💰 Financial Performance

Revenue Growth by Segment

Total revenue grew by 115.7% YoY to INR 1,772.53 Cr in FY25. Segmental performance shows Bullion at 48% (INR 850.53 Cr), Wholesale at 47% (INR 833.81 Cr), and Retail at 5% (INR 88.59 Cr). H1 FY26 revenue continued to grow at 25.94% YoY reaching INR 952.76 Cr.

Geographic Revenue Split

The company has a high regional concentration with Tamil Nadu contributing 71.1% (INR 1,259.91 Cr) of FY25 revenue. Other cities and states account for the remaining 28.9% (INR 512.02 Cr), reflecting an early-stage national expansion strategy.

Profitability Margins

Profit After Tax (PAT) increased by 64.5% YoY to INR 44.92 Cr in FY25. For H1 FY26, PAT grew by 93.66% YoY to INR 38.70 Cr, driven by a better product mix and higher contribution from premium categories.

EBITDA Margin

EBITDA grew 55% YoY to INR 64.92 Cr in FY25. EBITDA margins saw significant expansion in H1 FY26, rising 184 bps YoY to 5.64%, while Q2 FY26 margins reached 5.94% (up 186 bps) due to strong operating leverage.

Capital Expenditure

Long-term borrowings increased from INR 18.64 Cr to INR 25.60 Cr in FY25, suggesting investment in long-term assets or store infrastructure. Specific planned CAPEX figures for FY26 were not disclosed.

Credit Rating & Borrowing

Finance costs decreased by 22.3% YoY to INR 3.73 Cr in FY25 from INR 4.80 Cr, despite a doubling of revenue, indicating highly efficient debt management and potentially improved borrowing terms.

⚙️ Operational Drivers

Raw Materials

Gold (ornaments and bullion) and Silver (bullion) constitute the primary raw materials, accounting for the bulk of the cost of goods sold (estimated >90% of total expenses).

Import Sources

Raw materials are sourced through the India International Bullion Exchange (IIBX) and structured metal loan arrangements to ensure steady supply and price stability.

Key Suppliers

The company utilizes IIBX as a primary procurement platform and maintains strong banking relationships for gold metal loans.

Capacity Expansion

The company is focusing on expanding its national presence beyond its 71.1% Tamil Nadu base and increasing its footprint in the B2B wholesale segment which currently drives 90% of revenue.

Raw Material Costs

Raw material costs are highly sensitive to global commodity prices. The company manages this through a prudent hedging policy and procurement through IIBX to minimize exposure to price volatility.

Manufacturing Efficiency

H1 FY26 performance was characterized by higher inventory efficiency and disciplined growth, particularly in premium product categories.

Logistics & Distribution

The company operates a structured traceable business process from procurement to final sales across retail, wholesale, and bullion segments.

📈 Strategic Growth

Expected Growth Rate

25-30%

Growth Strategy

Growth will be achieved through aggressive expansion of organized retail, increasing the share of high-margin premium categories, and leveraging digital-first platforms to capture evolving customer preferences.

Products & Services

Gold ornaments, Gold bullion, and Silver bullion sold through retail and wholesale channels.

Brand Portfolio

Khazanchi Jewellers.

New Products/Services

Focus on premium jewellery categories and digital-first engagement platforms to drive higher margin sales.

Market Expansion

Expanding national presence beyond Tamil Nadu to reduce geographic concentration risk (currently 71.1% in one state).

Market Share & Ranking

Not disclosed, though the company identifies as a significant player in the South Indian market with a 50-year legacy.

🌍 External Factors

Industry Trends

The industry is shifting toward organized players and digital platforms. Khazanchi is positioning itself by expanding its wholesale reach and adopting digital-first customer engagement.

Competitive Landscape

Highly competitive with organized national players expanding aggressively and digital-first platforms gaining market share.

Competitive Moat

The company's moat is built on a 50-year legacy of trust, 100% BIS hallmarking, and deep-rooted craftsmanship, which are difficult for new entrants to replicate quickly.

Macro Economic Sensitivity

High sensitivity to discretionary spending; any economic downturn or inflationary pressure could temper consumption of luxury items like jewellery.

Consumer Behavior

Shift toward premium categories and digital savings experiences (online payments for installment schemes).

Geopolitical Risks

Global geopolitical tensions directly impact gold procurement costs and supply chain stability, as gold is a primary safe-haven asset.

⚖️ Regulatory & Governance

Industry Regulations

Strict adherence to BIS hallmarking, Anti-Money Laundering (AML) norms, and evolving customs duty policies for gold imports.

Taxation Policy Impact

The company complies with GST and Income Tax Act requirements; no undisclosed tax transactions were found in recent assessments.

Legal Contingencies

The company reports no pending litigations that would materially impact its financial position as of March 31, 2025.

⚠️ Risk Analysis

Key Uncertainties

Commodity price volatility and regulatory changes regarding gold imports/GST are the primary business uncertainties.

Geographic Concentration Risk

71.1% of revenue is concentrated in Tamil Nadu, creating a high risk of regional economic or regulatory impact.

Third Party Dependencies

Significant dependency on banking relationships for liquidity and metal loans to fund the capital-intensive inventory.

Technology Obsolescence Risk

Growing reliance on digital platforms introduces cybersecurity risks; mitigated by multi-layer access controls and regular IT audits.

Credit & Counterparty Risk

High exposure in the B2B segment (90% of revenue) necessitates disciplined credit management for wholesale creditors.