PNG Jewellers FY26: Crossing INR 10,000 Crore Revenue, While Q4 Margins Show the Cost of Mix

P N Gadgil Jewellers Limited ended FY26 with a milestone it openly celebrated on its earnings call: consolidated revenue from operations of INR 10,739.1 crore, up 39.6% year on year. Profitability improved sharply at the full-year level as well, with gross profit rising 83.3% to INR 1,302.2 crore, EBITDA up 89.6% to INR 704.0 crore, and PAT up 87.8% to INR 409.8 crore.

Q4 FY26 played a big role in pushing the company over the line. Revenue from operations rose 123.2% year on year to INR 3,544.3 crore. But the quarter also highlighted the key near-term debate for investors: profitability can swing meaningfully when the sales mix shifts towards low-margin bullion and when promotional intensity rises.

FY26 performance: growth plus margin expansion

The year’s financial profile shows a company still in aggressive expansion mode, but also improving its operating leverage. Consolidated gross margin expanded to 12.0% in FY26 versus 9.2% in FY25. EBITDA margin improved to 6.6% from 4.8%. PAT margin moved up to 3.8% from 2.8%.

Operationally, the investor presentation highlights an expanding retail footprint and improving scale metrics. As of March 31, 2026, the company operated 78 stores across 36 cities, with 57 COCO and 21 FOCO stores. Same-store sales growth for FY26 was stated at 42.8%. Average transaction value for FY26 was about INR 1.0 lakh, and average revenue per store was stated at INR 137.7 crore.

Segment mix: retail leads, digital scales, franchises add reach

The investor presentation provides segmental revenue for FY26. Retail remained the largest contributor at INR 8,130.7 crore, up 50.5% year on year. E-commerce revenue doubled to INR 529.1 crore, up 105.2%, reflecting the company’s marketplace and D2C focus. Franchisee revenue grew 83.0% to INR 1,291.7 crore, underlining the increasing role of an asset-light model. The Other segment declined 40.7% to INR 787.7 crore.

From a channel and brand-format perspective, the presentation also discloses revenue contribution by the two principal retail concepts. PNG Jewellers legacy stores (65 stores) contributed INR 9,351.5 crore in FY26, while LiteStyle by PNG (13 full format stores plus shop-in-shops) contributed INR 70.8 crore.

The mix is important because the company is trying to build a multi-format growth engine. Legacy stores are positioned around wedding and traditional jewellery, while LiteStyle is aimed at younger buyers with lighter-carat products. LiteStyle’s stud ratio is reported at 31.2%, far above the legacy store stud ratio of 9.9%. However, management clarified on the call that LiteStyle is still a small business in FY26 and does not materially drive overall studded mix movements yet.

Q4 FY26: strong demand, but margin volatility exposed

Q4 FY26 was a high-growth quarter. Retail segment revenue rose 101.5% year on year to INR 2,606.3 crore. Franchisee revenue grew 132.0% to INR 429.8 crore. E-commerce grew 67.3% to INR 151.7 crore. The Other segment rose sharply in the quarter.

But consolidated gross margin for Q4 FY26 fell to 9.7%, down 230 bps year on year, while EBITDA margin fell to 4.7% from 6.9%. Management provided a detailed explanation in the concall.

First, the sales mix shifted heavily towards gold bars and coins, which carry structurally thin spreads. Management stated that the share of gold bars and coins rose from 28% of revenue in Q4 FY25 to 40% in Q4 FY26, with value rising from about INR 450 crore to about INR 1,400 crore. The CFO quantified bullion margins at only 0.5% to 1%, versus about 12.5% to 13% for non-studded gold jewellery.

Second, the studded mix dipped by about 1% in Q4, attributed to promotional campaigns including Foundation Day and Gratitude Day offers where the company discounted making charges on gold.

Third, management stated marketing promotion and trade discounts were in excess of INR 50 crore in the quarter, which also impacted margins.

A further contributor to quarter-on-quarter margin moderation was the increase in franchisee sales. Management said franchise gross margins are in the range of 2.5% to 3%, and the higher franchise share in the quarter dragged consolidated margins compared to Q3.

Capital intensity and cash flow: the other side of rapid expansion

The balance sheet reflects a business funding store growth and inventory build. Consolidated inventories increased to INR 3,655.4 crore at March 2026 from INR 2,020.9 crore at March 2025. Current borrowings rose to INR 1,569.2 crore from INR 815.0 crore.

Cash flow data shows the pressure that working capital can create in a fast-growing jewellery retailer. Consolidated cash flow from operating activities was negative at INR -716.9 crore in FY26, driven by a working capital outflow of INR -1,241.2 crore.

Inventory turnover also declined to 3.8x in FY26 from 5.2x in FY25. Management attributed this mainly to new store openings, particularly those in Q4, and to the increase in gold value.

FY27 guidance and the levers management is betting on

Management guided FY27 revenue of INR 13,500 crore, with EBITDA margin of 7% to 7.5% and PAT margin of 4%. It also indicated that guidance could be revisited depending on how market conditions evolve.

A key operational lever for reducing earnings volatility is higher hedging. Management stated hedging coverage was around 67% as of Q4 FY26, averaging around 60% in FY26, and it intends to move towards 75% to 80% in FY27.

Another lever is mix correction. Management expects the unusually high bars and coins share seen in Q4 to normalize. It also expects old gold exchange to rise from around 40% of business to 50% plus. The company described its Swarna Swaraj program to encourage customers to convert old gold into new jewellery. If this shift plays out, it could support making-charge led margins.

The expansion plan remains aggressive, but with a tilt towards FOCO. Management discussed an FY27 store addition plan of about 25 stores, with about 5 to 7 COCO stores and the balance FOCO, alongside entry into new regions including Gujarat and Gurgaon.

Takeaways

FY26 shows PNG Jewellers combining rapid store rollout with improving full-year profitability. The main risk highlighted by Q4 is that margins can compress quickly when bullion demand spikes or promotions intensify. Management’s FY27 plan relies on three measurable levers: normalization of bullion mix, higher hedging coverage, and asset-light expansion through FOCO while strengthening new geographies outside Maharashtra.

If the company executes these levers while maintaining demand traction and store ramp-ups, FY27 will be less about proving growth and more about proving the stability of margins and cash generation behind that growth.