Please note that this conference is being recorded. I now hand the conference over to Mr.

Parth Patel. Thank you and over to you.

Thank you. On behalf of MOFJI InTime, I welcome you all to Sky Gold and Diamonds Limited Q2 and H1 FY26 earnings conference call.

On the management side, we have Mr. Mangesh Chauhan, Managing Director; Mr.

Siddharth Sipani, Chief Financial Officer. I hope everyone had an opportunity to go through our investor deck that we have uploaded on exchange and company's website.

I would like to mention a short disclaimer before we begin the call. This call may contain some of the forward-looking statements, which are completely based upon our belief, opinion, expectations as of today.

These statements are not a guarantee of our future performance and involve unforeseen risk and uncertainties. With this, now I hand over the call to Mr.

Mangesh Chauhan. Over to you, sir.

Thank you, Parth. Good evening, everyone.

Thank you for joining us today as we discuss our Q2 FY26 quarterly performance. In the current quarter, company recorded its highest ever quarterly revenues and PAT, showing [resilience?]

and strength. Revenue for the quarter stood at INR 1484 crores, registering a growth of 93.1% year-on-year.

PAT stood at INR 67 crore, registering a remark growth of 82% year-on-year. Volumes have been increased to 544 kgs per month for this quarter, registering a 20% growth versus Q1 FY 26.

Despite the elevated gold prices, Indian consumer has been resilient and continues to stand strong in the festive season. The demand for gold is not dampened, instead people are adjusting budget by exploring lightweight designs, lower carat gold like 9 carat, 14 carat, or diamond-set pieces.

This was reflecting in our quarterly performance as well, as now 18 carat business stands to 87%. Studded business has been now doubled to 1.5% of total revenue.

Traditionally dismissed as a poor investment, lower carat gold jewellery is now being seen as a practical and stylish choice for daily wear. The mindset among young buyers is clear: jewellery is meant to be worn, not locked away.

Still 22 carat continues to be favorite of the Indian consumers. Also we can simultaneously see a shift from unorganized sector to a organized sector, as organized players are becoming innovative, providing convenient installment or gold exchange schemes, lightweight machine-made jewellery tapping into e-commerce, and expansion of stores into untapped market in Tier 2, Tier 3, Tier 4 areas, thus ensuring higher than industry growth.

Today jewellery is not just a cultural emblem, but also a fashion statement, reflecting individuality and style. As Sky Gold and Diamonds Limited, we remain committed to blending this timeless heritage with contemporary design and craftsmanship.

Our business model, operating on B2B platform, enable us to serve a vast network of leading jewellery retailers and renowned brands, making our products available in over 2,000 showrooms across India. The growth is a testament of our operational efficiency, customer trust, and ability to adopt evolving market needs.

Discussing our performance this quarter, currently our advance gold model stands at 7% in Q2 FY26. We have also improved our working capital days cycle by 7 days in September 25 compared to March 25 on the back of the better inventory management Q2 FY26 compared to last year.

This quarter we have successfully completed the final transition for Sweet Bengal Private Limited. This business will adopt 100% advance gold business, which is expected to strengthen our working capital cycle.

Also this company has tax incentive benefits under Section 115 BAB, resulting in improved PAT margins. To further expand our customer portfolio and deepening market penetration in the high-growth traditional jewellery segment, we have entered into a non-binding term sheet to acquire a majority stake in Shri Rishabh Gold, a reputed Mumbai-based jewellery firm.

This acquisition marks as a significant step in Sky Gold and Diamonds strategy to establish India's largest and most trusted mangalsutra-focused enterprise, as Shri Rishabh Gold, known for its strong presence in the mangalsutra segment, brings with it a rich client base that includes one of the largest jewellery brands. This client relationship will be strategically onboarded by Star Mangalsutra, subsidiary of Sky Gold and Diamonds.

To expand our international footprint, we have established a new B2B sales office, Sky Souq Jewellery Trading LLC in Dubai, UAE. This move is aimed at strengthening our foothold in the Middle East, a region identified for its robust demand for premium jewellery, particularly in UAE.

The strategic presence in Dubai positions us closer to key markets and enhance our responsiveness to the regional demand. I am pleased to share that our exports have doubled this quarter, reaching around 150 crore, reflecting the early success of this initiative and reinforcing our confidence in continued global growth.

To support our growth, we have strengthened our team by promoting Mr. Siddharth Sipani as the CFO, who previously headed the finance department as a group finance controller and brings over 16 years of expertise in finance and accounts, global fundraising, due diligence, compliance, auditing across diverse industry sectors.

This will help me to focus on strategic business initiatives. Also in order to strengthen our board, we onboarded Mr.

Virupaxi Kole as Independent Director, who headed gems and jewellery segment for Kotak Mahindra Bank. He brings with him 36 years of extensive banking expertise across different banking verticals.

During the quarter, we initiated our GML program. The program is taking longer time than anticipated due to delays in documentation and supply constraints.

Going forward, this initiative marks a significant step in optimizing our financial structure, as GML offers a lower cost of alternative to traditional working capital facilities. Our target is to scale up GML utilization going forward, reinforcing our commitment to prudent finance management and operational agility.

During the quarter, we realigned the accounting policy for depreciation across Sky Gold Group. The same has been realigned with WDV to SLM so as to better match the depreciation expenses with the expected pattern of usage of assets.

This change has resulted into currently half-year PAT to be higher by .08%. Now I will discuss our Q2 H1 FY26 financial performance.

The consolidated revenue for the quarter stood at 1484 crores versus 768 crore, thus registering a growth of 93% year-on-year. The gross margin was 8.2% as compared to 6.5% on Q2 FY25.

EBITDA for the quarter was Rs 99 crore compared to 38 crore, showing a growth of 157%. EBITDA margin for the quarter stood at 6.7% as compared to 5.1% of Q2 FY25, improved to 163 basis on year-on-year basis.

PAT for the quarter stood at 167 crore as compared to 36 crore in Q2 FY25. PAT margins for the quarter stood at 4.5% as compared to 4.8% in Q2 FY25, hence reducing to .26 basis on year-on-year basis.

Moving to the financial performance, the consolidated revenue of H1 26 stood at 2615 crore versus 1491 crore in H1 FY25, thus registering a growth of 75% year-on-year basis. The gross margin is 8.1% as compared to 6.4% on H1 FY25.

The EBITDA for H1 FY26 was 171 crore compared to 76 crore in H1 FY25, showing a growth of 125%. EBITDA margin for H1 FY26 stood at 6.5% as compared to 5.1% in H1 FY25, improving to 145 basis on year-on-year basis.

PAT margins for H1 FY26 stood at 110 crore as compared to 57 crore in H1 FY25. PAT margin for H1 FY26 stood at 4.2% as compared to 3.9% in H1 FY25, hence improving 34 basis on year-on-year basis.

We have delivered a strong performance for H1 FY26 and remain on track to achieve our target revenue of 5400 crore by '26, driven by new client acquisitions, operation efficiencies, and enhanced management capabilities. Now I request the moderator to open the floor for questions.

Thank you. We will now begin the question-and-answer session.

Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two.

Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

A reminder to all the participants that you may press star and one to ask a question. A reminder to all the participants that you may press star and one to ask a question.

[unclear] not able to join the Q. [unclear] In the Q&A Q.

Thank you.

A reminder to all the participants that you may press star and one to ask a question. The first question comes from the line of Chandan Mishra from Finvestor.

Please go ahead.

Good evening, sir. Congratulations on very good set of numbers.

Thank you,

sir. Sir, my first question related to revenue share from after acquisition of Ganna Gold, sir.

How much contribution did Ganna Gold have in our revenue share?

We acquired this, we renamed it as Speed Bangle, and we completed acquired in August mid. We got 25, 30 days to work.

We got 41 kgs something sales in this quarter, and next quarter it will be 50 kg per month.

Pure, sir, 50 kg per month. Next question, sir, related to volume.

Current volume of export order after establishing UAE office, sir?

We already opened the Dubai office. Official opening was 7th, 8th November.

We opened last month only in October. This quarter full-fledged sales will come, but again we reached 150 crore sales this quarter by exports.

Sir, current run rate of volume, sir?

Volume totally? We have done a 554 kgs of volume per month basis versus 454 kgs last quarter.

We have grown by 20% in volume.

Are we on track to achieve 650 to 700 kg

guided for next quarter? We are on track.

In the second quarter Speed Bangle 50 kg per month will also be added. We are on track to reach 630 kg next quarter.

Okay.

Thank you, sir. I will join the queue for further follow-up questions.

Thank you. The next question comes from the line of Deep Shah from Equirus Securities.

Please go ahead.

Hi, sir. Thanks for the opportunity and congratulations on strong set of numbers.

A couple of questions from my side. First is on the festive shift side.

This time around, Navratri and Diwali were a bit early. When I see your export revenue on a sequential basis, it was largely flattish, which means the growth was largely domestic business driven.

Should we consider this time around there was some preponement in terms of revenue bookings, and third quarter around we should, on a sequential basis, should we see some moderation in terms of revenue? An additional question attached to it is around inventories.

If you see inventory days has improved, is it again because of the preponement of festive, or am I missing something over here?

Again, about the first question that this quarter Diwali was earlier, we enjoyed the sales in September and all. This quarter we are having a good orders for wedding season is going on for January, February, and all.

This quarter wedding orders are very nicely placed by the customers. This quarter also is very good by volume also and revenue also.

Again, the export side, we stopped direct export in October month. Direct export to the customers and we told them that you can procure from the office.

This was a transition period of 15 days. Now from November month, they are taking directly from our office, the dispatches and all.

You can see in this quarter exports will be very good. Direct export stopped in October month for 15, 20 days.

Again, inventory days is a decent days. It's not about the pre-dispatch or something.

This will continue in next quarter also and coming quarter also inventory days will be at this run rate only because of the ERP system and we are done better in the inventory aligning and all. You can see revenue for next quarter marriage season is very good.

Export, you will see the office has started from October month. We have officially opened on 7th and 8th, we have kept the opening dates and our client, all the bosses of the corporates also, they have given the testing order also for us.

From November, this quarter the export sales will be very good.

Okay. On a sequential basis, this quarter around we did 1500 crore of top line on consolidated basis.

Next quarter onwards, third quarter onwards, should we see sequential growth in this 1500 crore revenue base as well? One more thing to it, any update on revenue guidance?

Because we have seen a very strong first half of the year. What will be the guidance for '26 and '27, both on top line and margins?

We do not talk on the numbers perfectly. We are not allowed to talk, but we are very good, and we are expecting Q3 to be the best of our quarter this quarter, on the revenue side and the volume also.

Again, export you can expect 10% to 12% of the overall sales from next quarter onwards, and again going ahead to 15%, 20% by 2027 March. Okay.

Any update on guidance, sir? '26 and '27 top line and margin guidance?

Already we have given the guidance of 5400 crore and 7600 crore and a PAT margin of 4.25%. 4.25% we will be conservative saying.

4.25%. Yeah.

Okay. Thank you.

Thank you. The next question comes from the line of Palash Kavale from Nuvama Wealth.

Please go ahead.

Yeah. Thank you for the opportunity, sir, and congratulations on very good set of numbers.

My first question is on margins. What was the driver of such a good margin expansion, and is this sustainable?

You can see we have improved our gross margin by .20 basis. Our advance gold business has improved from 5% to 7% and our studded natural diamond jewellery has gone up from .7% to 1.5%.

This is doubled the sales in this quarter. That's why our gross margins has gone up.

Sir. Sir, again on PAT, if I look at your PAT margins, for this quarter PAT margins are already at 4.5% and gold metal loan has not started kicking in.

Do you expect these margins to go up going forward again, because the contribution from advance gold and studded business will also increase? Is this a right assumption?

We have implemented 8% to 10% the advance gold business. Little bit impact is there of GML in this, 8% to 10% loan is shifted to gold metal loan.

Again, the depreciation format has been changed. That's why .10 basis was that format impact because we are from WDV to SLM system.

Again, some GML benefits is yet to come. 60%, 70% is going to shift in two quarters or something because that process is going slowly because there is some availability concerns and documentation process going on.

Other than that, you can assume we can be at 4.25% or conservative 4.3% and GML benefits is still yet to come, let's do it. Okay.

Okay. Yeah.

Sir, will we see more acquisitions coming in because there might be more consolidation happening in the industry as there is a shift from unorganized to organized? Are you looking at more acquisitions going forward?

Right now there is no need for any acquisition, the company, for coming forward 2 to 3, 4 years because already we have all the products on board. We are into 80% product which is sold in the retail store.

We don't want to be 20%, 25% which are very heavy, which are bridal jewellery or kundan polki jewellery which is not our inventory, which are 5 lakh, 10 lakh, 15 lakh inventory. Again, we were lacking tennis chain, so that's why we've done a small acquisition, small company, because to onboard the largest leader of the industry which this company holds.

I don't think there is any acquisition plan in future for 2, 3 years.

Sir. Sir, again on gold realization, if I consider your Q2 realization and just calculate on the basis of 900 kg per month that you've guided for next year, your revenue looks very big.

That is very big from your guidance. Even if I consider some advance gold business contribution going up, still 7600 looks lower than, because of the gold price rise.

How should we look at this?

This is the last quarter exit quantity we have told, 650 or something kgs. Exiting in the March quarter, we have taken average rate of 90, 95,000.

Let's see how the rate goes and all. We have taken a conservative number, and we'll stick to that.

Let's see how the gold rates goes. We have taken a conservative number, and 650 is our exit number for March quarter.

Sir, I'm talking about next year. Next year you have guided for 900 kg, right?

Yeah. We have taken the average rate of 90, 95,000.

If rates goes up and stand to 1,20,000, 25,000, then the numbers will go up. Let's see how the gold rate goes, is comes down or whatever, how it plays.

Where

is the stability come. We every time take the conservative number, and we'll stick on to 7600 crore.

Okay.

Okay. Sir, any data on number of pieces shipped?

Because as your product mix changes, I think amount of gold required would be lesser for lower caratage ornaments. The number of pieces shipped must have grown higher than the gold volume.

Is that assumption right?

What are you telling? Pieces.

Okay.

Yeah.

Okay. Lower caratage is very low volume.

You can see India 80% is 22 carat and 15% is 18 carat, and this 9 carat, 14 carat is below 1%. It will take time to grow 5 to 10 years to come up at 4%, 5% of the sales.

Right now we are at 14%, 15% 18-carat sale and 80% at 22-carat sale. This 9 and 14 carat volumes are very low as growing up.

It will take 5 years to grow. Again, 22 carat is the major leader in India.

Okay. Okay.

Sir, last question. How do you see gold prices in next one year?

I think from last 20 years, we have seen a huge amount of investment by route of ETF and Sovereign Gold Bond, which was not there 5 or 10 years back, ETFs were not there so much. ETF is buying like 150, 200 ton per year, and central banks are buying.

I think I'm seeing in next 3 to 4 years gold appreciating by 20%, 25% yearly basis.

Sir. Yeah.

That's it from my side. Thank you for answers, and all the best for upcoming quarters.

Thank you.

Thank you. The next question comes from the line of Sunil Jain from Nirmal Bang Securities.

Please go ahead.

Thanks for this opportunity and congrats on good results. Definitely we are seeing some improvement in the inventory, but still this operating cash flow continue to remain negative.

It's over 100 crores. Can you give any indication when it is likely to neutralize or come into positive?

Surely we will be cash flow positive after 27th March. We'll be short in 27 March by 70, 80 crore, 100 crore, which we have already raised the debts for that.

We'll be surely cash flow positive after 27 March when our PAT will be above 300 crore and above.

You mean to say '26 will be negative and '27 will also...

After 27 March will be positive 100%.

Okay. Fine.

Fine. This metal loan, is this likely to help it to improve this negative cash flow, and how much it can improve?

Gold metal loan is just a change from cash limits to gold metal loan. It will not change the cash flow structure, but it will help us to reduce our interest cost and borrowing cost.

Okay. The advance metal, that add the basically job charges, not the full revenue?

Only job charges. That will again help us to improve our working day cycle and cash flow positive.

That's why we are telling that we are targeting to be at 10% to 12% by '27 for advance gold business. That will again help us to reduce our working cycle, and we'll be cash flow positive by 27 March.

Again, export business is of less credit, and that will also help us to improve our working cycle. In advance gold business, only the making charge is done by the billing, and that will only add up to revenue.

That will help us to add our gross margin and EBITDA. That's why our gross margin this quarter also was better because of advance gold business rise.

Just to clarify, this Ganna Bangle was 41 kg per month in the second quarter, and this will increase to 50 kg per month?

Already we got 25, 30 days to work after acquisition. We have done 41 kgs in 25 to 27 days, next quarter 150 kgs will be added.

Okay. We had only 21 days consolidation in the...

25 days or, yeah. Consolidation was two months, but we got 25, 30 days to work with transition period and all.

Right. Sir.

Thank you very much.

Thank you. The next question comes from the line of Smith Gala from RSPN Ventures.

Please go ahead.

Thank you for the opportunity. Congratulations on a good set of numbers.

Just wanted to understand more about the gold metal loan. How does it work?

What sort of margins does it require, and what sort of limits do we get, and what is the maximum debt we can get on the leverage that the balance sheet will provide us?

We are at net debt of 450 crore. We can go up to 70%, 75% or 80% of limit, that is 350 crores.

That will help us, gold metal loan is available for 3%, 3.5% of interest cost and other expenses is come up to 4% versus 9.5% for the CC limits. We'll save 5.5% of interest going ahead on the borrowing cost.

We can go up to 75%, 80% of the limit of gold metal loan, and we have to keep a 10% margin for that to avail the, from the CC limit we have. We can, if we have a 350 crore of limit of gold metal loan, we can use up to 300, 310 crores of, 320 crores of gold metal loan.

Again, we can improve .25 or .20 basis of PAT margins when we avail. Already we have availed 8% of gold metal loan in this quarter, that's why our little bit PAT margins have improved.

Coming quarters we will be availing the other. We are saying it from long time, I think, but in this point we are a little bit delayed because of the availability and documentation and all.

There is a process and availability, sometimes availability scarcity is there, we have to go again to the CC limits and all. Slowly, slowly we'll go up to GML by 75%, 80%.

Just I missed it, just to reconfirm, what will be the total debt which we can take with gold loan and other debt which we can take on our balance sheet?

I will repeat, if our debt is 450 crore, we can go up to 80% of 430 crore to gold metal loan, which will be approximately 330 or 350 crore.

No. I'm talking about

total debt.

Total debt, with gold metal loan and other debt also. At the moment, 450 is a net debt.

Where this 450 number can go maximum? So

80% we can avail gold metal loan, 20% banks keep a gap of CC limits. I hope you understand.

80% of the limit we can convert into gold metal loan. Whatever limit we enjoy, 80% we can shift it to gold metal loan.

I'm talking about the limit. What is the limit that we enjoy?

Yeah. I will add.

At this point of time, we have got 170 crore of sanctioned GML facility. We are negotiating with other bankers as well to sanction the GML facility.

We expect that this 170 crore, considering the current set of bankers, can go up to 350 crores. That change in the banking terms takes some time, but the talks with the bank is ongoing.

I hope I have answered what you were trying to ask.

Yeah. Next question from my side is how is the progress on the new facility that we are developing going on?

Yeah.

We are planning to start the construction of this facility in 2000, April from April 2026. It will take three years to make the facility, and 2028 we are planning to open, end of the 2028, when our 1.2 ton of facility will be exhausted.

It's on a planning process. We are taking the quotation and all.

It will take 4, 5 months to plan, and we are planning to start making the facility from April 2026.

To manage the funding, etc., for the construction, what are the plans for funding for the same?

We'll need 150 crore for construction basis and 100 crore for furniture, fixture, and machinery which will be needed in 2028. In three years, we'll put 50, 50 crore from internal accruals, as we are expecting extra 50 crore PAT in each year because so much acquisitions we have done and again, new products we have started.

We have onboarded Rishabh Gold also and which is also an advance gold business, Speed Bangle also. What we have given guidance, we are expecting 50 crore extra PAT in each year.

From this we will fund our construction part. In three years, every year we'll remove 50 crore and invest in that.

After 2000 in 2028 we will need 100 crore for furniture, fixture, and machinery. Tranches wise, we'll open out of the 18 floor, we'll open 9 floor first, and in four years we'll open remaining 9 floors.

We'll take term loan for that furniture, fixture, and machineries, and that interest cost will be on the balance sheet, but our sales will be 1.5 ton or 2 ton that time.

One final question from my side. We have enabled higher borrowing resolution in the board meeting, what was the rationale behind it?

It is more to do with the operational part of it because as per the Act, we need to have the approval of the shareholders per se, and that's why we have gone for a higher value per se because this is more from a long-term perspective.

Okay. Okay.

Thank you. I'll join back the queue.

That was helpful.

Thank you. The next question comes from the line of Ankush Agrawal from Surge Capital.

Please go ahead.

Yeah. Hi, sir.

Thank you for taking my question. Sir, can you give a split of the volumes that we have done during the quarter between standalone, export, Star, and Sparkling?

In Ganna, you have told that you have done 41.

Yeah. In terms of volume, we have totally done 544.

Out of that, in Sky it is 400 odd. In Star and Sparkling, it is 55 each.

55 each?

Yeah.

Okay. Out of this total, how much would be export volume-wise?

In terms of export, since export is 10%, I don't have that number, but broadly it should be close to 40 kgs per se.

Okay. Okay.

That was all. Thank you.

Thank you. The next question comes from the line of Agastya Dave from CAO Capital.

Please go ahead.

Am I audible?

Yes, sir. You are audible to us.

Thank you very much for the opportunity. Excellent execution, sir.

Your numbers have been very, very good. Sir, I had a question on capex which you have answered.

The only other question that I have is when the results came out last quarter, there was a lot of selling from the promoters and it was executed in a very destructive manner. It was done very aggressively and it completely decimated the stock price for a few months.

Sir, it's your shares, I don't have any say in that. Is there any other plan, sir, on the selling from the promoter side, or are we done for the time being?

We are already done for 2, 3 years or 5 years from here. We have appointed a good branded merchant banker for the execution of last two quarters before, but there was some execution lack from the merchant banker's side.

I accepted and apologize for that, but there is no plan for...

It's not your fault. It's not your fault, sir.

If the execution was screwed up by merchant banker.

I understand. We apologize again, and there is no plan for 3 to 5 years for any dilution from the OFS also and for the dilution also because we are nicely funded.

We'll develop this facility from extra what we have guided the PAT, we'll make extra. We are expecting good PAT extra from these three years for the acquisition we have made, and we'll take care every year 50 crore fund from each year from this extra income we'll make

and deploy

in that. There will be no outflow from the guidance PAT, we are sure that.

Again, yeah, this is a...

Understood. Sir, just for the sake of repetition, you said 150 crores would be the total capex for the new facility, and it'll be 50 crores per year for the next three years, right?

Yeah. '26, '27, '28.

Perfect, sir. Thank you very much, sir, and all the best, sir.

Again, sir, on the operational side, the execution has been very, very good. Congratulations for that.

Thank you, sir.

Thank you so much. Thank you, sir.

Thank you.

Thank you. The next question comes from the line of Deepanshu Suman from Satva Ventures.

Please go ahead.

Hello, sir. Congratulations for fantastic results.

I think quarter-on-quarter, we are executing very well.

I just wanted to double-check

that industry has declined by about 15% to 25% in terms of volume, and we have increased by almost a similar rate. What kind of contribution are we getting from the new clients what we have acquired in last few months like Indriya, Aditya Birla, the Indriya guy, the CaratLane, and Reliance, and PNG, etc.?

What kind of the volumes these guys have started to contribute?

Again, CaratLane is at 10 kg per month, 10 to 12 kg. Again, Aditya Birla started with 3, 4 kg per month.

Reliance is yet to start because the process is getting over, and orders are getting to come because we are already onboarded, we have done the agreement phase and all. PNG also we are at, I think, 6, 7 kgs per month, started from 1, 2 kg.

Now we are 6, 7 kg. We are getting the volume from the new client also, and the existing client is the major leader to give this growth and all.

Again, we are onboarding new clients every quarter. This is also helping us to gain the volume, and existing client also help taking the lead.

Okay. Can you give the number for your top three clients, how much they are contributing in percentage, and how much are coming from top five?

Top three is 25% to 27%, and top five will be 30% or 32% something.

35%.

Okay. The top five guys are contributing was 35%?

32%, 30% to 32%. 30% to 32%.

Okay. Okay.

Understood, sir. On this new acquisition what we have done for this Rishabh Gold, it seems that we have acquired 51%.

There are two parts on this. One thing, what I saw that this guy does about 49 crores of revenue annually, but about 3.5 to 4 crores of EBITDA.

On advance gold business, why their EBITDAs are so low, as we've seen their numbers, etc.? Why the EBITDA is so low because if they are doing advance gold, it should be higher?

Basically, with Shri Rishabh Gold per se, say we are expecting that the operational efficiency to flow in the long term per se, and that's why we have done this acquisition.

This company has a India's largest jewellery brand onboarded this company, and as a volume of 40, 50 kg of the largest brand. This will come our umbrella, and this will help us to improve our advance gold business much better.

Okay. Understood, sir.

Do we have any plans to increase the stake because we have acquired 51%? Are there any plans that we can go to say 100%?

We have just acquired. This will take also 3, 4 months.

We'll work for one year and we'll see in future we'll acquire 100%.

Okay. The promoters are intending to sell up to 100% also?

In future we'll take the decision. Right now they were intending to sell 51% because smaller manufacturer are not able to cope up on the designing part and the larger facilities they want to work.

We have a large facility at Star Mangalsutra and they will come to our facility, we'll shift this facility to our facility. The larger brand of India will be onboarded by us.

Okay.

Your advance gold business, I just missed the percentage. How much percentage of revenue has come from advance gold, and what is the exact number?

I think it's about 20, 22 crores, yeah? Advance gold?

In terms of advance gold business, in terms of volume, it is 6% of the total volumes.

Okay. In terms of revenue?

Revenue, in terms of that around 8 crores in terms of absolute revenues.

Okay. 8 crores from advance gold has come in.

About say 60, 70 basis point gross margin improvement might happen because of this advance gold, huh? This is about...

Already we were at 4%, we came at 6%. That's why our gross margin has gone up by .20 basis.

Okay.

Because the diamond jewellery sale has expanded and the advance gold business is expanded.

Understood, sir. Your 170 crore GML facility, what you have got, how much of that you have utilized and at what rate this GML facility is coming in?

Out of 170 crores, currently we are utilizing close to 40 crores. It comes at a overall cost of 4%

by

the time that it comes, yeah.

Okay. Can we utilize the entire 170 crore in this financial year?

We are targeting that we will ramp up the GML utilization, and we expect to utilize 150 to 170 crores by the Q4 of '26.

Are there some say hindrances in this? Because if the sanction has already happened, then we can move into that number quite fast.

Basically, there are two hindrances. The sanction has happened, but the bank documentation is taking significant time.

That's one thing. Secondly, there are also supply constraints because we have to order the GML and they procure the metal from their suppliers in the, there are supply constraints.

That's why the offtake has been a bit slower. As we have already indicated in the past that we endeavor to increase the gold metal loan utilization because it is a PAT-accretive proposition.

We are working on both fronts. One is faster conversion of the current limits to GML facility.

Parallelly, we are also talking to the current bankers as well and trying to get the additional GML limits as well.

Okay. Understood, sir.

Sir, last point from my side. We have announced a very large order from the Malaysian client.

How we are moving on that, and is it not going in the way what we were thinking?

No, it's going properly. They were just waiting for our Dubai office to be started because there were some gold prices differences between India and Malaysia.

Dubai prices are same, India prices are much better higher, $10, $15 that is in the import duty also. That's why they were waiting for 25, 30 days.

We took some time because Dubai has a very strict norms to open the office, and we took 3 to 4 months. We were expecting 2 months, it took 4 months to open.

Now from November, you can see the average of the Malaysian customer which was 30 kg or 35 kg in two months, it will go up to 40 kg per month in this quarter because they were also waiting that we can avail the goods from Dubai office, that will benefit them. The Dubai office was opened in October month, but it was fully functional by 7th, 8th October, we kept the official opening also.

I think we'll be by March, we'll be at I think 50, 60 or 70 kg per month, let's see. Now the office has opened and it's very easily we'll operate and it will be easy for them also to take the deliveries and all.

Understood, sir. Fine.

Sir, just on this thing from Dubai opportunity, what kind of say market size does this particular market has? I know that you can move from Dubai to other areas also.

In terms of just opportunity size, what can be our opportunity size from this particular market in terms of the overall market, and how much we can reach in say suppose say 3, 5 years kind of time period? In

for UAE market per se, we are very optimistic. We have identified UAE as a strategic growth market.

Our export target of reaching to 15% to 20% was based off on our presence in this segment. Now our strategy is to be closer to the customers per se, and we expect that we are on track to reach 15% to 20% of the sales per se by end of 2027.

Again, I will add that we will serve Singapore, Malaysian client also from UAE office. We can serve all the UAE country and again Singapore, Malaysia.

Our sales head and team has already started promoting our sales, and we kept a event in UAE on 9th of November. We sponsored a jewellery award, and we distributed award to all the major clients.

We sponsored that, and 7th, 8th was the opening of the. We expect to be 20% by 2027 March.

Understood, sir. In a way what you are saying that there can be an export opportunity of about 1500 crores as by '27, and out of that because you are opening this new facility, so that might contribute 50% to 70% of increment.

Whatever the export we do, right?

Yeah. So 15% to 20% we expect by '27 March.

When new facility will be open in 2028, we'll analyze how we have reached, how the market is going, and we'll give the guidance after opening the new facility what the export will play much in 2028, '29, '30. Again, this will be a play a key role in our vision and our dreams to achieve 4.5 ton in 2031, '32.

Okay. Thank you, sir.

Thank you. The next question comes from the line of Nilesh Jain from Asit C.

Mehta Investment Interrmediates Ltd. Please go ahead.

Hi. Thank you for the opportunity and, firstly, congratulations on a great quarter.

I have only one question. Can you help me understand why is there an increase in capital work-in-progress for almost 100 110 crores?

Is it for the land for the new plant facility, or what is it?

Yes, this is for the new project. As of March '27, this balance was parked in other assets per se because we have just given the advance while the final sale agreement was not executed.

The sale agreement got executed in the H1 of 2026, and that's why the amount is showing in capital work-in-progress.

Okay. Sure.

Thank you so much, and I wish you all the best.

Thank you, sir.

Thank you. The next question comes from the line of Sajal Agarwal from Clearview Equity.

Please go ahead.

Yes. Sir, I have a couple of questions.

The first one is regarding the EPS. As per the latest earning release, your Q2 '25 EPS was 3.37 on standalone basis, which has only increased by 6% to 3.59 in this quarter, while the PAT has increased by almost 53% over the same period.

We know that you have diluted some equity around 10% to 15%, but this is a huge difference. Can you explain the reason behind this?

EPS is based on the total shares outstanding per se. For the Q2, we have done the weighted average of the total number of shares which was outstanding.

That is why you are seeing this EPS to grow only from 3.37 to 3.59 because of the increase in the base of equity shares.

Sir, is the increase is at this quantum? Because from my understanding, you have diluted around 10% to 15% of equity over the last one year, right?

It is based on the number of shares outstanding and the total number of days it was outstanding. This is a weighted average per se.

You are asking from Q1 '26 to Q2 '26, or which period? Last year

last year Q2 '25 to this year Q2 '26.

Q2 '25 to Q2 '26. That impact was on account of the weighted average and, secondly, also on account of the bonus shares which was approved in Q2 FY25 per se.

The impact of the bonus shares have also came. That is why there is a.

Sir. Sir, my next question is, so as in the last earning call, we discussed that our margins and revenue dependent on both volume and price of gold.

I just want to understand, what if the gold prices fall by say 20%, 25% in the next two years? How it will impact our margins profile over the next two years?

In case we say that the gold prices fall from Rs 1 lakh to 80,000 over the next two years?

You can see our margins are on percentage basis. You are telling perfectly, but gold is a appreciating asset from last 15, 20 years.

We see 10% to 12% appreciation is there. Whenever it is a fall come, gold falls by 5% to 10%.

This does not change our margin. When gold falls by 25% or 20%, we revise the quotation with the customers for 6 months or 12 months whenever gold comes to the normal price, then we revise the quotation.

In COVID only gold came down by 15% or 10% I think. In normal stage, you can see gold is a appreciating asset.

If gold falls by 20%, 25%, we revise our quotation with the customers, and customers also know that when the gold price comes down, the quotation will be revised.

Okay. In the near term, you say one or two quarters, will it impact our margin in that case?

Not, because gold is again it is from 1 lakh to 1,20,000, 25,000, 30,000, roaming around 120 to 30,000. The 5% to 10% we and customer know that there is no change in the quotation and all, and margin also not change.

Okay. Thanks a lot, sir.

That's it from my end.

Thank you. A reminder to all the participants that you may press star and one to ask a question.

The next question comes from the line of Raj Saraf from Finvestor. Please go ahead.

Congratulations on brilliant sets of numbers. Sir, I have a question regarding the guidance, though you refrained from giving it.

Mathematically calculate, our guidance of 5400 and 7600 crores for FY26 and '27 is given for the gold price is 90 to 95,000. Right now the gold price is above 1,20,000.

If I calculate the revenue even at 650 kg volume, which we intend to achieve by this financial year, and by subtracting 10% of advance gold business, which we might be intending to do by this end year, the revenue easily can cross 8000 crore. Even at the current run rate of 544 crore per month, we are even overachieving this year's guidance.

How to look at the whole scenario, sir?

You can see we have taken the 90, 95,000 of 22 carat. Gold you are telling 1,20,000, 25,000 is a pure rate.

So 22 carat it will come to 1 lakh or something. There is a gap of 10%.

I agree that gold has gone up, but caratage are also changing. We are on 9 carat also, 18 carat percentage is also going up.

We have conservatively taken 90, 95,000. Again, if gold goes in this moment and remain at higher level, I agree that the revenue amount will change.

Again, some caratage are changing, 18% is gaining the share. That's why we have taken the conservative number of 7600 crore.

If gold does not go down and keeps on moving or on this rate, 100% there will be change in revenue.

Sir, right now we are having capacity of standalone, I think 750, and subsidiaries Star and Sparkling? Speed and Sparkling and

1.2, 1.2 ton per month we have the capacity.

Including Ganna Gold, sir?

That renamed as Speed Bangle. Including the three subsidiaries, we have 1.2 ton capacity which can be utilized till 2028.

Yeah.

Okay. Sir, the gold prices has actually exceeded, I think, beyond everyone's expectation.

How confident is the management to reach the run rate of 900 kg by FY27?

100% we'll reach because as we were also expecting that gold prices are going up, and second quarter we were also seeing that how the customer behave. Customer buying was very aggressive because of the gold prices going up.

Earlier you can see when our parents were there 10 years back, when gold rate used to go up, there used to be a slowdown of footfall by 25%, 30% because earlier parents used to say that gold price is high, we can buy after 6 months or 10 months. Nowadays there is a data available with every youngster, apps are available.

Everybody knows that gold is a appreciating asset. Customers, when they have a money in the pocket, they want to buy at that time only.

Buying was very aggressive at the Diwali time, in the customer level also, before Diwali also, because everybody is in that mindset that gold is going to appreciate for up here from 3 to 4 years or 5 years because of the central bank buying and ETF has also entered into market aggressively. Customer faith level has gone up very much higher because 6 years back customer buy the jewellery for Rs 1 lakh, now he's getting Rs 4 lakhs after cutting the making charges.

In 6 years 4x or 3x returns has given by the gold to the retail consumers, mostly to the ladies who are buying. They are very confident and faith level has gone up.

We are seeing very huge demand in volume also and revenue also. We are very confident we'll reach 900 kg.

Sir, Ganna Gold capacity or our business is entirely of advance gold biz?

Totally advance gold.

Okay. Right now we

are,

yeah. Right now, sir, we are doing 6% of advance gold biz.

Am I right, sir, if I perceive

this?

Yeah. Going forward, if you are guiding that 50 crore 50 kg per month is going to come from Ganna Gold and the same run rate will continue or even go further, so that means 10% of our volumes are coming from Ganna Gold and the 60 6% is already we are doing advance biz.

Can I perceive that more than 15% is going to be our advance gold biz by this end year?

We are giving conservative 10% to 12% because 50 kg we are sure from Speed Bangle. Again, how the volume come in next quarter, we can calculate the percentage.

Again, you can assume 10% to 12% 100%.

Sir. Congratulations once again, sir, and very much happy to see you even increasing our volumes on standalone basis also.

That's what we are actually looking for. Thank you very much, sir.

Congratulations for this numbers and even wishing you best for the future endeavors and even on your export and all acquisitions further. Thank you.

Thank you, sir. Thank you so much.

Thank you. Ladies and gentlemen, in the interest of time, that was the last question for today.

I would now like to hand the conference over to management for closing comments.

Thank you so much to our shareholders for supporting us every time. We management assure you the performance we are giving from last 2, 3 years and going ahead.

Hope you are with us for a longer time. Thanks so much.

Thank you. On behalf of Sky Gold and Diamonds Limited, that concludes this conference.

Thank you for joining us, and you may now disconnect your lines.