RBZ Jewellers Ltd Q1 FY27 Earnings Analysis

- RBZ Jewellers is optimistic about retail growth, focusing on expanding store presence, particularly in Gujarat's key cities like Ahmedabad, Surat, Rajkot, and Baroda. - Four new stores planned for the calendar year 2026 (2 large and 2 mid-sized), but no specific sales or revenue guidance provided for FY27 due to market uncertainties. - Management takes a pragmatic approach, monitoring consumer reaction and market conditions before giving future guidance. - Capacity utilization currently around 50-55%, with no immediate plans for manufacturing capex expansion; reliance on a mix of in-house and vendor job work expected to support growth. - Emphasis on growing the higher-margin antique jewellery segment, while acknowledging potential in diamond/studded jewellery for future expansion. - Inventory for new stores estimated at INR125-150 crores per large store, funded through debt and internal accruals. - Market size is large and consumption trends are positive long term despite short-term uncertainties.

- The management refrains from giving explicit guidance for FY27 due to recent government announcements and uncertain market reactions (Page 14). - They are optimistic about growth driven by market size and consumer behavior, with expectations of store expansions and aggressive market pursuits (Pages 14,16). - EBITDA for FY26 was INR92 crore with strong margin expansion; retail stores and new formats are expected to contribute positively (Pages 4,16). - Capacity utilization currently at 50-55%, with no immediate plans for manufacturing capex, indicating potential for margin improvement through operational efficiency (Page 13). - Leverage ratio targeted between 1:1 to 1.5:1, implying balanced financial management supporting growth (Page 16). - Focus on expanding antique jewellery segment with potential for other categories like studded jewellery acknowledged but currently less aggressive (Page 19). - Future earnings growth expected but subject to market dynamics; detailed formal guidance to be provided once visibility improves.

- RBZ Jewellers is currently not looking for any capex in the manufacturing setup as of FY26 due to comfortable capacity utilization boosted by increased gold prices. - The company plans to open 4 new retail stores in the calendar year: 2 large format and 2 mid-format stores, primarily in Gujarat (Ahmedabad, Gandhinagar, Surat, Rajkot). - Inventory investment for the new large-format stores is anticipated to be around INR125-150 crore per store. - Funding for new stores will be through a combination of debt, inventory transfer, and profit gains; no dilution is planned. - The company is open to future retail expansion in Tier 3 and Tier 4 cities if consumption opportunity exists. - Strategic focus remains on expanding retail presence in Gujarat to strengthen brand visibility and market share. - Future capacity expansion in manufacturing will depend on market conditions and gold price movement, with no immediate plans.

- RBZ Jewellers does not plan any equity dilution to fund upcoming store inventories; funding will come from debt raise, inventory transfer, and profit gains. - Peak debt after opening new stores (including Rajkot and Surat) is expected to be around a debt-equity ratio of 1:1.2 to 1:1.5, with equity targeted around INR 300 crores. - The company is currently underleveraged and comfortable with increasing debt up to a ratio of 1:1 or slightly higher (up to 1.5:1). - No immediate capex is planned for manufacturing as capacity utilization is around 50-55%, and the company is comfortable. - They are exploring Gold Metal Loan (GML) for financing new gold purchases in FY27 as a hedging strategy.

- Harit Zaveri mentioned that for job work services, while there was a volume degrowth due to gold price doubling, the value of merchandise increased significantly. - The company prefers job work as it allows receiving gold in advance, benefiting cash flow. - No specific current order book value or exact pending orders numbers were provided in the transcript. - The outlook for FY27 indicates a continued preference for job work over wholesale by corporate jewellers due to rising gold prices. - Overall, the company is optimistic but cautious given recent market developments and is monitoring demand and order flows closely.