Gujarat-based RBZ Jewellers reports a 60% rise in first-quarter revenue for FY27 driven by strong demand and aggressive store rollout plans, even as profitability margins face pressure amid rising costs and inventory strategies.
RBZ Jewellers reported a sharp rise in first-quarter revenue for FY27, underlining continued demand for its jewellery as the Gujarat-based retailer and wholesaler pushed deeper into expansion mode. According to GuruFocus’ summary of the earnings call, revenue from operations climbed 60% year on year to ₹121 crores, with retail sales jumping 70% to ₹78 crores and wholesale revenue rising 47% to ₹42 crores. Management linked the improvement to stronger consumer demand, better brand pull and firmer order bookings from corporate clients.
The company’s growth, however, came with some pressure on profitability. EBITDA margin eased to 14.9% from 16.5% a year earlier, as stagnant gold prices limited inventory gains and costs rose ahead of new store openings. Profit after tax margin also slipped to 7.5% from 9.2%, reflecting higher finance costs, lease liabilities and employee expenses tied to hiring and training for the next phase of expansion, according to the earnings call analysis by Arthneeti.
RBZ is pressing ahead with a broader store rollout in Gujarat, with plans to open four outlets in Surat, Rajkot, Maninagar and Gandhinagar during FY27. Rajendrakumar Zaveri, chairman and managing director, said on the call that Surat is slated for the second quarter, while the other three locations should follow in the third quarter. He said large-format stores can require inventory deployment of ₹125 crores to ₹150 crores, while mid-sized stores need around ₹50 crores, and he expects capital spending to break even within a year or less. Arthneeti noted that management has not offered detailed store-level revenue guidance, citing competitive sensitivity.
The company is also moving towards a gold metal loan strategy to hedge inventory and reduce financing costs. Zaveri said the group has sanctioned debt of about ₹300 crores and is working towards a debt-to-equity ratio below 1:1 by the end of the fiscal year, with gold metal loans carrying a much lower interest cost than conventional borrowing. He also said the company intends to hedge inventory over time, targeting 50% coverage next year and 75% in the third year. That shift comes as capacity use remains only about 50%, or roughly 900 kg to 1,000 kg of annual output from a facility capable of 1.8 tonnes to 2 tonnes, according to the call summary.
Demand trends in the first quarter appeared supportive, with the company describing the response at the India International Jewellery Show as warm and saying its July and August order book is full. Zaveri also pointed to an evolving product mix, with 18-carat jewellery now accounting for around 18% to 20% of revenue, alongside the company’s continuing focus on occasion wear and antique gold pieces. StockAnalysis data shows RBZ trades on a price-to-earnings ratio of 9.1, while LiveMint’s quarterly snapshot indicated softer sequential numbers, highlighting the volatility that can come with a business heavily exposed to gold prices, inventory cycles and store rollouts.
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