DPABHUSHAN - D.P. Abhushan

📊 NSE: DPABHUSHAN 🏢 Diamond Cutting / Jewellery 📅 Last Updated: 12/13/2025 21:19

💰 Financial Performance

Revenue Growth by Segment

Gold jewellery remains the primary driver contributing 91% of total revenue. Silver segment showed exceptional growth of 103% YoY in H1 FY26, while diamond-studded jewellery experienced a slight decline of 3% YoY during the same period.

Geographic Revenue Split

The company operates 10 branches across Madhya Pradesh (Ratlam, Indore, Bhopal, Ujjain, Neemuch) and Rajasthan (Udaipur, Bhilwara, Kota, Banswara, Ajmer), with a total retail area of 54,217 sq. ft. as of November 2024.

Profitability Margins

Profitability showed significant improvement in Q2 FY26 with PAT margin at 5.32% compared to 2.50% in the previous year. H1 FY26 PAT margin stood at 5.83% (INR 87.88 Cr) compared to 3.33% (INR 50.21 Cr) in H1 FY25.

EBITDA Margin

EBITDA margin for Q2 FY26 improved to 7.83% from 3.79% YoY, a sharp 404 bps increase. For H1 FY26, margins reached 8.68% versus 5.06% last year, driven by better absorption of overheads and cost efficiencies.

Capital Expenditure

The company is planning to raise up to INR 600 Cr through a Qualified Institutional Placement (QIP) to fund its expansion roadmap, including new self-owned outlets and digital infrastructure.

Credit Rating & Borrowing

Credit rating was upgraded in January 2025 to CARE A-; Stable (Long-term) and CARE A2+ (Short-term) from CARE BBB+; Positive, reflecting healthy growth in scale and comfortable financial risk profile.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include Gold bullion (representing over 90% of costs), Silver, Diamonds, and Platinum.

Import Sources

Not specifically disclosed in available documents; however, the company follows an inventory replenishment model for hedging gold price volatility.

Capacity Expansion

Current retail footprint is 54,217 sq. ft. across 10 branches. Planned expansion includes entering Gujarat, Chhattisgarh, and Maharashtra markets over the next 4-5 years.

Raw Material Costs

Raw material costs are highly sensitive to gold price volatility, which caused a 4% YoY revenue decline in Q2 FY26 despite festive demand.

Manufacturing Efficiency

The company focuses on high-turnover retail operations rather than just manufacturing, maintaining a wide variety of designs to drive footfall.

📈 Strategic Growth

Expected Growth Rate

20-25%

Growth Strategy

Growth will be achieved through a multi-pronged strategy: expanding the physical store footprint into Gujarat, Chhattisgarh, and Maharashtra; launching an e-commerce platform by the end of FY26; and increasing the revenue share of high-margin diamond-studded jewellery to a target of 10%.

Products & Services

Gold Jewellery, Diamond Jewellery, Platinum Jewellery, Silver Jewellery, and other precious metal ornaments.

Brand Portfolio

DP Jewellers

New Products/Services

Launching a dedicated e-commerce platform in Q4 FY26 and increasing focus on premium diamond-studded collections.

Market Expansion

Targeting pan-India presence with immediate focus on Madhya Pradesh, Gujarat, Chhattisgarh, Rajasthan, and Maharashtra over the next 4-5 years.

🌍 External Factors

Industry Trends

The industry is seeing a shift from unorganized to organized retail. Management expects strong demand from approximately 47 lakh weddings scheduled between November 2025 and March 2026.

Competitive Landscape

Competes with large pan-India players like Kalyan Jewellers and Tanishq, as well as numerous local unorganized jewelers.

Competitive Moat

Moat is built on an 85-year legacy, strong brand trust ('DP Jewellers') in central India, and high operational efficiency (inventory turnover of 5.47x).

Macro Economic Sensitivity

Highly sensitive to gold price fluctuations and consumer discretionary spending power, especially during the wedding season.

Consumer Behavior

Demand is heavily cyclical, peaking during the wedding season (Q3/Q4) and major festivals like Diwali and Akshaya Tritiya.

Geopolitical Risks

Susceptible to global gold price trends which are often influenced by geopolitical stability and central bank policies.

⚖️ Regulatory & Governance

Industry Regulations

Operations are subject to hallmarking mandates, gold import/export restrictions, and GST regulations governing the Gems & Jewellery sector.

⚠️ Risk Analysis

Key Uncertainties

Gold price volatility (potential impact on margins if not hedged correctly), regulatory changes in gold trade, and intense competition in new geographic markets.