Bluestone Jewellery and Lifestyle Ltd (NSE: BLUESTONE) Q3 2026 Earnings Call dated Jan. 22, 2026
Corporate Participants:
Diwakar Pingle — Head of Investor Relations
Gaurav Singh Kushwaha — Founder and Chief Executive Officer
Rumit Dugar — Chief Financial Officer
Analysts:
Percy Panthaki — Analyst
Devanshu Bansal — Analyst
Saurabh Jain — Analyst
Tejas Shah — Analyst
Sanidhya — Analyst
Karan Gupta — Analyst
Subhanu Bangal — Analyst
Abhay Sikaria — Analyst
Gopal Navandar — Analyst
Presentation:
operator
Ladies and gentlemen, good evening and welcome to the Bluestone Jewelry and Lifestyle Limited Q3FY26 earnings conference call. 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 this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Deepakar Bingley. Thank you. And over to you sir.
Diwakar Pingle — Head of Investor Relations
Thank you very much. Supnali Good evening to all participants in this call. Welcome to the Q3 and 9 month FY26 earnings call of Bluestone Jewelry. Before we proceed on this 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 modus expressed or implied in such forward looking statements. Please note that we have mailed the results in the same as available in exchange.
In case you have not received the same, you can write to us and we have to send the same also to take us through the results and answer your questions. Today we are the management of this Loan Jewelry and Lifestyle Limited represented by Mr. Gaurav Singh Krishnahar, Founder Managing Director, Chief executive officer and Mr. Anut Broodh, chief Financial Officer. We will start the call with a brief overview of the quarter gone past and then conduct the Q and A session. With that said, I’ll hand over the call to Gaurav. Over to Gaurav.
Gaurav Singh Kushwaha — Founder and Chief Executive Officer
Good evening everyone and thank you for joining us today for Bluestone’s third quarter earnings call. I am pleased to share that we. Have had yet another stellar quarter marking an important milestone for the company. We delivered our first quarter of reported net profit, a clear inflection point in the evolution of our business model. This was driven by good revenue momentum and a very solid operating EBITDA performance. This is not just about 1/4. It reflects years of disciplined execution and structural investment we have made to build a scalable business prioritizing long term value creation. What gives us confidence is that this profitability has come alongside strong underlying growth trends. And as we look ahead, we see revenue Momentum accelerating into Q4.
Further details on the financial performance will be covered by Romit in his remarks. Let me spend a few minutes on the broader demand environment. The sharp rise in gold prices significantly altered the industry’s demand mix. Last quarter we saw the market shift towards commodity investment led categories such as coins and chains which are typically price led lower margin segments. Now these are the categories where we have historically chosen not to participate aggressively. Given our technology led product first approach that focuses on design differentiation and stronger gross margins, our performance is better understood by looking at consumer product demand.
Here trends remain encouraging despite sharp gold prices. Festive demand in October was strong, moderated in November and then rebounded sharply in December. From our perspective, one of the impacts of rising gold prices was that the certain entry level product prices, certain entry level price points got vacated. In response, we repopulated these price points and we saw some of that result. The result of some of that in December with December exit revenues growing approximately 35% year on year. A key enabler for this performance continues to be our omnichannel strategy which seamlessly connects our online presence with a steadily expanding physical retail footprint.
This integration allows us to engage customers across discovery, purchase and repeat cycles which while leveraging data and inventory more efficiently across channels. As of December end we had 323 stores across 130 cities, having added two 12 new stores during the quarter, further strengthening our reach and brand presence. Our customer base grew 25% year on year to 903,000 customers and same store sale growth of 12% year on year. Again, I would like to reemphasize that December SSG’s December same store sale growth exit rates were in mid teens with January trending better than December. Let me now turn to one of the critical drivers of our long term growth and margins which is a strong cohort performance.
We have been confident that all our cohorts will demonstrate productivity that was seen by FY19 and FY20 cohorts. To give you more color, we are happy to share some more details about on the cohorts from various stages for nine months. For YTD or nine months stores opened in FY19, 20, 2122 and FY23 delivered revenues. Yeah, let me just briefly support nine months for YTD. Stores opened in FY19 1920 delivered revenue per store per month of approximately 1.2 crore. Stores opened in FY21 22 delivered a per store per month revenue of approximately 80 lakhs and stores open in FY23 delivered revenues per store per month revenues of approximately 70 lakhs for first nine months of the year.
This translates into analyzed revenues of 14 crore, 10 crore and 8.3 crore respectively. These cohorts comprise more than 150 stores. These cohorts comprise of more than 150 stores and as mentioned, these cohorts, all these cohorts are growing at a pretty healthy clip and we expect all the remaining cohorts to also eventually catch up with the 59020 cohorts. With that, I’ll ask Rumit to share his opening remarks and then we can open the floor to the Q and A.
Rumit Dugar — Chief Financial Officer
Thank you Gaurav Good evening everyone and thank you for joining us today. I’ll briefly walk you through the financial performance for this quarter. I can keep my remarks brief as we have detailed disclosures and materials available on the stock exchanges. I would encourage you to go through our management commentary and the investor presentation which have a lot of detailed disclosures. Turning to the quarter during the quarter standalone revenues grew by 27.4% year on year to rupees 748 crores. As mentioned earlier in our call, our revenues are accounted for on retail sales basis including franchisee stores.
This means our reported growth reflects pure secondary sales to consumers even for franchisee stores, offering a clean and transparent view of demand at the retail consumer level. Excluding inventory gains, pre index EBITDA margins for the quarter stood at a solid 12.1% at 90.3 crores driven by robust contribution margin performance, greater number of store cohorts moving in, better productivity buckets and scale benefits on corporate costs including A and P. More importantly, on a YTD basis we are at 129.6 crores of pre index EBITDA versus 7.4 crores last year YTD. This reflects a margin of 7.4% YTD as compared to less than 1% in same period last year.
This clearly demonstrates that the operating leverage is starting to reflect in EBITDA margins and growth. There is still a fair Runway to expand this further driven by cohort maturities and business scale. As Gaurav highlighted earlier, this was our first quarter of reported PAT of 71.5 crores as compared to a loss of 26.9 crores in the same quarter last year. Importantly, the business generated a solid cash profit of about 122 crores for the quarter contribution margin which is key product margin metric that we look at excluding inventory gain stood at 33.3% an improvement of 333 basis points year on year.
This is despite lower studded mix on a yy basis of 61%. This was offset by scale benefits, improved product mix within studded products and manufacturing efficiencies. ANP spends continue to show operating leverage Supported by business scale and high repeat mix with repeats contributing 57.8% of revenues this quarter, our old gold exchange program continue to remain most competitive in the market. Overall A and P as a percentage of sales stood at 5.7% for the quarter, down about 129 basis points year on year. To conclude, this quarter clearly demonstrates the operating leverage embedded in our model. There is potential room to expand EBITDA significantly ahead of revenues and with the cost discipline with which we are scaling the business.
With that we can open the floor for questions. Swapnali, thank you very much.
Questions and Answers:
operator
We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on their touchstone telephone. If you wish to remove yourself from the question queue you may press STAR and two participants, you 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 is from the line of Percy from lifl. Please go ahead.
Percy Panthaki
Yeah, hi team, just wanted to understand the margins here. So on a sequential basis the margins excluding inventory gain pre index have gone up from about 3% to 12%. So that’s a 900 basis points kind of expansion sequentially. I understand that the contribution margin expansion x inventory gain has gone up about 150 basis points and there is some saving and ad spend maybe approximately about 300 basis points. So that explains about half of that 900 basis points. What is the remaining half? Where has the sort of margin expansion come from?
Rumit Dugar
So Percy, I think in the last quarter also we explained what truly happens is you have to look at how the aggregate cost base kind of moves. So if you look at between Q3 and Q2, Q2 revenue was 513 crores and Q3 revenue is 748 crores. So for that incremental revenue that we added sequentially our aggregate cost base including everything right? Employee cost, store rents, store facility maintenance costs don’t shift significantly on a quarter and quarter basis. So this is the foundational operating leverage that is inbuilt in our business. And as more store cohort productivity kind of expands, the fixed cost base remains reasonably stagnant or grows at a modest pace while your incremental revenue will flow through to EBITDA at the rate of contribution margin.
So that’s really the flow through and if you do the delta between incremental revenue that we added at the contribution level, you’ll pretty much get to the operating leverage and the outcomes that we have delivered.
Percy Panthaki
Understood. So for Me just for me to get a sense of the operating leverage in Q3 and therefore actually try and project annualized numbers. Because this is clearly a big quarter and there is a huge operating leverage. The question I wanted to ask you is that on account of normal seasonality the monthly sale in Q3 is approximately what percentage higher compared to average for the year. If you just sort of. I’m not talking about this year or anything. I’m just talking as a concept or in principle. Q3 Typically the monthly sale is how much percentage higher than annual average.
If you can tell me that it will help in calculating the operating leverage impact for sort of the full year. Or rather what I want to say is that adjust this 12% margin on a Q3 basis. How much would it normalize work out to an annualized basis given the different sales throughput for the quarter versus the year.
Gaurav Singh Kushwaha
Yeah. Parsee Gaurav, this side. I think. Depending on how the operating revenue moves between quarters I think that percentages. That percentage changes drastically. Okay. As we saw between Q1, Q2 and Q3 also the Q3 is at around 12% now. Last year Q4 was around 460 crore. And what we are seeing right now is approximately. So we are trending at almost 35% growth over the last Q4. And let’s say if that continues full year would land somewhere between 622. Sorry, this Q4 will land somewhere between 620 to 630 crores. I’m just giving you telling you how to look at it. Now if we do the same calculation here also that. Okay. On 748 crore we had 90 crore of green day EBITDA. Then Q4 with those numbers Q4 would be approximately, let’s say 120 crores lesser than Q3.
Percy Panthaki
Right.
Gaurav Singh Kushwaha
Your revenues. Right. So revenue revenue for Q4 would be approximately 120 crore lesser than Q3.
Percy Panthaki
Right.
Gaurav Singh Kushwaha
33% of that of 120 would be approximately 3740 crore. Approximately 40. 40, 4042 crore. Right. So Q4 EBITDA hence should be let’s say lesser by that much. And then that should serve the base for subsequent Q1. That’s how we calculate it is in back of the envelope calculation. That’s how we do.
Percy Panthaki
Okay. Okay. Okay, understood. I’ll probably take this offline because I think it’s a little more complex than that because we’ll have to look at it on a per store basis also because as the number of stores are getting added the cost base would also increase to that extent. But anyways, I’ll take that offline. Also, I wanted to understand one more thing that you said that there were some entry price points which were unaffordable and therefore, I mean the product merchandise this quarter was very less at the entry price points. Is that also a factor? Because those entry price points may be at sort of lower margin. So is that like a factor which is driving the margins? To an extent. And because you are repopulating those price points, will that versus this quarter again see a margin drag?
Gaurav Singh Kushwaha
Yeah, Parsi. So we generally don’t. So in our data we don’t see that. It’s not that let’s say sub 20,000 or sub 30,000 products have lower gross margins or lower contribution margins. That kind of a trend is not there in the data. So there’s no implication of that. The only implication of those price points being wicked was that. CB jb, traditionally or historically we have been very strong in entry level price points, which is where we acquire a lot of customers and then kind of grow with them over time with those price points being vacated.
We believe that our growth suffered in November and let’s say first one week of December and which is. So we started work on that, let’s say early in the November and then it took some time for us. So I think our growth did get impacted because of. Our growth got impacted because of that. But in terms of percentage shift in the gross margins or contribution margin, that is not a trend that we have in our data.
Percy Panthaki
Understood. And lastly, if you can give some idea on how do you look at store additions on an annual basis this year as well as next year.
Rumit Dugar
So this year I think we will be in that 65, 70 kind of range. Right. We close at 320 through 220, 323. So yoy in that 70 kind of handle versus March 25th, I think next year. We’ll come back to you once we finish finish this year. So when we discuss Q4 is when we can give you better color in terms of how we are looking at next year.
Percy Panthaki
Okay. Yeah, that’s it from me. Thank you.
operator
Thank you. The next question is from the line of Devanshu Bansal from MK Global. Please go ahead.
Devanshu Bansal
Hi Bharav, thanks for taking my question. So I just wanted to sort of delve deeper into on the growth front. So it is a tad lower versus that reported by peers in both the traditional jewelry space as well as the space that you operate in. Even when you say that this is the kind of number that Also is materially below what the others have reported. Right. So can you sort of give us more granular explanation as in what exactly led to a slower growth for us?
Gaurav Singh Kushwaha
Sure. So, so, okay, so first of all, very different operating environment this last quarter was compared to how things generally are with gold being that volatile. It’s the most volatile territory that I have seen the gold in. Now what that results in. So basically two things. So what that results in that actually increases the demand for commodity products like gold coins with very little margin and gold bangles with very low margin, etc. And that is where a sharp increase in that demand comes from. And almost all the traditional dealers are heavily indexed on those and where as we are extremely under indexed on all those products.
Secondly, almost all the jewelers report primary sales, whereas we only report retail sales. And whether that is, whether that is traditional jewelers, whether that is Carat Lane, whosoever is, it’s just a mix of primary and secondary sales. So there’s general delta between that and the retail sales also. So these are the two major differences. And then that merchandising issue that we know noticed in our inventory somewhere in end of October and early November. And I think these are the three reasons why the growth numbers are lower. But we see that as a one off. I think in stable environment things will kind of revert back to normalcy. And also in our December exit rate, in our January rate. So basically on our continuing run rate we see almost 35% of growth, which is. That keeps us happy. That’s a good note.
Devanshu Bansal
Fair enough. So but however still Carat lane reported almost 40% growth, so there may not be such a material difference between primary and secondary. But I take your point that at least the growth has sort of improved for you in December and subsequently in Q4 as well. So and second question from LGBT space.
Rumit Dugar
Perspective, we are seeing so Devanshu, just on the first bit that it is not materially different. I think if you look at last quarter, their reported revenue growth was 32% and retail sales was 25. So it is different, at least historically. So maybe I think you should just see what the retail sales numbers are.
Devanshu Bansal
Fair enough from it. So thanks for the clarification. The other part was on the LGD space. So we are seeing incremental investments across players and we have also sort of increased our investment in ethereal. So any incremental views on this space in terms of how we are sort of planning to ramp up our presence would be helpful.
Gaurav Singh Kushwaha
Yeah. So very early days for Lab Grown, we are seeing some good traction in Lab Grown brand Ethereal. They have very few stores and it’s kind of a discovery phase and. It. Seems to be doing well. And hence we have decided to put in some more money. And like I said, it’s a very early stage for that, for that product segment per se. So I think we’ll have to see, we’ll have to observe how it evolves and then, then take a firm opinion that.
Devanshu Bansal
Gaurav, any assortment or difference that you can help us better understand in terms of how Ethereal is sort of playing this space and versus how Bluestone is playing and also any customer segmentation that you can help us better understand. Is it the same customer being targeted by both Bluestone and Ethereal or they’re entirely separate consumer segments that are being targeted by both the brands.
Gaurav Singh Kushwaha
So, okay, so the way it is being run is Ethereal, which is a subsidy. We have 74% holding in that, but there’s 26 rest of the equities with the founders Nitesh and Sharon. So we generally have a very low touch approach in the sense we, we encourage them to discover their own products, we encourage them to discover their own customers and so on. So there’s not too much of an operational overlap between Bluestone and Ethereum. They’ve been in the business for around five, six months. And I think these are, they are also discovering what kind of products work for them, what kind of products do not work for them.
There’s not a very, so we have not started with a very strong point of view that, okay, these are the products that are exactly going to work in labor. It’s a very, very, it’s a very, very early days for that. So they are also doing their own discovery. So it’s kind of a founder led company where we have 74% holding and Niteshin Sharath run it. So I honestly do not have a very strong point of view on what kind of products should work for them. It’s their job to figure it out.
Devanshu Bansal
Thanks Gaurav. Thanks for taking.
operator
Thank you. A reminder to all the participants, you may press Star and one to ask a question. The next question is from the line of Sourabh Jain from HDFC Life Insurance. Please go ahead.
Saurabh Jain
Yeah, hi, Gaurav and Navet just wanted to understand. So if I look at the yoy expense line item, right. So other expenses X of A and P that have gone down by 11 crore. So what explains that?
Rumit Dugar
That is primarily driven by our improvement in contribution margins. So on the Manufacturing scale and efficiencies. We had couple of new factories which had, which had come up. So as, as they, as they build process efficiency through time and as we, as our scale is growing, the capacity utilizations or manned capacity utilizations keep expanding. There is that operating leverage that flows through on the direct cost.
Saurabh Jain
No, I’m saying that if I am talking about the absolute number. So absolute number has actually come down by.
Rumit Dugar
Yeah, yeah, sort of. I’m talking about, I’m talking about absolute numbers itself. So. If the productivity at a factory level is X which is a new factory over time as people build more process efficiency, the amount of people, time, material, etc. That you need to spend on, that goes down. So there is that absolute operating leverage that comes because you’re pushing up utilization. So there is, there is that factory related cost that sits in other expenses which is contract labors, job workers, etc. So there is a fair amount of operating leverage that comes from there even on an absolute cost basis.
Saurabh Jain
Sorry to push this further. So I’m just saying that if the units have gone up in the manufacturing facility, I understand the per unit cost might come down because of the utilization increasing. But how can the absolute cost come down? I’m not able to understand that.
Rumit Dugar
Because. Because your manned. Yeah. So your manned productivity, if you needed 20 people to create a piece because the process efficiency, scale etc are not there now you need need lower, lower number of people to do the same task. So the absolute cost actually comes down. Second is we’ve also done some consolidation in terms of building scale. Right. We operate three factories. So there is some redistribution of, you know, the products etc. That can get manufactured. So we can build more competence in single factories where the productivity that we get for the same throughput continues to expand. So there is, there is some part of that on the manufacturing side that happens.
Saurabh Jain
Okay. Okay, fine. Second thing is on the ent. Expensive side. So what is the range we should expect for the like full year going forward? This year closed nine months at about 7 percentage which is over about 300 basis point lower than the last nine months of FY25. So what is the number that we should build in here? Like the absolute number at about 40, 45 crore. Is that the run rate? We should build it for the on a quarterly basis going forward.
Gaurav Singh Kushwaha
So as you were expanding stores rapidly. We firmly believe that there’s significant operating leverage sitting on the np. Also because the same advertising, same promotion spend, now we have more stores to actually tap into the demand being generated by that Right. So we, I think historically it was 12%, 9% and so on. And we expected it to come down to around 6%. At 6%, we’ll be scaling it proportionally in the revenues. So I would say I think YTD 6.8%. But we would like to, since these are early stages for the brand also we would like to keep it kind of pegged at around 6% going forward.
Saurabh Jain
Okay. Okay, thank you. Thank you.
operator
Thank you. The next question is from the line of Tejas Shah from Evander Spark Institutional equities, please.
Tejas Shah
Just wanted to know what was the revenue per square feet that we clocked this quarter and what was that number last year, same quarter?
Rumit Dugar
I think the metric that we look at and which we’ve also detailed out in the management committee and Gaurav spoke about in opening remarks, is revenue productivity per store per month by cohort. So those are the metrics that we should look at given. Given where our gross margins are and the kind of store productivity and absolute contributions that we generate for a 10 crore or a 14 crore store, the rent or the OPEX would be like about a crore. So really, from a per square feet basis, etc. It really doesn’t. Is something that we don’t track and look at.
Tejas Shah
So the reason I ask this is because it’s partly pertaining to the previous participants questioning that if we do that math and then you’re saying that we as a company, we don’t follow that, but if we do that math, this quarter looks like more of an excellence on cost discipline, more coming from cost discipline than the operating leverage because that number hasn’t moved much, apparently. And a lot of cost discipline is visible in our production cost and cost line items below that which the previous participant also highlighted. So just wanted to know that how to think about this quarter. Were you surprised on the productivity of the store or where was this quarter? An excellence on cost discipline that we were kind of promising for a while now.
Rumit Dugar
I think the way to see this is, I think what we’ve been always saying is that ours is a fixed cost model where there is tremendous amount of operating leverage which will be driven by stored productivity. So it’s not about cost excellence. It is about absolute operating leverage. So I think the way to think about this is quarter on quarter, our cost base has not shifted. Right. So if I was running 300 stores in Q2, I’m still running 300 plus stores in Q3 with the same cost base. But as my revenue is revenue base is expanding.
Right. And if you see our trend for the last four, five, six quarters. That’s pure operating leverage pages that is playing out. It’s not only, you know, just we’ve cut cost or anything like that. Right. It’s, it’s just pure operating leverage where there is incremental revenue which has a high flow through rate given our gross margin profile and contribution margin profile, which is significantly different from any other player that you may see in this category. So the flow through rates are way, way higher than you would see in any other player. So which is why it surprises.
I understand where you’re coming from. It surprises because of the flow through rates are so high. But then you have to compare the difference on the contribution margin of ours versus generally the category that people operate with.
Tejas Shah
Perfect. Thanks a lot and all the best.
operator
Thank you. The next question is from the line of Sanity from Unicorn Assets. Please go ahead.
Sanidhya
Hi. So my question is like kind of follow up from the previous version. I think everyone is confusing. This is the operating leverage or cost cut, whatever. So let me ask you this way. Suppose say gold prices today, 1.5 lakh goes to say 2 lakhs. So like 33 rise and like their mix is like 50, 60 for the gold. So assuming both the numbers, let’s say are on average our revenue goes up, not by the volume, just plain prices like 15, 20% up. Do you think that out of that extra 15, 20% like 33% contribution margin, most of it would flow down? That’s what you’re saying?
Rumit Dugar
See, I think the simple point that we are making is that there are 323 stores and the cost base of that operating those stores and operating business is sort of already embedded. So incremental revenue that we are generating has a very high operating leverage and that is predominantly driven by aging. Right. And this quarter, please, I encourage all of you to look at our cohort performances. I think historically we’ve got feedback that, you know, tell us how your other cohorts are kind of doing. And this quarter we have kind of given some color on how our cohorts are doing.
And there are unit economics that you can model to those revenue productivity numbers and that will kind of explain that why there is so much operating leverage in our business. So it’s not about just gold price, you know, moving from 1 lakh to 1 lakh, 50 or 2 lakhs. It is about how fundamentally our business operating model is structured and where we are in that journey of operating leverage. So we are still in that early days and as I mentioned in my opening remarks, there is still significant room for margins to expand as we continue to build scadi in the business.
operator
Sanidhya?
Sanidhya
Hi. Yeah, sorry. So secondly on the contribution margin only so we have depicted so since that like old stores you can say or the mature stores have given like 40% gross margins, 35% kind of contribution margins and 25% kind of EBITDA adjusted a bit. Do you think this number is the core or do you think there is further room for even this number to expand looking the way things are going in this quarter or you are saying looking forward?
Rumit Dugar
So I think one contribution margins are not impacted by just aging, right? Because contribution margins are more fundamental to the product mix that we carry, the merchandise we carry and the way we price our products. I think the delta of aging actually shows up more in the operating EBITDA. So operating EBITDA for this quarter was 12% on a pre index basis, 7.4% for YTD. And as I mentioned there is, there is still Runway for the operating margins that we’ve seen by TD to expand further because there is still a lot of vintage driven growth. If you look at our FY19 20 cohorts are at 14 crore revenue productivity and the other cohorts are at 10, 8 and a half or 8.3.
So obviously there is room for them to scale further right at least to 14. And that is, that is what we see at the minimum. So that as these continue to ramp up there will be, there will be more operating leverage that will flow through because the cost base of these are not going to expand.
Sanidhya
Full work. And I would really request you to please guide like thoroughly on the store extension going forward because right now the growth looks tremendously coming. Even the cohort level looks good to be like next two years. But beyond that for growth visibility I would request you to please share from going forward the expansion module. Thank you.
operator
Thank you. Before we take the next question, a reminder to all. You may press star and one to ask question. The next question is from the line of Karan Gupta from acmil. Please go ahead.
Karan Gupta
Yeah. Hi. My question is again on the related to the previous participants on the on the margin side operating EBITDA margin side. So…
Rumit Dugar
I can’t hear.
operator
Karan, can you please comment? There is a lot of background.
Karan Gupta
Hello. Now I think it’s audible loud and clear.
operator
Yes, please proceed.
Karan Gupta
Yeah, so on the margin side how much the margins we can do when our most of the stores are aging towards 14 crore band annually.
Rumit Dugar
So I think the way to think about it is that at 10, 10 to 12 crore kind of productivity, the store level pre index margins, margins are at about 22 to 24% and as Gaurav mentioned, you load about 6% A&P. And then some leverage on the corporate cost longer as broader cohort productivity gets to that 1011 crore kind of number, the baseline margin for the business is going to be in like low teens at the minimum with significant investment continuing on the anp. So I think that’s sort of where the trajectory should go to. So we are at 7.4% YTD, which is, which is why I mentioned in my commentary that is significant room and significant Runway for expansion.
Karan Gupta
So 20 to 24% on plain displays.
Rumit Dugar
That I mentioned at the store level ebitda. And then you load amp and corporate cost.
Karan Gupta
Okay, okay. How many stores out of 1023 are running at 10 to 12 or 14 kilo of run rate or how many are.
Rumit Dugar
I think we have given a lot of disclosure already on cohort. I don’t think you see many companies giving these kind of disclosures. I don’t think we can go beyond this because there is a lot of competitive data here. So I think overall the cohorts are large enough.
Karan Gupta
Yes, 50%. Yes. 50%.
Rumit Dugar
Yes. So that’s a good enough base for you to draw conclusions on where these cohorts can trend to.
Karan Gupta
Thank you. Thank you.
operator
Thank you. The next question is from the line of Subhanu from Three Head Capital. Please go ahead.
Subhanu Bangal
Yeah, thank you. Good evening and congratulations for this kind of modest performance. Hello?
operator
Yes you are.
Subhanu Bangal
Can you hear me? Okay, sir, as you mentioned, our store, store opening guidance for this year around 65 to 70. But if I am remember right, last. Quarter. Hit target around 75 to 80. Are you reducing your guidance?
Rumit Dugar
No, we were in the 70, 70 kind of handle and I think we should be broadly in that, in that territory. I don’t think there’s a significant deviation. So maybe the upper end. I think we’ll be, we’ll be in the 70 kind of handle. Right. So plus minus five. Obviously we have to look at the operating environment and be a little tactical about it.
Subhanu Bangal
Okay. My next question will be this quarter. We sold that positive quarter. This pet. Positive quarter will be sustained for next Couple of quarter or this will be sustained.
Rumit Dugar
See, I think it’s hard to give an absolute forward looking statement. But let me try and address that question in a way that I think fundamentally there is enough operating leverage in the business which has got demonstrated in the past three quarters, particularly you’ve seen seen it in Q3 as well. So we see still Runway for margin improvement versus where we are on ytt. And that’s where we would like to leave this at.
Subhanu Bangal
Okay. What kind of SASB we are targeting.
Rumit Dugar
So I think in his commentary Gaurav had mentioned that December XSGs were in mid teens and January is trending better than December. So I think I would just reiterate that statement that Gaurav had made in answer to that question.
Subhanu Bangal
Thank you and best of luck.
operator
Thank you. The next question is from the line of Abhay Sikaria from Weekend and Company. Please go ahead.
Abhay Sikaria
So comparing quarter on quarter performance. Okay. If you talk about Q3 of 24 it there was a loss of around 27cr and Q3 of 25, there’s a PAT of around 69cr. So the huge difference it is because of the valuation gain or actual operational or quantity performance. And what will be the valuation gain part? If you can just highlight on those.
Rumit Dugar
Yeah. So we’ve disclosed the inventory gain for the quarter. It’s 58.9 crores. So even if you adjust for that we have a positive pat.
Abhay Sikaria
Okay. And any, any, any particular reason means what has been change in this particular quarter? Because I have been observing that you know we have been making losses for quarter and quarter also even in the Q2 Q1 so and in even the last year. So any particular or major changes which you have made so that we have been positive in this particular quarter t hree.
Rumit Dugar
It’s just the way our business is structured, just the way we’ve scaled the business is very, very different from what you see typically with traditional big box retail given we are more omnichannel driven. So there is a front loaded cost base that is sitting in our P and L. And as our stores build vintage as the broader absolute revenue scales there is operating leverage that is flowing in both at store level and at corporate costs, A and P level. So I think that is what is kind of playing out. And as I said there is still Runway to continue to expand.
Abhay Sikaria
Okay, thank you and best wishes to the company.
operator
Thank you. The next question is from the line of Gopal Navandar from SBI Life Insurance. Please go ahead.
Gopal Navandar
Hi. Am I audible?
operator
Yes, you’re audible. Please proceed.
Gopal Navandar
Congratulations the team for good performance on profitability. Two, three things here. One is what is our gross debt and net debt?
Rumit Dugar
Sorry. So gross debt is about 650 crores. Net debt is about 222.
Gopal Navandar
222 net debt or net cash? Hello.
Rumit Dugar
Yeah. Yeah. 222 crores is net debt and 650 crores is gross debt.
Gopal Navandar
Okay. And inventory?
Rumit Dugar
Inventory at the end of the quarter?
Gopal Navandar
Yeah.
Rumit Dugar
Yeah, 2280.
Gopal Navandar
Okay. So I think if I recollect it, right, last quarter we had net cash and lower inventory. This quarter we only added 12 stores. And this matrix is where I think we are, you know, kind of not able to optimize. So can you just throw some more color on inventory when we can see inventories coming down?
Gaurav Singh Kushwaha
So. Gopal, bulk of the change in inventory is actually driven by movement in gold price on the hedge positions. Right. So this is bulk of the change between Q2 and Q3 is coming from mark to market on hedge positions. So it’s, it’s largely driven by that.
Gopal Navandar
And in terms of network addition, should one look at next year and year after.
Rumit Dugar
So I think next year on an absolute basis, maybe after Q4 we’ll be able to give you a more concrete number. But fundamentally, if you see at least our last two, three year trend, I think we’ve been in that 70, 80 kind of handle, right? Broadly. So that’s been, that’s been the historical trend. And at our end see there is, there is a large enough distribution that we already have. Right. Obviously there is significant room to continue to expand network. If you compare us to a lot of the peers and you just map us our city presence to let’s say the large peer city presence, there is significant growth Runway both on city and density.
So from a medium term perspective there is significant Runway to keep expanding the network. But absolute number. Gopal, I think maybe after Q4 we can come back to you on what we are looking to do in FY27.
Gopal Navandar
And one more thing, considering that, you know, this increase in the gold prices earlier our plan was to reduce POCO stores and convert them into PoCo. Considering the kind of investments it needs for being stored, will that plan be delayed or will still, you know, consolidate from.
Rumit Dugar
So the consolidation is happening from Foco to Cocoa and that I think will continue because that is a very expensive capital structure that we are running related to what our cost of capital is. So that consolidation obviously makes economic sense and is pat accretive so that that piece will continue. Gopal, there’s no change in that thought process or strategy.
Gopal Navandar
Thank you. Thank you very much.
Rumit Dugar
Thank you.
operator
Thank you. The next question is from the line of Devanshu Bansal from MK Global. Please go ahead, Proceed with your question.
Devanshu Bansal
Yes. Hi. Thanks for the follow up opportunity. Sorry, I was on mute I wanted to build on Gopal’s question. So you indicated that the mark to market has been built upon the inventory this quarter. Can you call out the quantum of that? Then what is the MTM loss that has been relating to the inventory?
Rumit Dugar
MTM loss? There’s no MTM loss. If you’re hedged, your inventory gets marked up. Right. For, so, so that’s about it. I mean, there is, I mean, I, I don’t want to call out, you know, how much of it is, but, but you can actually see how much the gold has moved between September 30th and December 31st. Right. So, so it’s an easy calculation.
Devanshu Bansal
So basically that means, right. So when gold price is in an increasing environment, right. And on your hedge contract, so you will be having some losses, right? So that, that has built upon the inventory, right, which you have the amount which, which has led to this increase in inventory. Is my understanding correct?
Rumit Dugar
It’s, there is, I mean, it’s a mark to market. Right. So if you’re, if you’re, if you’re borrowing through gml, the value of GML will go up and the value of inventory will go up. So this, this happens on leased gold. This happens if you are hedging through gml. This happens if you’re hedging through futures. So.
Devanshu Bansal
No, that’s fair.
Rumit Dugar
Yeah. This is not specific to, this is not specific to us. You can look at any balance sheet.
Devanshu Bansal
No, that’s fair.
Devanshu Bansal
I understand that. So the intent of the, the intent of asking this was as in, can this loss sort of come up in PNL for future quarters. Right. So I just wanted to get some. Sense around, I think I, I, I.
Rumit Dugar
Think why will there be a loss on a hedged inventory? I think foundationally you need to look at how hedge accounting works. You will be realizing the value at spot. And if gold prices go up, you mark, your liability goes up, your inventory goes up. If gold prices go down, your liability goes down, inventory goes down, and you spell, you sell at spot. So really, I don’t understand the question. I mean, that’s not how hedging works. I mean, hedging is protection to the pnl.
Devanshu Bansal
No. Fair enough. So maybe I just wanted to repeat my question. So suppose you sold, say, 100 kgs of gold, right? But this quarter you may not have sort of closed those particular contracts. And that might have added to the MTM of hedging laws. So I just wanted to check that whether in pnl.
Rumit Dugar
It’s, I, I think we can maybe take it offline because this will.
Devanshu Bansal
Sure, sure, sure. No issues. Yeah, yeah. This will give a wrong reflection.
Rumit Dugar
Yeah, yeah. I think, I think what you are saying incorrect. You need to understand how the hedge accounting works and how hedging fundamentally works. And I’m happy to address this offline. But to reiterate, hedging doesn’t create a loss. You are covered on the price and you realize that spot always.
Devanshu Bansal
So yeah, sure. Yeah.
operator
Thank you. A reminder to all the participants. You may press star and one to ask a question. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing comments. Thank you. And over to you, sir.
Rumit Dugar
Thank you. Thank you everyone for joining us today and look forward to being in touch with you for the next quarter. Thank you and have a good evening.
operator
Thank you very much on behalf of Bluestone Jewelry and Lifestyle limited. That concludes this conference. Thank you for joining with us today. And you may now disconnect your lines.