also, it is because of the early season. I agree with that. But still, company has done good when it comes to half -- first half of the year. And I think we'll be meeting the expectations also, like the projections that we have set forward.

Yes, that is fine. Basically, company has done well, I am [ mainly ] understanding from the future perspective, that we are also looking at expanding our customer base from the B2B side.

Customer base on the B2B side, we will be for surely exploring. We are preferred manufacturers, preferred suppliers for many of the corporate clients, and we will continue to do that.

Okay. And the Q3 is almost, half of it is done, right? And we have already said that we are seeing full numbers -- strong footfall within our -- so are we confident of beating the last year numbers on that part?

Market is dynamic and that is right now far for me to tell. But certainly, I can tell that the retail division of Q3 is doing strong. And whatever the guidance that we have given, we are -- quarter-on-quarter, we are getting near and we are seeing that we are getting -- we are achieved. Now, it has been almost 6, 7 quarters that the company is listed. And my PAT guidance and revenue guidance generally company is meeting. So even this year, we are hopeful to meet them. But the environment is quite dynamic in nature. The prices are fluctuating, geopolitical tensions and everything is there. So there is also a little bit of caution that is -- which is there. But certainly, there is -- with respect to business, we are quite positive and the expansion is also going on. The spirit is there.

Okay. And the last question would be from the customer demand side, like as the prices have risen so much, the main trend that I have seen in the industry is that the customers are looking for the lower carat jewellery mainly into 18 or maybe even lower than that. So how do you see the demand from the customer side? Is it still for the higher carat jewellery or the lower carat side?

See, India is culturally rooted. Occasion jewellery segment is still dominated by 22 carat jewellery rather than 18 carat jewellery. In daily wear segment, there is a caratage shift preference of 18 carat or lower caratage is very high, and we are agile to that trend. But in occasion wear, still the domination will be of 22 carat. Yes, there is an entrance -- we are also entering into 18 carat occasion wear, and we are seeing that whatever the pulse of market will be, let us understand the pulse. And then [indiscernible] the experiment and the initial exercise of going into 18 carat is for sure, we'll be doing it.

As there are no further questions, I would now like to hand the conference over to the management for closing comments.

So thank you, investors and participants for asking questions. And it was quite a lengthy con call, and I hope that I have answered all the questions very clearly and correctly. If you have any further questions, you would like to know more about the company, please reach out to the Investor Relationship Manager, Valorem Advisors. Thank you.

On behalf of RBZ Jewellers Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.