Goldiam International (526729) Q2 23/24 earnings summary

Executive summary

• Q2 FY24 revenue rose 50% YoY to ₹1,392.8 mn and 15% QoQ; EBITDA increased 10% YoY and PAT rose 25%.

• H1 FY24 revenue grew 11% to ₹2,604.6 mn; EBITDA declined to ₹570.5 mn while PAT increased to ₹407.5 mn.

• Lab-grown jewellery rose to 34% of Q2 revenue from 19% a year earlier, alongside growth in online sales.

• Revenue growth came amid estimated 3%-5% U.S. industry contraction; design execution and lab-grown gains supported market-share growth.

Financial highlights

• Q2 total income was ₹1,392.8 mn versus ₹927.1 mn YoY; EBITDA was ₹332.4 mn versus ₹301.6 mn and PAT ₹234.5 mn versus ₹187.8 mn.

• H1 total income was ₹2,604.6 mn versus ₹2,338.0 mn; EBITDA was ₹570.5 mn versus ₹621.9 mn and PAT ₹407.5 mn versus ₹401.3 mn.

• Q2 gross margin was 36.8% versus 52.0% YoY; EBITDA margin was 23.9% versus 32.5% YoY, up 422 bps QoQ.

• H1 gross margin was 34.9% versus 41.9%; EBITDA margin was 21.9% versus 26.6%.

• H1 included ₹10 crore-₹12 crore of inventory realignment after lab-grown diamond price declines, primarily affecting margins.

Outlook and guidance

• Management cited a 20%-25% EBITDA margin range for the overall business and hoped lab-grown sales would continue growing at double-digit rates.

• Order book was ₹1,650 mn at September 30, 2023; results materials indicated four to six months for execution, while Q&A cited three to four months for recurring retailer orders.

• Q2 and Q3 are typically the strongest quarters; festive demand was expected to support sales, with no capacity constraints cited for higher jewellery production.

• Expansion efforts include the Middle East, Europe, Australia, the U.K. and India; a small-pilot India retail launch was expected to start in calendar 2024.

• Further inventory adjustments would be assessed after observing U.S. holiday-season trading.