Goldiam International Limited (526729) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Goldiam International Limited Q1 FY '27 Earnings Conference Call hosted by Monarch Networth Capital Limited. Before we begin, a brief disclaimer. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions and expectations of the company as on date of this call. These statements are not the guarantees of future performance, and it may involve risks and uncertainties that are difficult to predict. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Rahul Dani from Monarch Networth Capital Limited. Thank you, and over to you, sir.

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

Thank you, Rahul. Good afternoon, everyone, and welcome to Goldiam's earnings call for the quarter ended 30th June 2026. I would like to thank Monarch team for hosting this call. Goldiam continues its strong growth momentum in Q1 of FY '27. Goldiam reported total revenue of INR 3,637 million for Q1 FY '27. Other income of Q1 FY '27 included tariff refund received by the company. Goldiam's EBITDA for Q1 FY 2027 grew by 120% to INR 1,039 million. Steady state EBITDA margin post tariff refund calibration grew by 400 basis points to 24%. Profit after tax for Q1 FY 2027 more than doubled at INR 740 million. Lab grown diamond jewelry exports contributed to 90.7% to the overall export sales mix during Q1 FY '27 compared to 87.8% in Q1 FY '26. Online revenue accounted for 19.3% of the revenue during Q1 FY '27. About 64% of the inventory finished jewelry as on June 30, 2026, is with customers as finished jewelry stock of jewelry to be sold in subsequent months to their customers. Goldiam's order book position as on June 30, 2026 was about INR 2,250 million. Cash and cash equivalent, including investments, were at INR 4,566.7 million as on 30th June. In July, the company allotted [ 3 crores 76 lakh 39,281 ] equity shares of INR 2 each as fully paid up bonus equity shares in the proportion of 1:3 by utilizing an amount of [ INR 7 crores 52 lakh 78,562 ]. Now let me share updates on ORIGEM, our India-focused B2B lab grown diamond jewelry retail brand. As on date, Goldiam has 26 operational stores under the brand name ORIGEM across key cities. For Q1 FY '27, ORIGEM recorded a total revenue of INR 81.56 million. The ORIGEM team is working on sales improvements, strategies by introducing various sale enablers across the stores. In quarter 4 -- in Q4 of FY 2026, we have introduced India's first digital 3D ring builder. During Q1 FY 2027, we introduced lab grown diamond jewelry in 9-carat gold and introduced old gold exchange team across all the stores. With this overview, I'm happy to open the floor to questions. Thank you.

[Operator Instructions] The first question is from the line of Dixit Doshi from White Stone PMS.

Can you hear me?

Yes, sir.

Congrats for the excellent performance, especially into the B2B segment. So if I see our PAT, as of June 9, our order book was INR 225 crores. And last year, at the end of June quarter, it was INR 140 crores. So it clearly shows that there is a good order book year-on-year. But if you can elaborate more into the demand for Q2 and also for Q3, considering Q3 is seasonally our best quarter. So how are you seeing demand at the ground level in U.S.? And what led to specifically the 40% Y-o-Y growth in the Q1, if you can elaborate a bit more on that? Also, you have last quarter, touched upon the launch of bracelet and necklace category in the U.S. So have we done that? And how has the initial response you can mention?

Mr. Doshi, Anmol Bhansali here. I will take that question on and then open it up and request our Chairman to add any comments. So let me start with your follow-up questions. The -- we have launched the category of bracelet and necklaces in the later half of the last financial year. That has played out very well with select customers. We've, in fact, been able to add some new customers in the wholesale segment in the U.S., particularly solely for the bracelet necklace categories. We are still working on adding and increasing our share of this category and introducing it to our large retail customers, that is -- that will further add fuel and growth to our overall business profile in the B2B segment. Overall, this along with deepening presence with our existing retail customers in the U.S., as well as deepening and introducing new customers in other geographies, particularly Middle East, Israel, especially, have led to the enhanced growth seen in Q1 FY '27 this year. We've been able to successfully add and deepen new customers in these geographies, which are non-U.S. geographies as well as, of course, as per our ongoing strategy, deepen presence with our existing retail customers in America. With regards to Q2, Q3, we, again, are very confident moving forward into the coming quarters on our sales pipeline and building as seen in the order book and further deepening of presence as seen in Q1 FY '27. We are looking forward to a robust Q2, Q3 compared to already record FY '26, and we hope to continue the growth. It will be our endeavor to provide further stronger presence for Goldiam for our key retail customers in U.S. and globally. Now I'll request our Chairman to add any comments, if missed on anything.

So Mr. Doshi, also the reason -- very important reason why we had 40% growth this quarter was also that a lot of goods that were with our retailers actually sold. This sold very well. Lab grown demand all over America is picking up very strongly over natural diamonds, and Goldiam is a clear beneficiary for the same. Thank you.

And you mentioned about Middle East and Israel so can you give some number? How is -- how much would be our outside of U.S. B2B business?

So outside the U.S., the B2B businesses still remain small because we have started just last year, but the traction and order repeats are very strong. And the bracelet and necklaces that we've introduced in Middle East and Israel is doing very well. So we hope to increase that number in a good way by the end of the year. So we'll be able to report to you that we'll have a double-digit growth in non-American areas as well.

Okay. And my second question is regarding margins. So you did mentioned last quarter that FY '27, you will see margin expansion. And so there is one doubt, let's say, when you report the numbers, you include the entire other income and calculate the EBITDA margin. Generally, we exclude the other income and compare the EBITDA margins. So if I exclude the other income, then the margins are -- margins have not gone up. So how to look at it. And in this INR 37 crore other income, that -- I think INR 15 crores, INR 16 crores would be tariff [ refined ]. So for the remaining amount, was there any ForEx gain that's why you included it in the EBITDA margin? Or it is more or less interest income on the treasury?

Sure. Thanks for the question, Mr. Doshi. So we are very consistent even in our prior calls to state that our EBITDA margins, we look at, including our other income because always, of substantial portion of other income and volume is stemmed from exchange and ForEx changes as -- I mean, until last year or 1.5 years ago, we were a 100% export company. And even till date, we are over 90%, 95% an export company other than ORIGEM. So given the current standing and the build of our business model, the exchange income is a natural outcome of our business where we are investing in memo inventory and the sales pipeline in the U.S. while being domiciled in an SEZ in India. Having said that, even in the prior call and in last fiscal year's call, I was happy to state that we will have a steady state margin expansion over the prior year. This is as per our definition, including OI. And yes, we are happy to showcase these results in Q1 FY '27 where steady state margin -- EBITDA margin has [indiscernible] to 24%, significantly higher than Q1 FY '26 or FY '26 as a whole. This is, again, walking the talk as to what we have shared on our prior commitments and driven by the dual and hybrid casting methods where we are casting in the U.S., delivering U.S. product of origin as a key supply chain solution for our customers, whilst also not bearing the brunt of changing tariffs regardless of what they are. So because of this dual casting method, we are able to inch margins upwards. FY '27 will be most likely a full financial year where this dual casting method will be employed throughout the year. Regarding Q1 itself, out of the other income described, INR 22 crores approximately has come from tariff, tariff refund -- tariff-duty refund. The balance has come split between ForEx gain as well as treasury gain. That, even if you keep consistent over the quarters, you will see that even removing the INR 22 crores, there is a very substantial growth over Q1 FY '26, taking the same metrics into consideration and all other things being equal. So we're happy to inch upwards as committed and shared with our investors in the prior con call, and we hope to maintain and continue this margin profile. As FY '27, we'll have a full financial year of the U.S. casting and dual hybrid casting model.

Just one question on the ORIGEM and I'll be back in the queue. So many more stores we are planning to add for the remaining of this financial year. And any thoughts on franchisee model or a branded business?

So, thank you, Mr. Doshi. So we have signed about another 7 stores, which will be active. These 7 stores will come in between now and -- our target is to get them open before -- at [indiscernible]. And then post that, we will review the business of ORIGEM. And the whole and sold work is being put in place to increase sales per store through our program of sales enablers, as our Chairman had rightly identified in the opening remarks I'm happy to share more details on that later in the call as well, and the sort of work that's going on to further increase and make the business -- ongoing monthly business of ORIGEM on a per store basis, even healthier. We will then, of course, calibrate basis on opportunities available from real estate key mall partners as well as if there's any successful regions which we want to expand faster than regular new course of new course of affairs.

The next question is from the line of [ Agam Bhansali ] from Dalal & Broacha Stock Broking Private Limited.

First of all, congratulations on a great set of numbers. So I just have one accounting question. So other income has increased this quarter, which includes a tariff-related refund. So can you clarify whether this refund has already been received in cash or it's yet to be realized?

Yes, Mr. Bhansali, the refund has fully been received in cash by our Goldiam USA Inc. and already within the company.

Okay, okay. And one more question. So as more players enter the lab grown diamond [ generative ] space, so how do we see the competition evolving? And how we able to differentiate it?

Yes. So great question. I think this is the ongoing situation with lab grown retail in India. We believe that ORIGEM, we have 2 to 3 key differentiators, which will be very visible over a long-term standpoint. One, of course, is the design strength that comes from what we see globally, global bestsellers and the backing of large of a publicly listed entity like Goldiam, which is a vendor of choice for a lot of retailers in the U.S. We are leveraging the design experience in order to bring the right and high quality of design and manufacturing into ORIGEM. So a quick example is that, especially in the ring segment, which is Goldiam's specialty in the U.S. market, Almost every ring at ORIGEM has been sold at least 200 to 250x globally before we even introduced it at ORIGEM. This is an ongoing exercise that we do every month and every quarter. Secondly, on the aspect of speed, right? So Goldiam has a specialty in manufacturing, sourcing of diamonds, manufacturing of jewelry, design expertise, and we are marrying this with a very strong, well-performing team on the retail side that has come in from some great retail background companies. We believe this is already shown as an example, in the sort of distribution that ORIGEM has tracked just within about 1.5 years of [ loans ]. As a young brand, we are perhaps one of the only ones present at some of the key malls of our country, a few of which are like Phoenix Palladium, Mumbai; R CITY, Mumbai; Elante, Chandigarh; SouthCity, Kolkata; Nexus, Koramangala, Soon to be in Phoenix, Bangalore as well and so on and so forth. Phoenix, Chennai as well. So again, the distribution strength, which -- where we are known to be a partner for key malls and mall-based companies, will further help define the longer-term trajectory for our company. And see, I think given, again, Goldiam's strength, we have a financial muscle that's available to us, partly, yes, as the QIP funds are within the company and partly also through the ongoing sort of backing of Goldiam through things like gold metal loan, which helps extend and sort of minimize the outlay of immediate inventory when we opened a new store, such that we can sort of help -- have our sales from the first 4 to 6 months of a store itself subsidized partially the gold that's being invested in each new store opening. Again, this is due to having a parentage in the form of Goldiam that is an established jeweler and jewelry manufacturer in the country, which otherwise would not be available. This, along with -- this is unique things which are unique to Goldiam, which no startup can really compete with, where I think, again, the benefit of which will play out in the longer term. In the more short and medium term, we believe distribution will be a key edge, and we are hoping to continue to build the right quality and high quality of distribution, which currently no other young competitor can compete with. Number two, further working on sales enablers, as our Chairman has mentioned, that effectively, through multiple different ways and efforts that are going on, effectively, the end goal is to increase revenue per store. That itself will help create an increased revenue per store and increase the ongoing customer base of ORIGEM, such that year-on-year same-store sales growth is extremely strong. And I think these are the initiatives which will differentiate us in the more short to medium term. We will hopefully announce new tech -- tech-driven leadership sort of opportunities as we have with the ring builder in the coming quarters too, along with policy changes, which will differentiate ORIGEM further to help that sales enabler standpoint become even stronger. And then tied to that is the fact that I don't think the VC funding will be as prevalent for your number 5, 6, 7, 8 players as it has been in the earlier days, which was effectively till date for the lab grown diamond industry, jewelry retail industry in India. So we are confident that as the next 2 years come through and store maturity increases for ORIGEM store depth and -- and store breadth also increases, we will stand out amongst competition due to the short and long-term factors mentioned earlier.

The next question is from the line of [ Anubhav Mukherjee ] from [ Prescient ] Capital.

Am I audible?

Yes, sir.

Yes. So my first question is in the B2B export business. Can you say what is driving the sharp increasing realization like from -- like last year -- last financial year to this financial year?

Thank you, Mr. Mukherjee, it's a little heavy, but I believe your question is on the realization on per piece of jewelry on the B2B business. Again, that is -- perfect, perfect. So that is defined by -- we only sell finished jewelry again, complete diamond studded jewelry. We don't do any plain gold nor do we do any loose diamonds. So on a finished jewelry standpoint, there are 2 factors that, of course, drive our ASP. I think that, of course, our quarter-on-quarter changes, but on an overall standpoint, the movement into lab grown has been very positive for our ASP as a company as a whole. Now these 2 factors are one gold, which has, of course, gone up on a year-on-year basis and the other is diamond value. So particularly in lab grown, what that means for us is that the value of diamonds utilized per piece of jewelry has also gone up, driven by the fact that we use a much higher number of carats in lab grown jewelry than we do in natural diamond jewelry. And it's this consistent movement towards more caratage per piece of jewelry in terms of diamonds as well as the baseline effect of gold and gold prices, together, that helps drive our ASP. So this is the main reason.

Yes, right. And sir, like how are you seeing the trend of like both wholesale and retail prices of lab grown diamond in like your key markets?

Sure. So as mentioned, even in our FY '26 calls, we are -- we have been consistently saying that lab grown diamond prices have reached a base. In fact, in this quarter, we have even seen prices move upwards for certain sizes, especially the smaller sides of lab grown diamonds. This is driven by, of course, labor increases as well as the pricing of [ trough ]. But it continues to come back to the point that we see wholesale prices hitting a base, and we don't see large scope for erosion of prices from where they currently stand. In that sense, we believe it's a great time to invest in inventory to sell both B2B as well as in B2C market in India. On retail, I'm sorry, Mr. Mukherjee, but we won't be able to provide great clarity there as we don't control or really review the retail prices of our customers. However, at least on the wholesale side, we can share that there is very -- there's a strong base established and prices have been fairly consistent, if not, even increasing on some of the smaller sizes.

And sir, like I was reading that there is some -- maybe I'm wrong, but like I read one article that said that there is some increased competition from like Chinese CVD manufactured lab grown diamonds, and there's more increased acceptance of like at least in the smaller caratage. So are you seeing any impact of that -- of like some perspective will be good.

Sure, sure, Mr. Mukherjee. So it's a great point of clarification also. At Goldiam, as we don't do cutting for manufacturing of diamonds or at least not on scale other than our own grown production from eco-friendly diamonds LLP. Any of such articles that talk about the prevalence of Chinese CVD diamonds or Chinese HPHC diamonds or local grown enhancement of capacity of CVD, et cetera, in fact, don't really impact us because that forms the supply side to Goldiam and now Goldiam's [ activity ]. As a largely pure-play jewelry manufacturer and distributor, any increase or change in quantum of diamond supply available will, of course, any large change will only serve to, in the long-term, benefit Goldiam, and add to our supply chain strength by enhancing the number of vendors that we work with. Again, to clarify, we don't do any loose diamond sales nor loose diamond trading than -- other than our homegrown [ rough ] grown through eco-friendly, no loose diamond manufacturing either. Everything is purchased as per jewelry demand and jewelry requirements when orders are presold to customers. So I hope that explains where we stand with articles regarding diamond supply.

I get that. But sir, just a small follow-up. The increased supply doesn't not put any pressure on the like wholesale pricing of jewelry as well? Or like we are insulated from that?

Sir, so on the -- again, this is on loose diamonds not on finished jewelry. On loose diamonds, wholesale prices have been fairly consistent. Any increase in supply is coming in with demand growth itself. Prices, again, on the wholesale side are very, very nominal compared to the cost of production itself. So there has to be a [ sea ] change in technology to further drive costs down from where they are today. Again, we are not in a position to comment if that is happening, who is working on it, where that's happening. To the best of our knowledge, given the current methods of production, prices on the wholesale side are fairly at a strong base without major scope for erosion from here.

Yes, sir. And sir, my last question is on the final demand side over a 2- to 3-year period. Can you share your perspective on how do you see the -- on the demand side, what are the trends here?

Sure, Absolutely. So let's -- just dividing that question into B2B and B2C. I think the B2B business is firming up even better than we had expected our ability to increase non-U.S. customers to deepen presence with U.S. customers, both are resulting in fruit term that is visible to our shareholders. We believe, again, there is scope for further penetration and depth within our B2B business as well as product expansion and new customer addition. So across the board, I think there is scope for Goldiam to drive jewelry sales on the B2B side upwards. We exited FY '26 about at INR 1,000 crores revenue, which was a record for us. Over the medium term of 3 to 4 years, we hope to strongly increase on that base and deliver -- have a larger company and presence, especially amongst our U.S. key customers. And management is working on this trajectory primarily, along with deepening a new presence with global wholesalers and retailers also. On the B2C side, ORIGEM is shaping up well with further [ debt ] available even with our existing stores, becoming a full stack jeweler, having a lot more presence on sales per store per month and deepening that position that we have. As previously mentioned by the prior participant, given the competition in the industry, as it consolidates over the longer 2- to 3-year period, we believe we will be in a great position to reach close to that 100 store figures that we are aiming and targeting towards, with a much stronger sales per month per store metric that again, we have targeted in totally. Overall, we believe the organization has significant runway for growth, of course, faster growth in B2C, but also as shown in Q1, very healthy and steady growth left to do in B2B as well. So we hope to continue on this path. And over the next 2 to 3 years, drive our business, which is truly amongst the largest jewelry exporters from the country. I think this is a good time to also open the floor to our Chairman and I request if any further comments. Hello?

Yes, sir.

Yes, just requesting our Chairman to add if any further comments on the longer-term growth trajectory?

Longer-term growth trajectory, I believe that we are in a great position to improve our businesses, both in B2C and B2B. And I think Anmol has clarified in depth regarding both of them. So I think we will proceed.

Yes. Just a small follow-up. Like, will it be possible to share like what share of our B2B export business is to U.S. and what is non-U.S.?

Sure, of course. As on FY '26, over 90% -- 90% to 95%, I'll be able to provide the exact number on e-mail. But in that range, that was our U.S. sales versus non-U.S. coming from the balance. Certainly, FY '27 will have some positive movement towards non-U.S. on a smaller scale, as mentioned by our Chairman. However, we will -- we would be happy to share those detailed and exact numbers on e-mail.

The next question is from the line of Bharat Gianani from [ MoneyControl ] Research.

Yes, sir. Congratulations for a great set of numbers in quarter 1. So 2 questions from my side. One is -- just wanted to check that -- we have been reading that the LGD segment has been gaining a lot of traction in the U.S. market, and hopefully, it catches traction in the Indian market as well. But on the U.S. side, I just wanted to check, what share of LGD in the overall jewelry space and what is the industry growth that the LGD is witnessing in the U.S. market? That is my first question.

Sure. Thank you, Mr. Bharat. We don't have the industry reports, but from last -- speaking to consultants within the industry, especially on the major retailer side with whom we work at Goldiam, we believe LGD share is between the 40% to 60% range depending on type of retailer, retailer segment, et cetera within the major jewelry majors and the larger corporate customer space that we can address.

Okay. And what is the growth rate that the industry is seeing on a year-on-year basis? I'm talking on the industry front, not -- because we are increasing market share, yes.

Yes, yes. So in the finished jewelry segment, and lab grown diamond jewelry in the U.S. is looking at a healthy double-digit growth. Of course, we believe that this growth will continue for the medium term ahead -- medium to longer term ahead as most large corporate U.S. retailers transition to work, majority and predominant lab grown diamond showcase over the coming few years. So it's in healthy double digits on a finished jewelry standard.

Okay. And second, what would be our market share in the U.S. market as far as the overall LGD jewelry is concerned?

Yes, Mr. Bharat, still very, very small. Just to give an idea, our largest customer in the U.S. does about $6 billion of retail sales. They would have about to 2 to 2.5 -- about $2 billion of -- $2 billion to $2.5 billion of wholesale purchase value, which is our addressable segment with them. And we currently form about 40 -- $35 million to $40 million of annual sales to them. So less than 2%. There is scope to, certainly triple if not quadruple those numbers, and that is just our share with the largest retail customer that we currently have. There are major retailers who we don't currently work with, who we would love to add on to our customer profile over the coming years as well as I've mentioned, further deeper presence with existing customers, as highlighted through this example of our largest current customer.

Okay, okay. Sir, just one clarification. This LGD, 40% to 60% penetration you said, that would not be of the overall jewelry market, there will be some particular segment that you're talking of for the U.S. market?

Yes, Mr. Bharat, that's with the major retailers -- corporate and major retailers. Effectively, those are retailers that address the same, more or less addressable price point and segment that Goldiam sells to, which is upper middle and premium income jewelry, not luxury or super luxury. That is not being manufactured in India at the moment.