Omara FY26 profit more than tripled as inventory lifted margin

Omara’s profit after tax, or PAT, more than tripled to Rs 9.37 crore in FY 2025-26 from Rs 2.73 crore in FY 2024-25 as revenue nearly doubled. The reported 20.42% PAT margin was supported by a Rs 18.99 crore credit from a rise in finished-goods and stock-in-trade inventory, alongside lower overhead ratios.

Why did Omara’s FY26 profit and margin rise?

Omara’s FY26 profit rose because revenue from operations increased 95.00% to Rs 45.87 crore while the cost base grew more slowly after the inventory adjustment. Profit before tax, or PBT, rose to Rs 12.74 crore in FY 2025-26 from Rs 3.67 crore in FY 2024-25, and PAT increased 342.85% to Rs 9.37 crore from Rs 2.73 crore. The PAT margin consequently increased by 8.81 percentage points to 20.42% from 11.61%.

Omara attributed the Rs 22.35 crore increase in revenue to higher sales volumes, wider market reach, ready availability of high-demand inventory and a greater sales mix of diamond jewellery. During FY 2025-26, Omara introduced designs across neckwear, rings, earrings, bangles, bracelets and chains, and said its exclusive boutique benefited from merchandising, stock rotation and promotional activity. Other income was nil in FY 2025-26, so revenue from operations accounted for all of total income of Rs 45.87 crore.

The FY 2025-26 outcome followed a different pattern from FY 2024-25. Revenue increased only 1.43% to Rs 23.52 crore in FY 2024-25 from Rs 23.19 crore in FY 2023-24, while PAT rose to Rs 2.73 crore from Rs 31.11 lakh. Omara attributed the earlier improvement principally to lower purchases, sales of opening stock, higher diamond-jewellery sales and lower finance cost; FY 2025-26 instead combined rapid sales growth with a much larger inventory build.

How did Omara’s FY26 inventory accounting lift margin?

Omara’s inventory build lifted FY26 reported margin because a rise in closing inventory is shown as a credit under changes in inventories in the statement of profit and loss. The line was a negative Rs 18.99 crore in FY 2025-26, compared with a negative Rs 1.10 crore in FY 2024-25. The negative presentation means closing inventory exceeded opening inventory, reducing the expenses charged in the period by the stock increase.

Purchases of stock-in-trade increased 189.82% to Rs 46.70 crore in FY 2025-26 from Rs 16.11 crore in FY 2024-25, exceeding revenue from operations of Rs 45.87 crore. Omara said purchases covered jewellery made by contracted vendors to its designs, along with 24-carat gold, silver and other jewellery components. The Rs 18.99 crore inventory credit partly offset the purchase charge because stock remained on the balance sheet at March 31, 2026 rather than being fully recognised in FY 2025-26 expenses.

Closing inventories rose 77.19% to Rs 43.58 crore at March 31, 2026 from Rs 24.60 crore a year earlier. Omara attributed the increase to additions of ready-stock collections and designs, and to higher commodity spot rates. Management said the inventory was expected to be liquidated in the ordinary course within a reasonable timeframe, meaning the reported margin depends in part on future sales of that inventory amid commodity-price movements and customer demand.

Which costs changed as Omara’s revenue increased?

Omara’s total expenses increased in rupee terms but declined relative to income in FY 2025-26. Total expenses rose to Rs 33.13 crore from Rs 19.85 crore, yet fell to 72.23% of total income from 84.39%. That 12.16-percentage-point reduction in the expense ratio corresponded with PBT margin increasing to 27.77% from 15.61%.

Employee benefits expense rose 15.13% to Rs 1.03 crore in FY 2025-26 from Rs 89.63 lakh, but declined to 2.25% of total income from 3.81%. Omara linked the absolute increase to a larger sales and operations workforce, annual salary revisions and gratuity provisions. Finance cost rose to Rs 1.49 crore from Rs 1.00 crore, reflecting increased use of working-capital facilities and unsecured loans from non-banking financial companies, or NBFCs, to support inventory.

Other expenses fell to Rs 2.52 crore in FY 2025-26 from Rs 2.71 crore in FY 2024-25, decreasing to 5.50% of total income from 11.53%. Advertising, sales-promotion and marketing expense declined to Rs 1.37 crore from Rs 1.52 crore, which Omara attributed to the benefit of aggressive marketing undertaken in FY 2024-25. Higher boutique rent, audit fees and miscellaneous expenses partly offset that reduction, while depreciation and amortisation increased to Rs 37.07 lakh from Rs 23.22 lakh after investments in vehicles, furniture and fixtures.

How was Omara’s inventory build funded and what remains exposed?

Omara funded higher working-capital needs partly through borrowings, while its operating cash flow was negative in FY 2025-26. Net cash used in operating activities was Rs 6.70 crore, compared with Rs 83.62 lakh used in FY 2024-25. Omara attributed the FY 2025-26 outflow primarily to the Rs 18.99 crore inventory increase and higher loans, advances and other assets, partly offset by lower trade receivables and higher short-term provisions.

Short-term borrowings increased 64.95% to Rs 18.49 crore at March 31, 2026 from Rs 11.48 crore, while long-term borrowings rose 58.97% to Rs 3.94 crore from Rs 2.48 crore. Net financing cash inflow was Rs 6.98 crore in FY 2025-26, mainly from increased borrowings for working capital, after interest paid of Rs 1.49 crore. Trade receivables declined 88.43% to Rs 16.97 lakh from Rs 1.47 crore as Omara said customers settled more promptly amid gold-price volatility.

Omara also had customer concentration in FY 2025-26, with its largest customer accounting for Rs 7.49 crore, or 16.33%, of revenue from operations. Its 10 largest customers generated Rs 12.53 crore, or 27.32%, of revenue, compared with 21.41% in FY 2024-25. The company identifies consumer spending, gold and diamond price volatility, supply-chain continuity, design preferences and inventory management as factors that can affect sales, procurement costs and margins.

Conclusion

Omara’s FY 2025-26 profitability reflected both commercial growth and the accounting effect of stock accumulation. Revenue rose 95.00% to Rs 45.87 crore, while lower employee and other-expense ratios and the Rs 18.99 crore inventory credit reduced total expenses to 72.23% of income and lifted PAT margin to 20.42%.

The disclosed point to watch is whether Omara liquidates Rs 43.58 crore of inventory held at March 31, 2026 in the ordinary course, as management expects, while managing the Rs 6.70 crore operating cash outflow and higher borrowings. Omara’s board stated that, since March 31, 2026, no circumstance had arisen that materially or adversely affected, or was likely to affect, profitability, asset value or its ability to pay material liabilities within the next 12 months.