RBZ Jewellers Ltd Q2 FY2026 Concall Summary

Key Takeaways

• Volume-led quarter, not revenue-led: Revenue grew 24% YoY but volumes rose 20% to 380 kg, as a structural shift to job work suppressed reported topline while protecting profitability.
• Job work now dominates the mix: 250 kg of 380 kg volume was job work (65.7% of sales), up from 54% in Q1, as corporate clients gave gold early to avoid price risk at ₹1,25,000 levels.
• Retail is the margin-and-scale bet: The single Ahmedabad store grew from ₹24 cr to ₹323 cr over five years, and management is now rolling out 4 new stores with the same systematized, no-bargain model.
• Gold price resilience is proven: Volumes held flat in H1 despite gold surging from ₹60,000 to ₹1,25,000, and management argues occasion jewellery faces delay, not denial, of demand.
• What to watch next quarter: Whether Q3 retail delivers the promised "good double-digit growth" after Q2's job work pull-forward, and whether the first new store opens on time in late Q4.

The Job Work Shift: Why Revenue Understates Performance

• Mechanic of the shift: Corporate clients, facing gold at ₹1,25,000, increasingly used gold metal loan facilities and gave metal to RBZ upfront for job work rather than buying finished goods outright. This removes gold cost from RBZ's topline while leaving manufacturing margins intact.
• Profitability is preserved, not diluted: Job work revenue (sale of services) is only part of the earnings picture. The major benefit comes from wastage recovery: efficient gold recovery during manufacturing adds directly to the bottom line via closing inventory, not the service revenue line.
• Volume is the honest metric: Management explicitly asked investors to track B2B volumes rather than revenue, because the wholesale-to-job-work preference shift is dynamic and can reverse. Wholesale plus job work combined is the meaningful metric.
• Margin pattern is now predictable: Margins rise when job work proportion is high (Q2) because job work carries higher margins; retail-dominated quarters (Q3) show lower margins; full-year margins are more consistent.
• H1 proof point: Revenue of ₹221 cr grew only 11% YoY, but EBITDA of ₹41 cr grew 47% YoY with margins expanding 455 bps to 18.62%, demonstrating the profit engine runs independent of topline optics.

Harit Zaveri: "Let us say if I am not doing 700 topline, but that let us say 10 kg of order which has come has not come on the sale basis. It has come on the job work basis. My profitability would still remain same, but my topline would shift."

Retail Expansion: The Scalability Thesis

• The pilot that worked: The Ahmedabad store grew from ₹24 cr in 2019 to ₹323 cr last year, operating on a systematized model with no bargaining and product-and-policy-driven sales. This track record is the foundation for expansion confidence.
• Store rollout plan: 4 stores in pipeline. Rajkot (Kalavad road) and Surat (Parle Point/Ghod Dod road) are finalized with lease deeds done, each at 10,000 sq ft minimum carpet area. Baroda is under location search. The fourth location is undecided, possibly another Ahmedabad store or North Gujarat.
• Timeline: One store in late Q4 FY26, one in Q1 FY27. Revenue from these two stores is already included in next year's forecasting, and marketing campaigns for the Surat store are "100% there."
• Format and funding: Stores are lease-preferred (Surat is half-purchased, half-leased; Rajkot fully leased). New store inventory will be funded through debt, internal accruals and stock optimization, with debt-to-equity maintained at 1:1 through working capital limits.
• Location discipline: Management is "very stringent about the location" and will not compromise to enter a market faster. Strategy follows consumer demographics and community preferences, not competitor locations.
• Competitive advantage in retail: RBZ can sell at a lower price than market while earning higher margins than peers because it is the original source manufacturer of the products it sells. Integrated manufacturing feeds retail margin.
• Medium-term ambition: Retail and wholesale volumes to reach roughly 50%-50% split, up from the current 30% retail, 70% B2B. Retail provides both margins and scalability.

Harit Zaveri: "I am 36 years old. My jewellery store is merely 11 years old. It was a pilot tested store. I can assure you, in 2019, we had a retail revenue of INR 24 crores and right now, last year we were at INR 323 crores. Nothing to do with family store. We have no bargain system. Things are systematized in the store."

Gold Price Dynamics: Resilience and Customer Behavior

• Volume held despite price surge: Q2 volume grew 20% YoY to 380 kg even as gold prices rose roughly 50% YoY. H1 volumes were flat, demonstrating that demand is robust beyond price gains.
• Customer behavior under price stress: Corporates shifted to job work to avoid price risk, giving gold early. In retail, management tested consumer price sensitivity by lifting making charges; after seeing hesitation, charges were re-adjusted and demand recovered.
• Correction vs confusion: Continuous gold price drops confuse customers and continuous increases also confuse them, causing purchase delays. But because RBZ operates in occasion jewellery, management argues "delay of demand can be there, denial will not be there."
• Book value protection: The company's gold book value is well-positioned to protect against downside if gold prices correct. Management is studying gold metal loan adoption (at ~3% interest vs 9% for cash credit) but has not adopted it yet because margin requirements for hedging at current prices are high and cash reserves are needed for seasonal demand.
• No inventory gain disclosed: When asked to quantify profit from gold price increases this quarter, management did not provide a figure.

Harit Zaveri: "Continuous drop of gold prices makes the customer confused and continuous increase of gold prices also makes the customer confused. They hold, but because we are in occasion jewelry, delay of demand can be there, denial will not be there."

Segment Performance and Mix

• Q3 outlook by segment: Job work will be muted in Q3 because demand was pulled forward to Q2 due to early Navratri. Retail is seeing strong 41-day momentum and Q3 "will dictate retail" for the full year.
• Full-year retail expectation: Management expects "good double-digit growth, plus double-digit growth" in retail this year compared to last year's ₹323 cr.
• Caratage trends: Occasion jewellery remains dominated by 22 carat. Daily wear segments are shifting to 18 carat or lower. RBZ is entering 18-carat occasion wear for the first time, building inventory and gauging market pulse.

B2B Engine: Exhibitions, Design and Customer Stickiness

• Exhibition-led penetration: RBZ participated in 5 national B2B exhibitions and 7 B2C exhibitions during the period. Continuous exhibitions, new design launches, and experimentation in different caratage help penetrate the market.
• Preferred manufacturer status: The company is one of few wholesalers or manufacturers able to demand gold in advance and get job work done, a sign of customer trust and manufacturing capability. Management states they are "preferred manufacturers, preferred suppliers for many of the corporate clients."
• Job work volume surge is capability-driven, not just price-driven: Job work volume increased from 163 kg last year to 250 kg this quarter. Management attributes this to manufacturing capability and design quality, not just gold price inflation.
• Digital marketing: Campaigns launched for festive daily wear collections (Chand, Rangat, Navratri Bridal, Akshay Tritiya) and daily wear lines (Humsafar, Rozana).

Guidance, Caution and the Unanswered

• Revenue and PAT guidance maintained, with a caveat: Management remains aligned with revenue guidance and is not revising the ₹45 cr bottom-line guidance, but wants to see how Q3 rolls out first. The environment is "quite dynamic" with price fluctuations and geopolitical tensions, so "a little bit of caution" is embedded.
• Several data requests went unanswered: Management did not provide bifurcation of corporate vs family volumes within the 380 kg, did not quantify inventory gain from gold price increases, did not give EBITDA margin bifurcation for retail, and declined to disclose inventory size for new stores citing competitive reasons.
• Store timeline specifics remain soft: While two stores are finalized, management did not confirm which store opens in Q4 or provide a specific opening date, and the fourth store location remains undecided with a "next quarter or so" timeline for finalization.

Harit Zaveri: "The environment is quite dynamic. Let us not revise it. Let us understand Quarter 3, how is it rolling out? It is pretty good, actually, in"

Guidance & Commitments

Key Metrics