AJC Jewel Manufacturers Q1 FY27 earnings call

What moved the numbers, as management explained it

• Volume-led growth: consolidated revenue rose 124.69% YoY from ₹45.12 cr to ₹101.38 cr on higher volume from existing customers and 12 newly onboarded independent retailers.
• Customer mix: top 10 customers contribute ~50% of revenue, with the remaining ~50% spread across ~200 customers; entry of more corporate clients extended credit periods.
• EBITDA margin expanded to 4.58% from 3.5% on product mix shift toward higher-margin categories (including 9 karat and 18 karat), plus manufacturing wastage and overhead control.
• Customised, lower making-charge positioning broadened the addressable retailer base and supported value addition.

The numbers management led with

• Capacity utilisation — India gold: ~25% in Q1 FY27 (approx. 1.2 kg per day)
• Theoretical revenue at 100% utilisation — India: ~Rs 7 crore per day
• Geographic concentration: 90-95% of revenue from Kerala
• Sharjah FZC CY2025 revenue: Rs 127.95 crore
• Sharjah acquisition consideration: Up to Rs 9.6 crore for 80% stake (entirely non-cash share swap)
• Promoter family remuneration vs PAT (FY26): ~10-15% of PAT

Guidance on this call

By business

Balance sheet, capex and funding

• No gold metal loan; no advance gold loan; no bullion trading — working capital is funded through other means.
• Cash flow from operations has been negative for the past six years; management aims to turn it positive in coming years.
• Reaching 100% capacity utilisation would require intensive working capital, funded through internal accruals, debt, and possibly equity in future.
• Esthara store capex ~₹4,000 per sq ft; first store opex ₹5-6 lakh/month; expected to mature within one year.
• UAE acquisition is a non-cash share swap valued up to ₹9.6 cr; expected 7-8% dilution for existing shareholders.

The industry, as management sees it

Management expects Q3 and Q4 of FY27 to be seasonally stronger than Q1 and Q2 due to festive and wedding demand; sees lower-caratage (9k and 18k) products as a structural margin-mix lever; views the historical cycle of government duty changes as not material to B2B manufacturing volumes.

Risks management named

• Customer concentration: top 10 customers contribute ~50% of revenue
• Geographic concentration: 90-95% of revenue from Kerala
• Geopolitical tensions cited as the reason the original 2025 Sharjah FZE announcement had to be re-initiated
• Negative operating cash flow for six consecutive years; intensive working capital needed for capacity scale-up
• Receivables growth (51% 3-yr CAGR) outpacing sales growth (16%) due to longer credit terms on corporate clients

Not answered directly

• Capacity utilisation trajectory for FY27 and FY28
• Cash flow from operations turning positive (no timeline)
• Sharjah full-year FY27 revenue contribution
• Promoter remuneration rationale (admitted 'no specific reason')
• FY27 PAT margin / EBITDA margin target

Asked for a number, answered without one

• Utilisation targets for FY27 and FY28: We have not given any guidance regarding this utilization now. So we have the guidance that we can do 450 crore this year.
• Sharjah full-year FY27 revenue contribution: That we will update you post H1 result.
• Quantum of working capital needed for 100% utilisation: We need capital gradually, not in a single time. Funding through internal accruals, debt, and maybe equity in future.
• Cash flow from operations turnaround timing: In the coming years we will try to get that positive; no exact time given.
• Esthara store count target over next 2-3 years: We will update you later, post H1 result.

Every question, with its answer

1. 1. Sharjah acquisition & margins

   Sahil, Unknown

   Question. What are the plans with the recent acquisition? Please elaborate. Separately, how are you going to increase margins?

   Answer, Mr. Ashraf P, Chairman & Managing Director. On acquisition: taking 80% stake in promoter entity AJC Jewel Manufacturers FZC, Sharjah — similar business to India entity; expected to complete in 3-6 months subject to BSE and regulatory approvals. The UAE entity reported Rs 127 crore revenue last year and Rs 72 crore up to June. On margins: Sharjah generates ~4% PAT margin in a tax-exempt free zone; aggregate post-acquisition PAT margin expected at ~4%.

2. 2. Capacity, utilisation, client mix, geography

   Meet, Unknown

   Question. What is capacity in India and the Middle East in kg terms, including silver? What is utilisation? Plans for new clients and geographies? Any gold metal loan / advance gold business? Concentration on any single client above 10-20%?

   Answer, Mr. Ashraf P, Chairman & Managing Director. Capacity: Sharjah 3 kg/day gold; India 5 kg/day for core casting jewellery and 8 kg/day for silver (used for internal Esthara consumption). Current utilisation: India ~25% (~1.2 kg/day); Sharjah ~800 g/day. Geography: 90-95% revenue from Kerala; marketing team in Chennai; expanding to other regions and using Sharjah for international orders. Clients: onboarded 12 independent retailers this quarter; no new corporate client beyond Kalyan; 50% of revenue from top 10 customers, balance from ~200 customers. No gold metal loans, no advance gold loan business currently.

   Follow-up. Are we concentrated on any client beyond 10-20%?

   Answer. No. 50% of revenue from top 10 customers; rest 50% from ~200 customers.

3. 3. Volume guidance, margin trajectory vs peers, hedging

   Rohit, Unknown

   Question. Is the 50% CAGR guidance volume or volume-plus-price? Can margins reach the 7-8% EBITDA range that peers like Skygold deliver? Do you hedge gold price risk?

   Answer, Mr. Ashraf P, Chairman & Managing Director. CAGR is volume-led — from existing customers, newly added customers and geographic expansion. On margin to peer levels: cannot commit to exact level but initiatives include product mix shift to high-margin categories, controlling manufacturing wastage and overheads. Hedging: facility in place with suppliers and on MCX; gold price fluctuation will not disrupt margins.

   Not answered directly.

4. 4. B2B digital platform & Esthara expansion

   Atharva, Unknown

   Question. Explain the B2B digital design platform — how does it work and what share of business comes through it? Plans for more Esthara stores?

   Answer, Mr. Ashraf P, Chairman & Managing Director. Platform has design library of ~2.5 lakh designs; customers can view, select, place orders, upload reference images, place customised orders; supports internal order, inventory, production and purchase planning. Esthara: 2 more stores under fit-out, opening by end of next month; positioned for Gen Z and design-conscious customers.

5. 5. Design capability & 2-3 year strategy

   Anshul Sharma, Unknown

   Question. How does the in-house design team (~20 members) and technology help differentiate? Plans to scale the team? What is the 2-3 year roadmap?

   Answer, Mr. Ashraf P, Chairman & Managing Director. Design team: 20 skilled members across manual and CAD; equipped with modern software including wax printer; team size will scale with volume. 2-3 year priorities: (1) continue to grow core gold jewellery manufacturing, (2) make Esthara a meaningful revenue and profit contributor, (3) expand to other Indian regions and international markets.

6. 6. Esthara unit economics & store rollout

   Saurabh Jain, Unknown

   Question. Esthara store count, capex per store, breakeven period, planned store count over 2-3 years and current silver capacity utilisation?

   Answer, Mr. Ashraf P, Chairman & Managing Director. 3 stores operational + 2 under fit-out (not 4). Per-store revenue target ~Rs 20 lakh per month, depending on store size and location. Silver capacity utilisation currently at ~1 kg/day. Store count for next 2-3 years to be updated post H1. Expected store-level maturity in ~1 year, depending on location.

   Not answered directly.

7. 7. Utilisation trajectory & full-capacity revenue

   Pradyumna Singhania, Unknown

   Question. Current utilisation, expected utilisation for FY27 and FY28, and revenue at full utilisation (India + Sharjah, ex-Esthara). Share swap dilution?

   Answer, Mr. Ashraf P, Chairman & Managing Director. At 100% utilisation: India can do ~Rs 7 crore per day; Sharjah ~Rs 3.6 crore per day. Specific utilisation trajectory to be updated later — no formal guidance yet. Revenue guidance: Rs 450 crore standalone India for FY27. Share swap dilution expected at ~7-8%.

   Not answered directly.

8. 8. Sharjah valuation, related-party history, working capital

   Aditya, Unknown

   Question. Sharjah PAT margin (assuming ~140 cr FY26)? EBITDA margin? Was the Rs 9.6 cr valuation light? Are the November 2025 FZE and current FZC acquisitions the same? Working capital: receivables growth of 51% (3-yr) vs 16% sales and 567% (5-yr) vs 37% sales — explain.

   Answer, Mr. Ashraf P, Chairman & Managing Director. Sharjah: ~4% PAT margin, ~5% EBITDA. Valuation determined per SEBI procedures by registered valuer. FZE and FZC are the same entity — original process could not be completed in 2025 due to geopolitical tensions and war; now re-initiated with name change from FZE to FZC (Free Zone Establishment vs Free Zone Company). Issued shares only — no promoter dilution; promoter holding to rise. On working capital: recent corporate client additions carry longer credit periods; the company will work to bring receivables down.

9. 9. Lower-caratage strategy, duty impact, demand outlook

   Agastya, Unknown

   Question. Plans and progress in 9k and 18k carat market? Impact on demand from potential government duty changes? Demand outlook for Q2 and Q3-Q4 given festive season?

   Answer, Mr. Ashraf P, Chairman & Managing Director. 9k just launched, 18k being supplied to some customers; portfolio remains predominantly 22k; higher margins in lower caratage driving mix shift. Duty changes historically have not affected business materially. Initial customer response to 9k/18k is encouraging. On Q2/Q3 outlook: Q1 and Q2 are moderate; Q3 and Q4 are seasonally stronger (festivals, weddings) but no specific demand number to share.

   Not answered directly.

10. 10. Revenue guidance & PAT margins

    Preet Shah, Unknown

    Question. Revenue and PAT margin guidance for FY27 and FY28? Consolidated figures, and Sharjah's expected contribution?

    Answer, Mr. Ashraf P, Chairman & Managing Director. FY27 standalone India target Rs 450 crore + 50% CAGR per year for next 3 years. PAT margin Q1 FY27 was 2.35% (analyst-cited 2.5%); further margin guidance to be updated later. Sharjah: Rs 72.46 crore in H1 CY2026 (Jan–Jun); full-year Sharjah figure to be updated post H1 result.

    Not answered directly.

11. 11. Cash flow, capacity, Esthara unit economics, promoter remuneration

    Gaurav, Unknown

    Question. Multiple questions: (1) CFO has been negative for six years — when will it turn positive? (2) Kerala plant at 25% utilisation — why expand to 120%? (3) Esthara Silvassa capex/opex per store and current revenue of first store? (4) FY26 guidance miss? (5) Bullion trading revenue in consolidated? (6) Promoter family remuneration at 10-15% of PAT while CFO negative — reason?

    Answer, Mr. Ashraf P, Chairman & Managing Director. CFO: no specific timeline; focus is on sales volume and growth. Kerala capacity: 120% was added now through IPO proceeds — installed is 5 kg India + 8 kg silver. Esthara: capex ~Rs 4,000 per sq ft depending on floor area; first store at Rs 15 lakh per month revenue; opex ~Rs 5-6 lakh per month. FY26: company had only just listed and had not given guidance. No bullion trading. Promoter remuneration: going forward will be aligned with PAT; no specific historical reason offered.

    Not answered directly.

12. 12. Guidance composition & Sharjah Q1 contribution

    Saurav Jain, Unknown

    Question. Is the 50% revenue growth guidance 35-40% volume + balance price? What is Sharjah's Q1 contribution in the Rs 100 crore revenue?

    Answer, Mr. Ashraf P, Chairman & Managing Director. No Sharjah consolidation in Q1 as acquisition is not yet complete; will consolidate from Q3 onwards. 50% guidance is volume-only; any further upside from gold price appreciation would be additional.

13. 13. Working capital funding for peak utilisation

    Pradyumna Singhania, Unknown

    Question. Do we need fresh money to touch 100% utilisation? Any debottlenecking required? Quantum?

    Answer, Mr. Ashraf P, Chairman & Managing Director. Yes, intensive working capital is needed for 100% utilisation; funding will come from internal accruals, debt and potentially equity in the future. Quantum: capital will be raised gradually, not in a single tranche.

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