RBZ Jewellers Q1 FY27: Retail-led growth, with a clear Gujarat expansion roadmap

RBZ Jewellers Limited reported a strong start to FY27, with Q1 FY27 revenue from operations at INR 120.8 crore, up 59.8% year-on-year. EBITDA stood at INR 18.0 crore, translating to a margin of about 14.9%. PAT came in at INR 9.1 crore, with a PAT margin of 7.5%. Management attributed the performance to robust demand, higher jewellery sales, and strengthening brand recall.

The quarter also reinforced the company’s strategic direction. RBZ continues to operate an integrated model spanning manufacturing, B2B (wholesale and job work), and B2C retail through its Harit Zaveri Jewellers brand. But the management commentary was clear that the next phase of scale is expected to come disproportionately from retail, with multiple new stores planned in Gujarat.

Q1 performance: strong growth, with costs rising ahead of expansion

On a consolidated basis, operational revenue increased to INR 120.8 crore from INR 75.6 crore in Q1 FY26. EBITDA grew to INR 17.9 crore from INR 13.0 crore. EBITDA margin declined year-on-year, which management explained as a combination of factors.

First, they indicated that the average gold rate remained largely stagnant, leading to negligible inventory gains in the system compared to periods when gold price movement can boost reported margins. Second, the company highlighted lease-related impacts, including amortization of lease assets and costs related to lease liabilities. Third, RBZ began incurring pre-opening expenses for the upcoming Surat store, including hiring and training, BTL activities, and front-loaded marketing and planning costs.

Even with these cost headwinds, profitability remained healthy. PAT increased 28.2% year-on-year to INR 9.1 crore. Finance cost rose to INR 4.2 crore in Q1 FY27 from INR 2.6 crore in Q1 FY26, aligning with management’s comments on higher stock planning and expansion readiness.

Segment mix: retail remains the growth engine

RBZ’s segmental numbers in the investor presentation show retail continuing to lead. In Q1 FY27, retail revenue was INR 77.5 crore, wholesale revenue was INR 42.1 crore, and job work revenue was INR 1.2 crore.

In the earnings call, management highlighted retail revenue growth of about 70% year-on-year and wholesale growth of about 47% year-on-year for the quarter. The company also reiterated that while B2B demand remains solid, the larger leap in growth is expected from retail as store count expands.

The integrated model is positioned as a competitive advantage. Manufacturing scale supports B2B and retail, retail supports brand positioning and consumer insights, and wholesale drives scale utilization. RBZ operates a 23,966 square foot manufacturing facility in Ahmedabad with casting, laser, and 3D printing capabilities.

Expansion plan: four stores in FY27, starting with Surat

The most concrete forward-looking disclosure in the call was the store rollout plan. Management stated that Surat is expected to launch in Q2 FY27, around the last week of September 2026, with timing aimed close to Navratri. Rajkot is targeted for early Q3 FY27. Maninagar (East Ahmedabad) and Gandhinagar are also planned for Q3 FY27, with management indicating that mid-format stores may open later in the season, potentially in November.

The investor presentation frames this as a Gujarat cluster strategy, backed by Gujarat’s strong consumption profile and income levels. The company is prioritizing Surat and Rajkot as large flagship stores, with Gandhinagar and Maninagar as mid-sized stores.

Management also provided useful store economics indicators. Large format stores are typically around 10,000 square feet carpet area, while mid-format stores are around 5,000 square feet. Inventory deployment is a major capital driver, estimated at INR 125 to 150 crore for large stores and around INR 50 crore for mid-format stores, with a 10% to 15% variance.

For Surat specifically, management disclosed capex incurred of approximately INR 10 crore and indicated a targeted breakeven of around one year, while refraining from providing explicit revenue forecasts until the store begins operations.

Gold Metal Loan and hedging: aiming to reduce volatility and cost of funds

Another strategic thread in the call was the planned shift towards Gold Metal Loan and increased hedging. Management said the company has started using GML in Q1 FY27 and intends to progressively move inventory towards being hedged, with an indicative transition period of about three years.

The stated objective is twofold. One is to reduce gold commodity volatility risk by hedging. The second is to reduce borrowing cost, as management referenced GML costs of around 3% to 3.5% compared to higher rates on regular borrowing. This is positioned as a lever to support higher leverage capacity as the retail network scales.

They also discussed leverage targets. Management said the company expects to remain below 1:1 debt-to-equity by the end of the year, and over time they would like to gear up to 1.5 to 2:1, with major leverage coming through GML.

Operating indicators: capacity utilization, exhibitions, and product mix

On the operations side, RBZ highlighted active market engagement. The company participated in five exhibitions and trade shows during Q1 FY27 across Saurashtra, North Gujarat, Ahmedabad and other locations. Management also noted a positive response at IIJS, stating buyer growth and good order momentum.

Capacity utilization remains an area of opportunity. Management stated annual capacity remains about 1.8 to 2 tons, while current production or consumption is around 900 to 1,000 kg, implying about 50% utilization on average. During peak season periods, they indicated utilization can move to 70% to 85%, sometimes near 90%.

The company is also responding to lighter-weight demand. Management stated that corporate sales were earlier 100% 22K and that they expect 18K to reach at least 20% of mix by the end of the year, driven by improved look-to-weight ratio demand.

Takeaways

RBZ Jewellers delivered strong Q1 FY27 growth and maintained healthy profitability while absorbing early costs linked to store expansion. The key near-term execution milestone is the launch of the Surat flagship store in late September, followed by Rajkot and two mid-format stores in Q3.

Management’s strategy is anchored in a Gujarat-first cluster approach, supported by the company’s integrated manufacturing base and growing brand investment in Harit Zaveri Jewellers. Alongside this, the planned shift toward Gold Metal Loans and increased hedging is intended to reduce gold volatility risk and lower the cost of funds, which becomes increasingly relevant as inventory and store rollouts scale.

The next few quarters are likely to test execution discipline and working capital management. But the disclosures in this cycle included specific store timelines, indicative investment parameters, and a clear articulation of the direction of travel from a B2B-heavy model to a retail-led scale-up.