D. P. Abhushan Limited (NSE: DPABHUSHAN) Q2 2025 Earnings Call dated Oct. 30, 2024
Corporate Participants:
Siddesh Chawan — Associate Vice President
Anil Kataria — Whole Time Director
Vikas Kataria — Promoter
Unidentified Speaker
Analysts:
Devanshu Bansal — Analyst
Vikrant Kashyap — Analyst
Divya Daga — Analyst
Devender Wadhwa — Analyst
Unidentified Participant
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to D. P. Abhushan Limited Q2 FY ’25 Earnings Conference Call. [Operator Instructions] And there will be an opportunity for you to ask question after the presentation concludes. [Operator Instructions]
I now hand the conference over to Mr. Siddesh Chawan from EY, Investor Relations. Thank you. And over to you, sir.
Siddesh Chawan — Associate Vice President
Thank you, Shifa. Good evening to all the participants on this call. Before we proceed to 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 risk that could cause future result performance or achievements to differ significantly from what it is expressed or implied by such forward-looking statements.
Please note that we have mailed the results and the same are available on the Company’s website. In case if 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 D. P. Abhushan Limited represented by Mr. Anil Kataria, Whole Time Director and Mr. Vikas Kataria, Promoter. We will start the call with a brief overview of the Company and quarter gone past and then conduct a Q&A session.
With that said, I will now hand over the call to Mr. Anil Kataria. Over to you, sir.
Anil Kataria — Whole Time Director
Namaskar. Thank you, Siddesh. [Foreign Speech]. Vikas, please take it. [Phonetic]
Vikas Kataria — Promoter
Thank you, Anil bhai. Happy Dhanteras and happy Diwali to everyone. A warm welcome to everyone on the call. As Anil bhai mentioned, quarter two FY ’25 has been a transformative quarter for D. P. Abhushan, and I am excited to share some key development. The quarter successfully inaugurated a new showroom in Ajmer, Rajasthan. This is a 1,500 square feet plot across two floors. We have a retail outlet there to cater the growing demand for gold, diamond and silver jewelry in the region.
The Ajmer showroom marked a significant milestone in our expansion journey. Aligning with our strategy, we aim to expand our retail footprint across high potential emerging markets in Madhya Pradesh, Rajasthan, Chhattisgarh and Gujarat. We are targeting to increase our total store from eight in financial year ’25 to 20 by financial year ’28. Our current plan for financial year ’25 includes [Indecipherable] three more showrooms and I — we already opened one store in Ajmer. We remain well on track.
We are also focusing on enhancing our product mix, especially in the diamond studded jewelry category where we see a compelling opportunity to drive higher revenue and improving profitability. We aim to increase the revenue shares from diamond studded jewelry from 6% to 15% which will add to our high margin portfolio and cater to evolving customer preference. Additionally, we recently raised a small amount of capital by issuing INR5,73,070 preferential shares and warrants at INR1,182 per share to close associates. This fund will support our expansion plan and operational initiative.
Looking ahead, we are optimistic about the continued growth potential in the jewelry industry. Our expansion strategy focus on emerging markets and product diversification put us in an ideal position to capitalize on upcoming opportunities and delivery sustained growth.
With that said, I would like to now open the floor for questions and answers.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions] We have first questions from the line of Devanshu Bansal from Emkay Global. Please go ahead, sir.
Devanshu Bansal
Yes, sir, hi. [Foreign Speech] How are we sort of seeing the trend?
Anil Kataria
Namaste.
Devanshu Bansal
Yes, sir. Namaste, sir.
Anil Kataria
Vikas bhai, [Indecipherable]
Devanshu Bansal
[Foreign Speech]
Anil Kataria
[Foreign Speech]
Devanshu Bansal
[Foreign Speech]
Vikas Kataria
[Foreign Speech]
Devanshu Bansal
Right, sir. Typically, sir, [Foreign Speech]
Vikas Kataria
40-60 [Foreign Speech]
Devanshu Bansal
40-60 [Foreign Speech]. Okay. Second, sir, [Foreign Speech]
Vikas Kataria
Hello?
Devanshu Bansal
Yes, sir.
Vikas Kataria
Sorry, can you —
Devanshu Bansal
Yeah, I can repeat, sir. So in Q1 also, we did INR38 crore EBITDA. In Q4 also, we have done the same EBITDA, despite our top line doubling vis-a-vis Q1. So what is the reason for lower margin in Q2? Actually, based on whatever understanding we have, if our top line is doubling and apart from normal increase in EBITDA, there should have been some operating leverage also. So your EBITDA should have grown much faster. What is the reason for that?
Vikas Kataria
So I think [Foreign Speech]
Devanshu Bansal
[Foreign Speech]
Vikas Kataria
[Foreign Speech] Average PAT is like 3% to 5% we are having.
Devanshu Bansal
And EBITDA margin will be, on average basis, 5.5% to 7% in between?
Vikas Kataria
Average basis, it will like around, like the 7%.
Devanshu Bansal
Yes, 5% to 7%. Okay. Okay. Okay. Lastly, sir, [Foreign Speech], I wanted to understand our market share in key cities [Foreign Speech] Ratlam [Foreign Speech] almost we are doing like INR1,000 crore top line, right, through one store annually. [Foreign Speech] I guess, more or less, [Foreign Speech] is there any scope for further increase in your share in those markets?
Vikas Kataria
Yeah, so Ratlam, we are opening another store. [Foreign Speech] it is like somewhere around 25% to 30% we have a market share in Ratlam market.
Devanshu Bansal
And who all are other players in similar geography, Ratlam, Indore, Bhopal, etc., who is other big players? I guess Krishna is also there, right? So do they operate in same region?
Vikas Kataria
There are national players there and some local jewelers also there. So we have a competition with like the — also the — with the national player and local jewelers. So I’m talking about the Ratlam, so they are the Kataria Jewelers and local two, three jewelers are there. We are talking about Indore, so Malabar is there, Tanishq is there, and local jewelers, Punjab Jewelers, Anand Jewelers is there. So yeah, [Foreign Speech]
Devanshu Bansal
Okay, sir. [Foreign Speech] what kind of capital do you require both in terms of capex for that store as well as inventory which is required in the store. So [Foreign Speech]
Vikas Kataria
Capex is somewhere around like INR2.5 crore to INR3 crore [Foreign Speech] now we are looking the capex for to build a new store. [Foreign Speech]
Devanshu Bansal
Okay. [Foreign Speech] INR550 crore to INR600 crore [Foreign Speech], right, additional capex?
Vikas Kataria
[Foreign Speech] INR500 crore [Foreign Speech] we require.
Devanshu Bansal
Okay. [Foreign Speech] I heard you that you are — you have raised some capital, right? Can you throw some detail on that as in how much in the amount have been raised?
Operator
Sir, I would request you to rejoin the queue, so that management can address [Speech Overlap]
Devanshu Bansal
Sure, sure. Yes, yes. No issues, yes.
Operator
Okay, thank you, sir. We have next question from the line of Vikrant Kashyap from Asian Markets Securities. Please go ahead, sir.
Vikrant Kashyap
Sir, good afternoon and congrats on a very strong set of number. Sir, could you please provide the breakup of volume growth and price-led growth in the markets that you are operating?
Operator
Sir, your line is on talk mode. Please go ahead.
Vikrant Kashyap
So my first question is, how much is the price-led growth and how much is the volume growth for the last quarter? Am I audible?
Unidentified Speaker
Hello?
Vikrant Kashyap
Hello? Am I audible?
Unidentified Speaker
Hello? Hanji, sir.
Vikrant Kashyap
Hello?
Unidentified Speaker
Hello?
Operator
Sir, your lines are audible and clear. Please proceed with the question.
Vikrant Kashyap
Sir, just — so my first question is regarding the growth in the last quarter. So can you please break up in terms of volume growth and price-led growth.
Unidentified Speaker
Sir, so volume growth in last quarter in Q1 was around 1, 1.5 percentage, and else everything was the volume — I mean, the value growth was 1, 1.5 percentage, else everything was the volume growth.
Vikrant Kashyap
So the quarter two, you are talking about? The last quarter?
Unidentified Speaker
Quarter one, I am talking about. You are speaking about the Q2?
Vikrant Kashyap
Yes, yes, the last quarter just gone by.
Unidentified Speaker
Q2, mostly the margin is coming from the real business only and not from the price increase or anything. So that’s why our margins have declined because generally, in Q1, there is a profit booking happening. In Q2, we also increased our inventory levels to get — gear up for the festival as well as the wedding season and that’s why there is no much impact of inventory — I mean, price increase in the margins.
Vikrant Kashyap
Could you please share the volume growth for gold in tonnage or maybe in kgs?
Unidentified Speaker
Yeah, just a minute. Just a minute.
Vikrant Kashyap
Vis-a-vis last quarter.
Unidentified Speaker
Ankit [Phonetic] ji, do we have the figures readily available for the volume growth of gold?
Unidentified Speaker
Volume growth quarter-on-quarter or Y-o-Y?
Unidentified Speaker
Yeah, you just say of this quarter only, just Q2,how much was the total tonnage?
Unidentified Speaker
One minute.
Unidentified Speaker
Including all types of gold tonnage.
Unidentified Speaker
Including all, yeah, yeah. One minute.
Unidentified Speaker
Sir, we can proceed with the next question. I will just share this meanwhile in a minute.
Vikrant Kashyap
Yeah, the management also in their opening remarks alluded to focus more on studded jewelry. So in the environment where the traction for and demand for lab-grown diamonds are going up, how do you see the demand spanning about in your market that you are operating, maybe Rajasthan and other western regions? So how is the demand for studded and how you are competing with lab-grown diamond?
Vikas Kataria
So lab-grown diamonds is — now it’s like is there almost a fake diamonds because the lab-grown diamond price is reducing day-by-day. Every day, the lab-grown diamond prices are reducing. So people is not interested to buy lab-grown diamond and everybody is like interested to buying the natural diamond. So there is not certain change, look in terms of the lab-grown diamond and the natural diamond. So natural diamond demand is continuously growing where we are. So we are seeing the very good growth in natural diamond.
Vikrant Kashyap
So how much was the growth in last quarter?
Vikas Kataria
Over the last quarters, exactly, the growth in the natural diamond category we have like somewhere around 10%.
Vikrant Kashyap
Okay. So we are growing in the double-digit?
Vikas Kataria
Yeah, yeah.
Vikrant Kashyap
And how is the margin profile? How are we competing with other likes of Tanishq, Malabar and Kalyan in the market?
Vikas Kataria
So we have a standard practice. Our margin is a decent. So our margin is like a — not like a Malabar and Tanishq, but our margin is a decent margin in natural diamond category where we earn like the good, handsome [Phonetic] like the 20%.
Vikrant Kashyap
Sir, that’s what I am trying to understand. So in the blended gold margins are in the range of 10% to 12%. See, North and Central markets have the highest blended gross margin in the gold and also in the studded jewelry. Why our margins are relatively lower? Hello?
Unidentified Speaker
When you compare us with Malabar or Kalyan or Tanishq, the margins will be relatively lower because they are national brand, and we are an established regional brand. So our focus is very customer-centric. We have one to one relation with the customers, and we believe in growing up our sales in terms of volume and not in terms of margin. So yes. So if you compare the margins with other brands or something, our margins will be relatively lower in gold as well as the studded.
Vikrant Kashyap
At what scale would you like to increase your margins? So [Speech Overlap]
Unidentified Speaker
So we won’t be increasing our margins, but we want — going ahead, we are planning to increase the sale of studded jewelry, so the overall margins will increase. So if the gold jewelry is fetching us around 10% to 12% and the studded jewelry is fetching us around 18% to 20%, then increasing the share of studded jewelry will overall boost our margins, of the Company’s margin.
Vikrant Kashyap
Okay.
Unidentified Speaker
Yes. So currently, our 92% sales are gold jewelry, 6% to 7% sales is around studded jewelry and rest, 1% to 2%, is other platinum and silver jewelry. So our planning is to boost the gold jewelry sales. So wherever we are opening our stores as well as our existing stores, we are implementing the shop in shop model for the wedding customers. So their wedding customers, we give the different area, different hospitality, different touch for the jewelry and different designs are there, I mean, the enhanced designs are there. So there we charge a premium to the clients also, those who are coming specifically for the wedding purpose. And there, we focus more on the diamond studded jewelry, the big sets, and that helps us to get more making charges — that helps us to charge more making charges to the customers.
Vikrant Kashyap
Also, we can expect with the change in mix, our margins are likely to improve, not in [Speech Overlap]
Unidentified Speaker
Yes. Yes. So we are planning, like, our margins — our overall total sales in — total sales might be like — it will reach to like 6% to 12% of studded jewelry in the next three years.
Vikrant Kashyap
Okay, great. And just trying to understand the current festival flavors. So have you seen a strong demand for gold jewelry in your region in terms of volume or tonnage?
Unidentified Speaker
Yeah. So Ankit ji, can we have the tonnage figures? Yes.
Unidentified Speaker
Tonnage figures, current quarter [Foreign Speech] 1,335 kg and last year same quarter [Foreign Speech] at 56 kg [Foreign Speech]. Overall, [Foreign Speech] 36% growth.
Vikrant Kashyap
Okay. [Foreign Speech]
Unidentified Speaker
Festive season [Foreign Speech]
Unidentified Speaker
Festive start [Foreign Speech], sir.
Anil Kataria
[Foreign Speech]
Vikrant Kashyap
[Foreign Speech], sir. Thank you very much and wish you best of luck. [Foreign Speech]
Anil Kataria
Thank you. Thank you. [Foreign Speech] Thank you.
Vikrant Kashyap
Most welcome, sir.
Operator
Thank you so much, sir. We have next question from the line of Divya Daga from Vijit Global Securities. Please go ahead.
Divya Daga
Congratulations, sir, for such a great set of numbers. Your commitment towards building this Company, multifold, is clearly visible from your performance. Sir, I have just one question. [Foreign Speech]
Unidentified Speaker
Ma’am, [Foreign Speech] — yes, [Foreign Speech] So we have identified almost 20-plus locations. [Foreign Speech] whatever model is like, we do, I mean, a good survey of like three months before planning a store. Apart from that, we also do an exhibition before we plan the store. So in this current year, we are planning a store in Neemuch. So Neemuch [Foreign Speech] So in that exhibition, we did a sale of more than INR7 crore. So that — at that time, we thought it was a very good response. In Neemuch, we are getting — D. P. Abhushan is getting a very good response in Neemuch. So our survey is going on parallelly in like almost 10-plus locations. Out of those 10 locations, we will identify like three to four locations and finalize.
Divya Daga
Okay, sir. Thanks so much.
Unidentified Speaker
Yeah.
Operator
Thank you so much. [Operator Instructions] The next question is from the line of Devender Wadhwa from Value Prolific. Please go ahead, sir.
Devender Wadhwa
Hello, sir. Basically, my question is that you are adding more and more stores. So are you planning to add store in Tier 1 city?
Unidentified Speaker
Sorry?
Anil Kataria
As of now, our focus is to open a store in Tier 2 and Tier 3 cities. And basically, our focus is the particular state like MP, Rajasthan, Chhattisgarh, Gujarat. So we are more majorly focused on [Indecipherable] state. Now, we don’t have any plan to open a store in Tier 1 because we have a lot of opportunity to Tier 2 and Tier 3 cities. So first, our preference is to open a store there.
Devender Wadhwa
Okay. Okay, thank you so much, sir.
Unidentified Speaker
Yeah, thank you.
Operator
Thank you so much, sir. We have next question from the line of Devanshu Bansal from Emkay Global. Please go ahead.
Devanshu Bansal
Yes, sir. Hi. Thanks for the follow-up opportunity. I just wanted to sort of request you if you could just throw some light on the amount of capital raised and with whom this capital has been sort of raised.
Unidentified Speaker
So we have raised — we have done a small preferential and — preferential shares and warrants round. It was more like a friends and family round because there were some close connects which want to put in the money. So it was like almost INR70 crore of the capital which was raised at an issue price of INR1,182.
Devanshu Bansal
Okay. Okay.
Unidentified Speaker
And the same year, regarding the exchange filings also.
Devanshu Bansal
Okay. So this is not a recent thing? Is it like happened in Q2?
Unidentified Speaker
It is like three months before.
Devanshu Bansal
Three months before. Okay. Okay. And whatever next capital will be required for opening — for getting to those 20 stores, do you plan it to sort of happen with internal accruals or you think that there will be a need to further raise capital?
Unidentified Speaker
Yeah. So the Company is almost — generating like almost INR100 crores of free reserves every year — every — free cash flow every year. So opening three to four stores annually won’t be a problem if we even do a mix of like 20% of debt and 100% of equity — I mean, 80% of equity. So opening three to four won’t be a problem. It can go through internal accruals only. But we are in — I mean, we are just identified whether we can — that we will go for opening more stores every year. Then at that time, we will think of an option of raising equity again.
Devanshu Bansal
Understood. And any specific reasons, sir, because debt to equity typically is 1 is to 1 in the industry, almost like 1 time for almost all players. Any specific reason why we want to do the expansion more via equity and less via debt?
Unidentified Speaker
No, like this is almost like fourth generation into business and fifth generation has already started. The basic motto and aim before starting any store is like this store should go profitable within six months of opening only. Like our breakeven should reach within six months of the opening only. So there is a lot of homework which has been done before opening the store. And we don’t open the store haphazardly like other players like opening store each day or every week. So there is a lot of homework, lot of things which has been done before opening a store. Micromanagement is being done at the management level before opening any store. The store should anyhow go successful and there should be like no reason of closing the store after six months or eight months. So — no, I mean, it was [Speech Overlap]
Devanshu Bansal
Sir, my question is, typically gold jewelers get gold metal loan at very attractive rate, interest rate of about 2.5%, 3%. Why are we not sort of going for that? So why are we only expanding via our own capital, why are we not taking gold metal loans for that sake?
Unidentified Speaker
See, if we have to open like almost 10 stores every year, then we will obviously opt for the GML. But we follow like weighted average cost of method. So we have been building the inventory since last 70, 80 years. So we have in our store inventory valued at, for example, INR5,000 also and inventory valued at INR80,000 also. So our average cost of inventory in the books is always marginally very lower — I mean, almost 20% lower as compared to that of actual market price. So whenever we have to plan like more stores, and we require immediate gold, then we will go for GML, and rest it can be done through the internal accruals only. And in future, we are planning like — almost like 10%, 20% of our total inventory should come from GML.
Devanshu Bansal
How much, sorry, 20%?
Unidentified Speaker
10% to 20% in the initial phase.
Devanshu Bansal
10% to 20% in the [Speech Overlap]
Vikas Kataria
And we are open — if the GML is beneficial, then we are open to like [Indecipherable].
Unidentified Speaker
Yes.
Vikas Kataria
But as of now, I think the internal accrual is better.
Devanshu Bansal
Okay. And any hedging that we do apart from — on this INR600 crore, INR650 crore?
Vikas Kataria
Yeah, see, we do sometimes — we do sometime hedging. But as of now, our weighted average value is very much lower than the market value. So as of now, we don’t need to hedge. But yeah, whenever is required, we are — like do hedging.
Unidentified Speaker
We do this like natural hedging only. So whatever gold is sold on a particular day, it is purchased on the same day. So there is no impact of like, I mean, price fluctuation much on the books.
Devanshu Bansal
Understood, sir. Understood. Thanks for taking my questions.
Operator
Thank you very much. We have — [Operator Instructions]. We have next question from the line of Suguman Karjanan, who is an individual investor. Please go ahead.
Unidentified Participant
Yeah. So I have first question is regarding the sales in the Udaipur and Bhilwara stores, sir, which is less than 30%, when the other stores are doing more than 40 percentage. These two stores are doing like 21 percentage, 24 percentage. So can you throw some colors like what is the reason behind this? Because it opened — Udaipur opened in 2012, and then Bhilwara opened in 2020.
Unidentified Speaker
Vikas bhai, if you can –?
Operator
Sir, your line is on talk mode. Please go ahead.
Unidentified Participant
Yeah. So regarding — first question is regarding the Udaipur and Bhilwara showrooms. The sales percentage is 21 percentage, 24 percentage. So while other stores are doing more than 40 percentage, 50 percentage. These two stores are like being very less in revenue. So what is the reason behind it? Am I audible?
Operator
Sir, you are audible? Anil, sir, the line is on talk mode. Please go ahead. The line for management is on talk mode. Please go ahead.
Unidentified Participant
Yes. Anil, sir, can you please answer? Ankit ji?
Operator
Chetan [Phonetic], sir, your line is also on talk mode.
Unidentified Speaker
I mean, I need to have the data. Ankit ji, can you please answer?
Unidentified Speaker
Sir, will you please repeat question?
Unidentified Participant
Yes, sure. And so out of out of nine stores, like our Udaipur and Bhilwara stores are contributing revenue 21 percentage, 24 percentage, while rest other stores are contributing more than 30 percentage. So may I know the reason? Like since Udaipur is opened in 2012, Bhilwara opened in 2020, the sales like is this due to competition or is there any reason behind it?
Anil Kataria
[Foreign Speech]
Unidentified Participant
Okay. So my second question, sir, like we are hearing like the Diwali sales, the pent up demand is not up to the mark so far. But in our D. P. Abhushan case like the demand is penting up or do we expect some slowdown or sluggish in our sales during Diwali?
Anil Kataria
Can you repeat your question?
Unidentified Participant
Yeah. So my question is like, while we are hearing news about other reputed players like they are facing issues and sales during Diwali, like there is a sluggish demand for Diwali. So in D. P. Abhushan’s case, like the sales during Diwali is picking up or do we expect any sluggish in revenue?
Vikas Kataria
Hello? Hello? So we have an increasing demand in sales in every store. So in the Diwali time, D. P. Abhushan is doing very good at all our stores. We have increasing demand, we have increasing sales in terms of quantity and volume both.
Unidentified Participant
Thank you so much, sir. Yeah.
Unidentified Speaker
And one more thing I would like to add on this Udaipur and Bhilwara declining, I mean, growth. The only reason is that Bhilwara and Udaipur both are the wedding hubs. So major sales in Bhilwara and Udaipur comes in Q3 and Q4. So — because there more focus is on the wedding jewelry and not on the routine jewelry.
Unidentified Participant
Sure, sir. Thank you. Thank you so much.
Operator
Thank you very much. [Operator Instructions] We will take next question from the line of Pranav Jain from Singular Capital [Phonetic]. Please go ahead.
Unidentified Participant
Hi, sir. Thank you for the opportunity. My first question is on the store expansion. Sir, currently from eight stores, we plan to go to 20 stores. And in the investor presentation, you also mentioned about some obstacles [Phonetic]. So if you can just elaborate on what our plans are to the franchisee network.
Unidentified Speaker
Plans at franchisee level?
Unidentified Participant
Yes, sir. In your investor presentation on page 11, you mentioned that you are now focusing on expansion of the stores franchise model. So is that [Speech Overlap]
Unidentified Speaker
So we have already rolled out one franchisee model. We have hired one franchisee agency also, which is working very widely for all the jewelers in the industry. And for few months, we also gave an advertisement in the newspaper for receiving the inquiries for the franchisee and we have received almost 40-plus inquiries for the same. So we have been, like, getting many calls from investors as well as people that they want to take the franchisee of D. P. Abhushan. It is still in the thought process. But yes, going ahead, we will be implementing this franchisee model. And it will be a FOCO model, franchisee owned company operated-model.
Unidentified Participant
Okay, sir. So of the 20 stores that [Speech Overlap]
Unidentified Speaker
These all 20 stores will be the owned stores only. So any franchisee stores coming, it will be over and above these stores.
Unidentified Participant
Understood, sir. Second question is on the [Indecipherable] correct me if I’ve got the question — the number wrong. But I think earlier in the call, you mentioned that there is a 10% growth in diamond. And if we compare that to our overall top line growth, does that imply a decrease in our studded ratio?
Unidentified Speaker
We need to check with the data. We don’t have that readily available. But yes, we can talk about this separately.
Unidentified Participant
Sure, sir. That’s all from me. Thank you, sir.
Unidentified Speaker
Thank you.
Operator
Thank you so much. We have next question from the line of Devender Wadhwa from Value Prolific. Please go ahead.
Devender Wadhwa
Sir, I missed where you are explaining the reason behind the fall in EBITDA margin despite the strong revenue growth. Can you explain why EBITDA margins, quarter-on-quarter, fall from 7.6% to 3.8% despite you have shown a very strong growth in revenue?
Unidentified Speaker
In our Q1 call also, we have told that our margins, PAT margins will be between 3% to 5% and our EBITDA margin will be around 6, 7 percentage on the yearly basis. Q1 is generally a profit booking year. I mean, like, there is some — I mean, some margin which has been impacting because of the price increase also in Q1. And that why the Q1 margins were relatively high. If you can take like almost 1, 1.5% of EBITDA margin was coming because of the price increase in gold jewelry, our inventory levels. So it was a reason. But yes, our like on average basis, if you see, then our PAT margins will be around 6 to 7 percentage and our PAT margin will be around 3 to 5 percentage on the yearly basis.
Devender Wadhwa
Okay, sir, got it.
Unidentified Speaker
So it is not a fall — that I would like to say, it is not a fall in the EBITDA margin, it is the actual EBITDA margin. I mean, Q1 was an exceptional due to the increase in gold prices.
Devender Wadhwa
Okay, sir. Thank you.
Unidentified Speaker
Yes.
Operator
Thank you very much. Ladies and gentlemen, we will take that as our last question for the day. I now hand the conference over to management for closing comments. Over to you, sir.
Unidentified Speaker
Closing comments. Anil, sir?
Anil Kataria
Thank you [Foreign Speech] Thank you. Thank you so much.
Operator
[Operator Closing Remarks]
Anil Kataria
Thank you. Thank you so much.
Unidentified Speaker
Thank you.