Bluestone Jewellery and Lifestyle Ltd (NSE: BLUESTONE) Q1 2026 Earnings Call dated Sep. 05, 2025
Corporate Participants:
Gaurav Singh Kushwaha — Chairman and Managing Director
Rumit Dugar — Chief Financial Officer
Analysts:
Rhea Dharia — Analyst
Aravind Kodipaka — Analyst
Tejas Shah — Analyst
Aaditya Jain — Analyst
Gopal — Analyst
Arpit Shah — Analyst
Percy Panthaki — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the Bluestone Jewelry and Lifestyle Limited Q1 FY26 earnings conference call hosted by Ernst and Young. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions. After the presentation concludes, should you need assistance during the conference call, please signal an operator by pressing the star then zero on your Touchstone phone. Please note this conference is being recorded.I now hand the conference over to Ms. Raya Daria from EVA Investor Relations. Thank you. And over to you, ma’. Am.
Rhea Dharia — Analyst
Thank you, Steve. Good evening to all the participants on this call. Before we proceed on the call, let me remind you that the discussion may contain forward looking statements that may involve known or unknown risks, uncertainties and other factors. It must be viewed in conjunction with our business risks that could cause future result, performance or achievement to differ significantly from what is expressed or implied in such forward looking statements.
Please note that we have made the result and the same is available on the Exchange. In case you have not received the same, you can write to us and we will be happy to send the same over to you to take us through the results and answer your questions. Today we have the top management of Bluestone Jewellery and Lifestyle Limited represented by Mr. Gaurav Singh Pushwaha, Founder, Managing Director and Chief executive officer and Mr. Rumar Dugar, chief Financial Officer. We will start Paul with a brief overview of the quarter gone past and then conduct the Q and A session.
With that said, I will now hand over the call to Mr. Gautav. Over to you.
Gaurav Singh Kushwaha — Chairman and Managing Director
Thank you, Rhea. Good evening everyone. Thank you for joining us today. It is my pleasure to welcome you to Bluestone’s first earning conference call. As a publicly listed company, this marks a significant milestone for us as we are truly excited about the progress we have achieved so far. Before we begin, I would like to sincerely thank all our investors and shareholders who participate in our IPO and and place their trust in us. We deeply value this trust and are fully committed to creating long term value for all the stakeholders. I would like to extend a special thanks to our banking partners, legal advisors and all stakeholders who played a pivotal role in guiding us through this important journey. Last but not the least, I want to express my sincere gratitude to the entire team at Bluestone. Their unwavering commitment and hard work has been fundamental in shaping the company into what it is today.
Now, before we discuss the quarterly results, etc. This is the first time, this is our first earnings call after going public and this is the first time I’m speaking to a lot of you. So would like to also take this opportunity to quickly walk you through our journey over the last 13 to 14 years and tell you a bit more about myself personally. So I started Bluestone in 2011 with Feed Round or initial funding from Axle Partners and Axle Partners has been one of the strongest supporters throughout. Even before starting Bluestone I had another company. I started my first company in 2007 which was a social network and that was also funded by Axel Partners. Prior to that. I studied in IIT Delhi. I did computer science from there. I graduated in 2001 and worked programming jobs. Amazon was the last company I worked in. And from there I got interested in consumer Internet space and started two companies. One was social network and which I sold to Flipkart in 2010 and then moved out of it. And then I was thinking of doing or I was in process of figuring out what to do next. And having seen how Flipkart, Mintra and some of the early E commerce companies and other categories were progressing, I decided to do something in commerce. I could clearly see the opportunity there and hence I started evaluating a lot of categories. And while doing that evaluation, I realized that jewelry is an amazingly beautiful category. It’s a category built for the country. Every other category that I was looking at at that time India was Indian market was not that big in fact. So any category, if look at and if you compare the size of Indian market with US market in that category in India would be 1/10 or 1:15 the size of US market. Now when I looked at jewelry I realized this category is almost as big as it as its US counterpart. And more importantly it’s very ingrained in our society. So it’s very cultural to us. It’s very fundamental to us. Which was, which was some of the very good, some of the beautiful things about the category. I had no prior experience in the category. I never entered a jewelry store before starting it. But everything that I looked at, everything that I saw in the category, I found it very beautiful and decided to start in it. And at that time Axel, who had worked with me in my previous company also, they also decided to jump in and they wrote me a seat check of $4 million with which we started. I built an initial team through mostly my juniors from IIT and their juniors or their network through their network, through my network and so on. And we started addressing. We started with the belief and with the idea of building an online only jewelry brand. We were very clear that it’s not going to be a marketplace model. It’s going to be a direct to consumer model. In fact, the term D2C was not coined at that time. But everything that we the conclusion that we came to make the fundamental tenets of B2C now. So we realized that what we were going to sell on our website on bluestone.com were going to be our own products, our own designs and it was not going to be someone else’s designs in the beginning we started working with. So we created a set of 3, 400 designs, primarily rings, earrings, pendants, and decided to sell them. The first step was to. Was obviously to catalog them. And I think that was when we met our first big challenge. When we tried to photograph jewelry pieces. We realized that this category, the kind of products and the kind of nature of the products make them very difficult. Difficult for camera. It makes it impossible for camera to take beautiful photographs of jewelry pieces, mainly because they are reflecting surfaces, refracting surfaces, which gold reflects the light, diamond lets the light pass through, and so on. We looked around to see how others are handling it and we realized that no one was either serious about it or was capable of doing or solving it. So we were the first ones in the world to then use 3D rendering, 3D modeling to then depict jewelry beautifully. And that quite honestly changed the game for us. And then we transformed our entire catalog from photographs to 3D renders. The quality of the products, etc. Was very, very high. And people it was coming to think of it when we were in online only. When we were in online only avgad, we were in a way in the business of selling a photo. What people were getting in the end delivered was a physical product. But all the selling, all the decision making was happening on those photos. So it was very for those photographs to be extremely beautiful. And that we were able to achieve back in 2012. And then on next big observation was that as we’re expanding our catalog, we could not inventorize everything. We had limited capital available to us. So the only way we could offer a lot of choices and choices is one of the beauty of Internet. So the only way we could offer lots of choices was if we moved to just in time manufacturing model. Now we tried that with the existing supply chain, with the existing manufacturers of jewelry, but realized that that supply chain was not there for it. The manufacturing timelines were three to four weeks. The reliability of the end product was also not that high. There were lots of discrepancies between what was promised and what was manufactured. So we decided to bring manufacturing in house and in next one year or so, by end of 2013, early 2014, almost entire manufacturing was in house. And right after that, we were able to bring down manufacturing time three to five days. And the whole e commerce engine kind of started working. And with that, by around 2015, around 2016, we reached close to 50, 55 crore on pure online D2C revenues. And that was also the time when we were talking to a lot of our customers and we spoke to a lot of our buyers, asked them, what is it? Why did you buy it from Bluestone? And the number one reason is always designs. Almost 86% people said they bought because they loved the design so much. Number two was choices. Nine percent people said choices, 3% said price, 1% said convenience. Those also pointed us in the direction that this is truly a brand category. It’s not a services game like Flipkart or Amazon, where if you ask the same question, price inconvenience would be the number one, number two reasons that was not the case with us. And more importantly, what we’re also seeing was for every one person buying. There were 30 to 40 people who were just browsing the website, who were exhibiting exactly same behavior as buyers, spending as many weeks on the website, looking at as many products, adding as many products to their wish list and cart, but not buying. And we spoke to them, the non buyers and almost all the non buyers told us that we love the design. We love the fact that sitting at home we can browse, we can look at so many beautiful jewelry designs, which is just not possible in the offline setup. In offline setup, once you enter into a jewelry store, you are generally under pressure because it’s a counter driven experience. You’re generally asked if you like this particular piece, don’t like this piece, shallow shortlist and so on. So free browsing, which is the case in a lot of categories offline, also like apparel, shoes, you can just go to malls and browse for as many days, as many weeks as you want without anyone asking any questions. That free browsing is not present in case of jewelry in the offline setup. And that is where online was extremely powerful. Online was turning out to be extremely powerful. So almost all those online buyers said that we love the fact that we can actually look at 1,000 pieces of 1,000 designs of frame, which you can’t do in offline. But then they said how can we buy something so expensive without touching and feeling it. Number two reason was if something is, if something, if, let’s say I few years down the line, if there is some repair needed in that, if a ring size needs to be changed, if a diamond chips off, where would I go for the repair? In jewelry, typically the jeweler is also your service provider or repair provider. And number three or the third biggest reason was that if few years down the line I want to exchange this design for a newer design, how do I do that? And that is a behavior which is very common in our country and generally non existent in any other country. So I think that was our big realization that for all the efforts, for all the demand and all the pull that we are generating online, maybe because we are not able to solve these three problems, maybe we are not converting that into the real business, or we are not kind of efficiently converting that into the real business. And maybe if you could solve for these three problems, the business size is not whatever it was, maybe the two business sizes 30 to 40 times whatever that was. And with that learning with that hypothesis, we went out to open, we went out to open stores and the idea was clear that these three problems cannot be solved online. The natural solve for these is a store. A store very naturally solves for it. No amount of web pages, no amount of promises that you put on your webpage, we’re going to solve it. So we opened up First Mall in FY19, in Pacific Mall, Rajari Garden. And that year we opened five stores in total. And we saw the hypothesis playing out. We saw that in those catchments, in those catchments where we opened the store, we were able to. Convert that online demand into overall business for the company much more efficiently. And I think RSP also and in investor presentation also we have depicted one such scenario in the city of Ranchi when the online only Akar we were being close to 70 lakh in revenues, annual revenues which have now gone up to approximately 18 crore or so with the support of two stores. So that’s the kind of, that’s the kind of multiplier that Omnichannel presents has built on top of these existing strong online presence that we already had. And I think since then the journey has been of how fast can we can we layer these omnichannels? To us our online presence was always very strong pan India and in last four to five years or five to six years our endeavor has been layer more and more of this online presence with a strong Omnichannel presence. And that’s why and it is working out in every catchment, in every zone, in every region of the country. And that’s why we have very high confidence, very high conviction and that is the fundamental reason of very, very rapid rollout and a lot of efforts. All the efforts, all the efforts have already been there and getting people on the website, getting people to engage, getting people to love our designs, all that has been going on for almost 14 years now. The more we layer it to the Omnichannel, the stronger we keep on becoming and the stronger leverage we keep on getting on each of those efforts that we have been putting over last 14 years. So we ended FY25 at 275 stores. This quarter we opened a few more, I think 297, 292 stores. We ended this quarter with. And coming to our performance during the quarter overall we saw healthy revenue growth of around 41% y o y and that’s driven by very healthy sales for sale growth and the continued expansion of our omichannel footprint. Alongside this growth we delivered meaningful profitability improvements. Also with standalone adjusted EBITDA of 630% and margin expanding by 1358 basis points reflecting operating leverage across marketing, corporate costs and manufacturing efficiencies. I’m also pleased to report that through our consistent efforts and focus on profitability, we turned cash back positive at 17.5 crores versus the cash loss on a standalone basis of INR36 crore in the same quarter last year. These results underscore the profitable scalability of our business model and this balance of growth with improving profitability gives us confidence in delivering sustainable long term outcomes for our stakeholders. Now our Chief Financial Officer, Mr. Dumit Dudar will take you through the financials in detail.
Rumit Dugar — Chief Financial Officer
Thanks, Gaurav. Thank you all for joining us today. Good evening. I’m pleased to share our Q1 FY20. Financial performance. I’ll keep my remarks brief. We hope that all of you had the chance to go through our detailed financials and commentary. As you can see from a disclosure perspective, we are putting in our best efforts to make sure that there is as much transparency as we can bring in in terms of our disclosures and thus the detailed management commentary that you would have seen in our results back. Overall, our standalone revenue from operations for the quarter stood at 4. 9 to 6 million up 41% year on year versus 3, 482 million during the same quarter. Last year standalone adjusted EBITDA was at 830 million rupees up 630%. More importantly, standalone adjusted EBITDA margins came in at 16.8% up 1,358 basis points year on year. This was 3.3% in Q1 FY25. Also I would like to highlight as a best practice from a transparency perspective, we would be calling out inventory gain or loss this quarter. We had an inventory gain of 228 million during Q1 FY26. Excluding these inventory gains, our adjusted EBITDA was still pretty strong at 602 million with adjusted EBITDA margins of 12.2% up more than 400% year on year with nearly 895 basis point margin improvement on contribution margins again excluding inventory gains and contribution margin is our key operating margin metric which is a source of driving operating leverage in the business because below contribution margin we have a lot of fixed cost which is sitting there related to stores. So contribution margin excluding inventory gains stood at 31.8% an improvement of again more than 130 basis points y O Y this expansion was primarily driven by scaling of our new manufacturing facilities that opened in FY25 which are improving man capacity utilization as well as stabilizing and delivering process efficiencies. Our expense for rent was Rupees 368 million during the quarter we have seen significant significant reduction in our advertising and Marketing cost from 12.2% as a percentage of revenue in Q1 FY25 to 6.9% of revenue. This is driven by operating leverage that we are seeing coming from scale benefits, rising repeat customer revenue ratio as well as there was a step down in terms of the promotion scheme that we had on the old Gold exchange. As Gaurav mentioned. More importantly, we turned cash back positive for the quarter. Our same store sales growth was strong at 18%. For the quarter and we reported a healthy revenue repeat revenue ratio of 50.7% demonstrating the strength of our product portfolio, the stickiness of our customers and the scalability of our omnichannel model. Our performance during the quarter reinstates our faith in the business model. Our digital first approach continues to serve strong demand funnel for our stores while our expanding retail footprint is deepening customer access. This also allowed us to grow our customer base to more than 800,000. 816,000 to be precise. Importantly, we’ve also maintained strong unit economics and disciplined cost management which has, as demonstrated in this quarter, ensured that the top line growth translates effectively into operating profitability. With that, Steve, we can open the floor for questions. If anyone.
Questions and Answers:
Operator
Thank you, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your touchstone telephone. If you wish to withdraw yourself from the question queue, you may press star and 2. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.The first question comes from the line of Aravind Kodipaka with IME portfolio managers. Please go ahead.
Aravind Kodipaka
Hello. Hello.
Gaurav Singh Kushwaha
Hi, Arvind. Go ahead please.
Aravind Kodipaka
Hi, thanks for your opportunity and congratulations on good set numbers. I had a couple of questions on on the model itself. While I understand the omnichannel model and argument very well, is it possible for you to distinguish between a customer who walks in directly into offline and someone who is influenced online and then goes to stores?
Gaurav Singh Kushwaha
Yeah. So there are various ways of doing it. I think one of the obvious ones. So there are two major ways of doing it. One of the obvious ones is a lot of people, when they are browsing on the website, they also tend to. They also tend to register, especially repeat users. Yes. Yes. Okay. So when someone is registered, we already have the email and phone numbers. Okay. And when they make a purchase in our, in any of our stores, that phone number, email is mandatory. It’s the same system essentially. So the point of sale that we have in stores is nothing but the website. Okay.
Aravind Kodipaka
So yeah, no, I understood that. Yes.
Gaurav Singh Kushwaha
The moment someone does that, we can match that person to their browsing history. Let’s say few weeks prior to making that purchase. Every person who registered, we have tracking. There’s something called cookie based tracking. So we have that in detail on every person, whether the person is registered or not registered. Cookie based tracking goes all the way for six months or 12 months.
Aravind Kodipaka
No, I am familiar with this.
Gaurav Singh Kushwaha
So that is. Secondly, what happens is as we a lot of these users that we get, we get from Google, Facebook, etc. So what they also provide is there’s something called hashing. So once you anonymize your buyers phone numbers and email addresses and supply it to them, they also tell us that how many of those people have actually come to my website from these platforms.
Aravind Kodipaka
Sure. S
Gaurav Singh Kushwaha
So these are two ways with which you can actually match this and when we do this, matching that match is very, very.
Aravind Kodipaka
Yeah. So then what percentage of the sales can you actually attribute to someone who has browsed beforehand before getting into the store and someone who directly walked in without having say a one or two week history of browsing in that particular category. And can you get to that?
Gaurav Singh Kushwaha
Sure. Our ballpark says there is 70 to 90% comes from online browser.
Aravind Kodipaka
Okay. So 70 to 90% of the people who browse eventually come to the store.
Gaurav Singh Kushwaha
No, no, no. 70 to 90% of people who end up buying they had browsed the website prior to buying from the store.
Aravind Kodipaka
Okay. And the browsing window is what, like one week? One month. Three months.
Gaurav Singh Kushwaha
One month.
Aravind Kodipaka
One month. Is it possible for the company
Gaurav Singh Kushwaha
In general, again, the number of people who are browsing is in millions. Right. Every day obviously cannot be 70 to 90% of that. There’s a number of people who are buying. 70 to 90% of buyers work browsers on the website.
Aravind Kodipaka
Understood, understood. Yeah, yeah, I know. Right. Should have asked this way. Sure, sure. Is it possible for the company to disclose this metric on a constant in quarterly basis? Just so I understand how much of a dependence there is on the digital channel.
Gaurav Singh Kushwaha
There’s no plan to be good to do that right now.
Aravind Kodipaka
Okay, okay, okay, understood. The second question is regarding inventory on the balance sheet. Now I understand there’s been a rapid store expansion. In fact, the gone from 77 stores in FY22 to roughly 300 stores by quarter end this year. Here. But your expansion of inventory on balance sheet has also rapidly increased. In fact, if you just look at inventory per store, right? Or inventory days, whichever you look at, right. Let’s just say inventory per store went from 2 and a half crore of inventory per store to roughly 6 crores ish per store. I don’t understand what exactly drove this rapid expansion in inventory on the balance sheet.
Rumit Dugar
So Arvind, this is Romit, I’ll take that look before I actually get into the specific question, let me also kind of take a step back and give you some color on how we kind of operate, how we recognize revenue, etc. So you can contextualize our inventory versus some of the other peer sets etc.
So one is in terms of revenue recognition we recognize revenue only on a B2C or a retail sales basis. So even though we have some franchisee stores, we don’t recognize revenue when inventory moves from our balance sheet to let’s say a franchisee store, right? So, so we are a B2C sales revenue recognition. As a result, the balance sheet that you the inventory that you see is the full view of the retail channel that is number one.
Number two is again we are fully vertically integrated into manufacturing which reflects in our superior contribution margins etc. Versus the peer group. So, so there is also manufacturing inventory that is sitting on our balance sheet which you need to consider third factor now coming to the inventory. Large part of the inventory is gold and to the extent the inventory is hedged there will be obviously mark to market. So inventory growth is not necessarily a function of us adding more inventory but it’s just that if the gold prices keep going up which you have seen over the last two to three years, obviously it increases the inventory value. So that’s the third factor.
And the fourth one is obviously the amount of stores that we have opened. So if you look at our 292 stores that we have as of Q1 of this almost 83 opened in FY 2025. So nearly 200210 stores have opened actually in the last three years. Right? So if you are going to compare my inventory from FY22 to where we are or FY23 to where we are today, you have to factor in the gold price movement as well as the. Rollout of new stores. Also, the average age of our stores is as a result quite young. And thus if you look at our rhp, we’ve given the typical store performance. And even in this quarter’s management commentary we’ve disclosed the oldest cohorts what kind of revenue productivity they are delivering. So you can see that FY25 and 1920 cohorts were at 12 crore revenue productivity. So typically the the way to think about inventory turn is at a very fundamental level is look at the turn and on every turn how much gross margin I’m generating. So you could have one model where you do coin sales at 3% margin and do 10 inventory turns and you’ll have a 30% Jim Roy. And that is your fundamental source of ROC in the business. Right? Because 30% Gym Roy is the source of ROC and then it kind of translates after OPEX, etc. Into the company level ROC. Or you could operate at 1.82 turns with a 30, 35, 38% GM and then let’s say at a 38% GM you generate a 70% sort of Jim Roy, right? And that becomes your fundamental source of roc. So you can’t look at only inventory turn in isolation. It has to be viewed in context of gross margin. And the metric that we try to optimize is the gym Roy, because that’s our fundamental source of ROC in the business.
Aravind Kodipaka
Sure, I understood what you’re trying to explain, but just a very quick question. I understand the impact of gold prices on inventory and base moving up, right? But that would have also had an impact on your revenue, right? Gold prices would have also aided the revenue growth. So when I see an inventory,
Gaurav Singh Kushwaha
I’ll just cut you there. When you look at year end numbers and the way the gold moved from January to March, I don’t think sales would have time to catch up. In fact, especially if you’re looking at the annual sales, if you’re looking at if gold goes up 40% in one month, your sale will not increase by 40% but on the contrary, the sales when gold is volatile and it takes time, it takes time for that catch up to happen.
Aravind Kodipaka
No, I’m aware of
Gaurav Singh Kushwaha
Untarget territory, especially when it comes to the way gold is fluctuating.
Aravind Kodipaka
No, I am aware of this mechanism in jeweler. I am not referring to water. Now
Operator
Could you please come back in the queue for further questions?
Aravind Kodipaka
No, I. So can I just complete my question?
Operator
Oh yes, please, go ahead,
Aravind Kodipaka
Follow on please. Yeah, I’m aware of this mechanism in jewelrs. I’m looking at a longer time, I’m looking from FY22 to FY25. Right over this period you did see gold prices move up. I’m not saying one month gold price increase would have had an impact immediately on revenue. But I’m also what I’m trying to get to is even if I factor in the gold price impact, whether it’s on one year basis or three year basis on inventory and revenue, your inventory turn would have still gotten down from the roughly 2.8 times that you understand.
Gaurav Singh Kushwaha
So if you’re looking at very long term from FY22 to 25, it has less to do with let’s say gold price movement. And gold price movement actually only impacts it when you’re looking at year end inventory and full year sale, which maybe you are normalizing for the membership is the right thing for two to do when we are expanding at this rapid pace.
Now in our case a big reason for that also is the maturity and the growth of stores with the kind of SSSGs we are seeing. And if you look at those 200 stores which have been opened in less than two to three years, those are going to take time to fully show results on the inventory and the capital that is deployed in those stores. When I look at my mature stores, or not mature because even they are going very rapidly, but older stores, this number is much, much stronger. What you’re seeing is a blend of new and old stores and in fact, and that on top of that manufacturing inventory also. So you need to, once you start culling all those, a lot of those things out, the numbers are actually much better.
Operator
Thank you Mr. Arvin, I would request you to please come back in the queue for further questions.The next question comes from the line of Tejas Shah, an individual investor. Please go ahead.
Tejas Shah
Hi, this is Tejas from Aventus Park. Yeah, just wanted to understand what was the revenue per square feet for this quarter and typically how many quarters does a new store take to reach maturity? And you just spoke about that even mature stores are doing good number. So, so what is typically the number that revenue per square feet that mature store kind of stabilizes?
Rumit Dugar
Yeah, so Tejas, given our business model and our formats, really revenue per square feet is not a metric that we look at or we track. I think the best way to see it is revenue per store. So if I look at my older cohorts you know, the stores that opened in 1920, in FY25, on an average, they did a revenue of about 12 crores per annum. And the rental. For these stores would be in the range of, you know, 40, 45 lakhs per annum. So just that kind of gives you an idea that, you know, the rental cost as a percentage of overall revenue in this particular category and in our omnichannel business model, because our format sizes are 18002000 square feet, average revenue per square feet is not something that we track. So the focus metric for us is to drive the revenue per store. And given our contribution margins are pretty high, a lot of the operating leverage kind of keeps flowing in to the EBITDA at a store level.
Tejas Shah
Okay, and if you can just elaborate, if revenue per square feet doesn’t matter, then how does revenue per store matter? Because I can understand there’s an underlying commodity volatility perhaps. And we just wanted to understand because how do you measure the productivity of the store?
Rumit Dugar
So on a per store metric. Right. So revenue per store, rent per store, employee cost per store, facility cost per store. So the way we build the unit economics and you can look at, in the rsp, we’ve given the unit economics of our older cohorts. So typically an all in cost in our FY 1920 cohort is about 1 crore, which includes rent, facilities and store employee cost. So now if a 12 crore revenue productivity store at 3030 to 32% contribution margin, there’s about 3.2 crores of contribution with about 1 crore of opex which includes rent. So that delivers a 22% post rental store level EBITDA. So that’s the way we think about it. And these, these stores are still seeing ssh.
So it’s not that these are our oldest cohorts, but not to say they are matured. And thus there are a lot of categories where we are still not present in there is room to expand merchandise, there is room to build and get into more product categories subcategories which can then continue to drive growth even in these stores. And as you can see, if on an existing mature cohort or the older cohort stores at 12 crore, if there is a 15%, 20% kind of SSSG, that incremental revenue, the EBITDA margin for that is almost equal to contribution margin.
Tejas Shah
And mature stores are showing sssg, which is volume lit or because there’s a lot of pricing element also which plays a role here. Right.
Gaurav Singh Kushwaha
See, we generally are nonexistent in coins, chains and a lot of grammage based products. And typically in our case what happens is people come. With a budget of let’s say 50 to 70,000. Now that same person’s budget is not going to double if the gold has doubled. We are all mostly middle class. So essentially the product that they end up buying is different because one year back there was some other product in the budget. Now there’s some other product in their budget. So that is essentially what we largely see. Also historically there have been periods when gold was not moving that rapidly. Our ASPs have increased in those periods also. So if we go back two, three years and so on and not look at just the current ASP increase, you will see that those ASPs have generally been increasing.
Tejas Shah
Okay, and last one if I may. And since we are talking for the first time, just wanted to understand what are the top five KPIs you monitor to understand demand, environment and productivity of the stores.
Rumit Dugar
So Tejas, what we look at is one, the cohort level per store per month revenues. I think that is, that is one of the three key matrices that we kind of look at and then obviously it gets broken down into, you know, how much is repeat, how much is coming from new customers, how much is the aov and these are the output metrics. But lot of our fundamental approach to execution is very input driven.
So metrics that we control in terms of, you know, the designs, in terms of the inventorization, in terms of the design turns, in terms of the gym rays at a design level, etc. So a lot of our matrices are very input based. But from your perspective, the output metrics, I think the key one is per store revenue per store per month at a cohort level. I think that that is the key output metric I would say.
Tejas Shah
Perfect. Thanks a lot and all the best for coming for.
Operator
Thank you. Ladies and gentlemen, if you wish to ask a question, you may press star N1. The next question comes from the line of Aditya Jain from Karterla Ventures. Please go ahead.
Aaditya Jain
Hi, good evening. Thank you so much for this opportunity. Congratulations on the strong growth. Gaurav and Ramit, my question is on the same, we see a few factors playing out in this growth. I mean despite the limited growth prices, we’ve seen your customer base expanding. We have opened up new stores. But at the same time we see moderation in your stud mix. It has gone down to 64% from 69% but the gap was filled with increase in average order volume value. So how do you see these factors playing out in the upcoming quarters? Which one do you see would play a main role in. Sustaining the growth at the same time. Can you help me understand if this increase in average order value was adjusted for the prices or it’s including the price rise?
Gaurav Singh Kushwaha
Yeah. So I think in terms of playing gold and in terms of studded ratios, etc. There are. I think as we are expanding more and more stores and behaviorally 64, 69 is not. I think our general endeavor has been to kind of be more student focused and 6469, I understand that is marginal difference there, but I think that’s just behavioral change. Especially in these volatile times. Some of these mixes are just moving here and there. In terms of.
Aaditya Jain
On aov
Rumit Dugar
I think it’s probably the mix of price and.
Gaurav Singh Kushwaha
Yeah, so on AOV we don’t track it at volume because honestly with the kind of margins that we have like 38% gross margin, it’s not, it’s not driven by. Honestly, it’s not driven by volume. When someone is actually paying 38% on top of the. Well on. On top of the value of the gold, they’re not looking at kind of. They’re not driven by buying a 10 gram gold, buying a 10 gram gold chain and so on. We don’t sell those kind of. And we see AOV increase even when the gold is flat. It’s not that our AOVs decrease when gold drops or they remain flat when the gold discount. So we have not seen that. We have not seen that cause and effect.
Aaditya Jain
Understood. And this increasing customer base, customer base expansion, this is largely driven by your online efforts or new stores?
Gaurav Singh Kushwaha
Both. So essentially I think what’s happening is the omnichannel as a behavior is fundamentally seeping in more and more people and younger generation is natural online all the time. You can just see around yourself. Also everyone is just on the mobile all the time. A lot of this discovery happens in Instagram, Google and so on. People are just discovering the world on their reels, on their. On the TikToks and so on.
So I think all that is happening and all that. The more that happens, the stronger we keep on becoming because we kind of tap much better into those platforms and the traditional place. So that is happening. I think it’s a behavior, it’s a societal change. If I just kind of try to look ahead 20 years, I think everyone, all the discovery and a lot of mobile and technology or Internet is doing a lot more than what is doing right now.
So I think it’s a behavior change that has happened over the last 20 years. We’re in 2025 right now, 2005, there was no mobile, there was no hardly any wireless routers. Right from there. We have come to this point in 20 years. Next 20 years is one of the God only knows what will happen. But Internet and technology is going to play a much stronger role. And that is really a misnomer.
Aaditya Jain
Understood, since this is driven by omnichannel growth. And you also mentioned that you cut down on your marketing cost. So marketing cost has gone down by a few percentage points. I mean, how has that impacted, given your conversion cycles of around one month, how
Gaurav Singh Kushwaha
Efficiency has increased drastically in last one year? The platform’s efficiency has increased drastically.
Aaditya Jain
On the back of efficiency, it’s on the back of reducing cost per lead or any other method,
Gaurav Singh Kushwaha
Which is efficiency. Right. The platform. Okay. So typically what happens is what gives online marketing more strength over traditional marketing, the ability of that platform to know about each and individual customers. And you would have experienced that loss if you’re an Instagram user or Google user, if you have a certain intent. These platforms are much stronger now, are much more accurate now in targeting you.
So that efficiency essentially is what translates into eventual marketing efficiency also, which traditional media does not have. You still have to spray and pray. Traditional media is all about spray and pray.
Aaditya Jain
My last question is on the same store sales growth. I believe a few of other people have asked the same question. But your same store sales growth for this quarter was around 18.4%. At the same time, the FY25 growth was around 32.1%. Now I believe you have opened up new stores as well. How do you see these same store sales growth spanning out across different regions or different geographies? And if there is any particular geography that is moving slow, how are you managing inventory there?
Rumit Dugar
So I think from a geographical perspective, it’s reasonably well distributed. I don’t think there is anything to call out from a geographical perspective. I think what has also happened is you’ve seen this calendar year, gold has moved from 70, 75,000 to almost 1 lakh plus. And it’s all happened in a very short time. As Gaurav was, I think answering one of the questions earlier in terms of gold price increase. Gold price increase impacts, causes the customer purchase. So what consumers, especially our type of buyers want to see is a stable gold price or if the gold price is trending up but with not high velocity change. So that is what I think has been there for the last bulk of this calendar. Real. So I think the growth is still pretty strong considering the outlook and the environment of very high gold prices. Right. I mean, if you recall, April had a record price increase in gold. So I’ll leave it there.
Aaditya Jain
All right, thank you so much.
Rumit Dugar
Thank you.
Operator
The next question comes from the line of Gopal with SBI life insurance. Please go ahead.
Gopal
Hi, am I audible?
Rumit Dugar
Hi. We can hear you.
Gopal
Yeah. Congrats for the strong performance. My question was on a couple of things on P and L side, this franchisee commission, what is higher sequentially and year on year. So is there any one offs in this?
Rumit Dugar
Yeah, so there were some franchisee settlements that are, that are there. Right. So we are. So some of the contracts that we had earlier with the franchisees, I think as we are kind of exiting those contracts, there are some of these one time kind of settlements that are that are there when we exit these contracts.
Gopal
So right now what is the mix franchisee and own store?
Rumit Dugar
75 is franchisee and out of 292.
Gopal
And if I’m not wrong, this is part of financial cost.
Rumit Dugar
No. So there are two components, Gopal. One is the minimum guarantee that we give to the franchisees which is recorded as financial cost. And anything over and above that minimum guarantee is recorded as opex. So what you’ve seen in that franchisee expense is the delta on the, on the OPEX as there were some exit exits that we are taking and then there are some provisions, right. With respect to those exits that we are taking with those franchisees.
Gopal
Okay. And the absolute other expenses were down. And if I try to split it between spends, I was wondering why manufacturing expenses should be down absolute level.
Rumit Dugar
So two things there. One is that because we are vertically integrated into manufacturing, manufacturing expense is a function of how much production I have done in that quarter. So if you look at our inventory change, our inventory change between Q4 and, and Q1 is not very large. Right. So there was no big inventory buildup. So the production facilities were optimized for efficiency, not for inventory buildup. And thus, thus the expenses are lower.
And same time last year we were kind of ramping up, right. Because we were opening 83 stores, the store rollout was front loaded, etc. And also it’s also a function of capital. In last year, if you have access to capital, then you front load some of the inventory for seasonality, for. Store rollout. So I think all that also creates some volatility in the next quarter.
Gaurav Singh Kushwaha
And also Gopal, we had some of the factories which are new there. So and as those facts, any new factory essentially has takes some time to then start operating at more efficiency or higher efficiency, which has.
Gopal
I can understand our efficiency, but how come absolute expenses goes down is where I was wondering actually.
Gaurav Singh Kushwaha
Yeah, which is, as I said, I mentioned Gopal, it’s a function of production. Right? Like if, if I’m not building out inventory, the production that I’m doing in that quarter is lower. Thus the labor that I need to use. Right. In terms of costs, the quantum of all the expenses is much lower because I can keep moving up my. Moving up and down my mind capacity. So there is an installed capacity and then there is a mined capacity. I can keep adjusting the mined capacity to optimize for capacity utilization.
Gopal
Got it. And same is the case on the ad spend side.
Gaurav Singh Kushwaha
I asked this question the previous. I answered as part of a previous question also. So platforms efficiencies have increased. We are seeing from last year to this year we are seeing significant improvement in the efficiency of online platforms. It’s mainly Google and Facebook that we work with.
Rumit Dugar
Just to add also, Gopal, there was a downward revision in our carrot upgrade offer. Right. So earlier when we had launched the offer. So that way we are now spending less. Right. Like the absolute cost. So that also drives slightly lower cost. So out of the 34 crore, how much is related to extra carat which you are giving roughly, it will be. I don’t have the exact number. Maybe I can come back to you in terms of the exact percentages of how much is of this breakup of 34 crores.
Gopal
Generally how much it is in the full year basis.
Rumit Dugar
I think historically it’s been about 2 to 3% in that territory. Historically, I’m saying now in this base quarter it would have come down for sure, 2 to 3% of sales.
Gopal
Okay,
Operator
I’m sorry to interrupt. Mr. Gopal, I would request you please come back in the queue for further questions. Ladies and gentlemen, you are requested to limit your questions to one per participant. The next question comes from the line of Arpit Shah, the stallion asset. Please go ahead.
Arpit Shah
Hello. Am I audible?
Operator
Oh yes, sir, you are. Yes. Please go ahead.
Arpit Shah
Yeah. Hi. Hi Romit, congratulations on the IP on the listing. I’m just seeing the company very initially just wanted to understand what is particular difference between our contribution and gross margins. To give me one question, another question.
Rumit Dugar
Yeah, sure. So the delta between our contribution and gross margin is we are vertically integrated into manufacturing, so our gross margins are material margins. So between contribution and our gross margin we have the factory cost, the payment gateway, cost, logistics, insurance. So the delta is roughly the direct cost which includes production, hallmarking, certification, payment gateway and insurance and logistics. Right, right. And you did mention in some of your answers that are a mature store or at least our older stores are doing about 23 to 24% operating margins. So does this number include the corporate overheads or the branding expenses for the company or this is a standalone store number, 23 to 24% operating margins. That’s store, store level margins.
Arpit Shah
Got it. And it can just help me with the store economics as well. Inventory per store, capex core store, what kind of numbers do we do there? And how does the store look like in terms of year one revenue, year two revenue or year three revenue? And also wanted to understand the model on the franchising side. What kind of minimum guarantees or what kind of OPEX guarantees do we have to give them? And if you can just walk through that.
Rumit Dugar
Sure. I’ll take the last one first. On the franchising model, this was a model that we had in 20, 19, 20 when we started moving from pure digital to Omni and that was the capital that was available to us and that worked as mess and anything. So we’ve stopped doing franchisees largely and we are exiting those contracts. These typically had a 12 to 15% kind of minimum guarantee and revenue share on the store economics. I would actually encourage you in the interest of time to actually look at the rhp. We have a store economic model detailed out in the RHP for the older cohorts and maybe we can, I mean it will require a detailed answer. So just in the interest of time, maybe you can have a look at the RHP and then you can reach out to us and we can take that up.
Arpit Shah
Sure, sure. Thank you. I think we’ll have a call soon.
Rumit Dugar
Thank you.
Operator
Thank you. The next question comes from the line of Kualia bank with IIFL Capital. Please go ahead.
Percy Panthaki
Hi, this is Percy here from. I just wanted to understand, on the inventory of 1750 crore, would you be able to give me an idea how much of it is actually store inventory? Just, just one second. It’s about 70%. Close to 70%. 70%. So that means that it’s around 4.2, 4.3 crore per store on an average. My question was that does this number vary widely between stores? If the average is 4.2, does it vary widely? Or it will be in a very narrow band between different stores?
Rumit Dugar
It, it does, but to bring, bring down the averages, you know, so it will. So. So the first part of the answer is yes, it varies. It’s a function of vintage performance. You know, some stores have higher productivity and you back the winners, you put more merchandise. It would vary. But I think at a broader level, these averages are reasonably representative of where we are. So I would say these are not huge averages, these are reasonable averages.
Percy Panthaki
Okay, because my question was if this number goes up as the store matures and as it gets more sales, then do we see the average inventory days, more or less stubborn at this level? That is what I wanted to understand.
Rumit Dugar
No, I think the way to, as I said look at this is, you know, Jim Roy, right? Like that’s really the fundamental metric. I think there is a very classical way of looking at a typically a plain gold commodity kind of business, which is just an inventory turn business. But in our case, we are a product and design based business, then as a result it’s just not inventory turn. It’s also at what margin we are turning that inventory because fundamentally, obviously we have to generate a strong roc, right. Which is what our older cohorts are demonstrating.
So I would urge to look at Jim Royce and because that’s the metric that we optimize. So inventory turn will give you half truth, margins will give you half truth. So the combination is where.
Percy Panthaki
At a company level. Jim Roy will go up, or do you think. I mean what will drive the gymroy at the company level? It’s just the overall company level.
Rumit Dugar
At a company level, the Gym Roy will be driven by store vintage and maturity. So you have a fundamental Jim Roy which is visible in let’s say an FY 1920 cohort. And their productivity unit economics are quite stable, still improving. So as the broader portfolio gets to maturity. So if my entire portfolio is at 1012 crore at the portfolio level productivity you will see the Jim Roys and Roc that you see at the store at a corporate company level. So I think that’s the way to think about it.
Percy Panthaki
Got it. And in terms of store expansion, when you put new stores now, are you rethinking the size or will you continue with this? 18, 1900?
Rumit Dugar
I think at the moment we are. We are good.
Percy Panthaki
Okay. Okay. That’s all from my side. Thank you and all the best.
Operator
Thank you. Ladies and gentlemen. That was the last question for today’s conference call. I now hand the conference over to the management for their closing comments.
Rumit Dugar
Thank you everyone. Thank you for taking time to join our first earnings call. The ENY team and the Bluestone team are available. If your questions have not been taken up in the queue due to paucity of time, please feel free to reach out to us and we’ll be happy to address them. Thank you and good evening.
Operator
Thank you on behalf of Bluestone Jewelry and Lifestyle limited that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.