Kalyan Jewellers India Limited (NSE: KALYANKJIL) Q3 2025 Earnings Call dated Jan. 30, 2025
Corporate Participants:
Rahul Agarwal — Associate Director – Investor Relations, Strategic Growth Advisors Pvt. Ltd.
Ramesh Kalyanaraman — Executive Director
Sanjay Raghuraman — Chief Executive Officer
Analysts:
Gaurav Jogani — Analyst
Pulkit Singhal — Analyst
Ashish Kanodia — Analyst
Manoj Menon — Analyst
Soham Samanta — Analyst
Devanshu Bansal — Analyst
Prolin Nandu — Analyst
Presentation:
Operator
Ladies and gentlemen, you had been connected to India Limited Conference Call. Call will begin shortly. Please stay connected. Ladies and gentlemen, you had been connected to India Limited Conference Call. Call will begin shortly. Please stay connected ladies and gentlemen, good day, and welcome to the Kalyan Shwellers India Limited Q3 FY ’24 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 assistant during the conference call, please signal an operator by pressing star 10 on a touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr Rahul Agarwal from Strategic Growth Advisors. Thank you, and over to you, sir.
Rahul Agarwal — Associate Director – Investor Relations, Strategic Growth Advisors Pvt. Ltd.
Thank you. Good evening, everyone, and thank you for joining us on Kalyan Dwellers India Limited Q3 and Nine-Month FY ’25 earnings conference call. We have with us Mr Amish Kalyan Raman, Executive Director; Mr Sanjay, CEO; Mr, CFO; Mr Sanjay, Head of Strategy and Corporate Affairs; and Mr Abram George, Head of Investor Relations and Treasury. I hope everyone got an opportunity to go through our financial results and investor presentation uploaded on the company’s website and stock exchanges. We will begin the call with opening remarks from management, following which we will have the forum open for question-and-answer session. Before we start, I would like to point out that some statements made in today’s call may be forward-looking in nature and a disclaimer to this effect has been included in the earnings presentation shared with you earlier. I would now like to invite Mr Amesh Raman, Executive Director of Kalyan Dwellers India Limited to give his opening remarks. Thank you, and over to you, sir.
Ramesh Kalyanaraman — Executive Director
Thank you. Good evening, all of you. Welcome everyone to the call. It has been an excellent year so-far with consolidated revenue growth of approximately 35% and standalone revenue of approximately 37% for the first-nine months of the financial year. SSG is again very strong. Q1 recorded at 12%. Q2 was at 23%, partially driven by the import duty cut. Q3 was at 24%. Q3 SSG has been driven largely by the robust festive and wedding demand and lesser number of also played a part. Revenue growth for the recently concluded quarter has been 40% on a consol basis and 42% in India. Growth has been broad-based with robust growth across gold and categories adjusting for the loss due to reduction of import duty, growth in PBT is around 53% on a standalone basis and 46% on a consol basis as we indicated earlier, for FY 2026, we have drawn up plans to launch 170 Kalyan — 170 showrooms across Kalyan and Candy formats, 90 Kalyan and 80 Kendyan. We have completed signing of LOIs for showrooms to be opened during the first-half of FY 2026. Talking about the current quarter, the quarter has started-off well despite the volatility in gold prices. We are upbeat about the ongoing wedding season and expect to-end the financial year-on a strong note. We are on-track for the launch of 30 Kalyan showrooms and 15 showrooms in India during the current quarter. Over to you.
Sanjay Raghuraman — Chief Executive Officer
Thank you, Ramesh. Good evening, everybody. We just completed a fantastic quarter and I’m happy to share some information about our numbers. We reported a consolidated revenue for the quarter of INR7,287 crores, a 40% growth over the same-period in the previous year. Consolidated profit-after-tax came in at INR219 crores versus INR180 crores during the same-period in the previous year. Adjusting for the loss due to the customs duty cut, consolidated profit growth would be about 43%. Now I shall give you a breakup of the financial numbers between India and the Middle-East, starting with India. India revenue came in at INR6,393 crores, a growth of 42% when compared with the corresponding period of the previous financial year. And India profit-after-tax came in at INR218 crores compared to INR168 crores in the corresponding quarter of the previous financial year, a growth of 30%. Again, adjusting for the loss due to the customs duty cut, profit-after-tax growth would be 54%. Talking now about our Middle-East business, revenue for the quarter came in at about INR840 crores or 23% growth compared to the corresponding quarter in the previous year. The Middle-East business posted a profit of INR15 crores for the quarter compared to INR14 crores for the corresponding quarter in the previous year profit grew by 23% over the corresponding quarter of the previous year. However, PAT growth for the current Q3 FY ’25 was impacted due to the introduction of a corporate tax in the UE. This is the first-quarter after corporate tax comes in. During the quarter, we opened 45 showrooms in India across Kalyan and Candere platforms and we opened our first showroom in the US. With this, we are done with a summary of the financials and now open the floor for questions. Thank you.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer section. Anyone who wishes to ask a question may press char and one on the touchtone telephone. If you wish to remove yourself from question queue, you may test R and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles the first question is from the line of Gaurav from JM Financial. Please go-ahead.
Gaurav Jogani
Hi, thank you for taking my question. Sir, my first question is with regards to the demand conditions that has been — that you have witnessed in Q4, especially with five month ahead now in the quarter and also with the recent surge in gold prices, has that had any impact on the demand per se?
Ramesh Kalyanaraman
The demand is strong catted off very well and wetting demand is very strong the last one-week there is some turbulence in the gold rate, gold prices but even then demand per se it is still strong.
Gaurav Jogani
Okay. And sir, we have been seeing that for you, at least the studded growth has been quite good and in fact, you are seeing increase in the studded share. So just wanted to know from a lab growth diamonds perspective, if you are seeing any impact and you know, if you can give some color on what kind of studied jewelry you have, which kind of is not so much of impacted by this give the lab-grow diamond.
Ramesh Kalyanaraman
So as mentioned earlier, lab-grown diamonds basically comes in the solitaire space. And if you look at as a brand, we don’t focus too much on solitaire. And if you look at our revenue base, maybe 5%, 6% of the total diamond revenue will be solitaire. Approximately 3% of our shattered will be solitaire. Maybe 1% of our total revenue will be solitaire, okay. So the impact on a certain segment of solitaire, wherein above a specific one carat range is where the lab-grown diamond has at least some demand, okay. And if you look at our total, demand was even lower. So we don’t have any impact on category.
Gaurav Jogani
Okay, okay, sure. Sure. And sir, my last question is with regards to different. You know, have you seen any impact on the addition of the franchise partners or any change in the store addition guidance not only for this quarter, but of the future year the next one year as well. Anything on that front?
Ramesh Kalyanaraman
No, there is no change at all. I told you we have already signed all LOI for the first-half of the next financial year. This quarter also we are adding and there is no change per se for a franchisee momentum at all.
Gaurav Jogani
Okay, so thank you. That’s all from me.
Operator
Thank you. A reminder to all participants, you may please start in one to ask questions. The next question is from the line of Pulkit Signal from Delmus Capital Management. Please go-ahead.
Pulkit Singhal
Thank you for the opportunity and congrats on a good set of numbers. So basis the adjusted profit growth that you have given, my understanding is that the PBT margin this time is around 5.43% versus previous year 5.01%, which suggests almost a 40 basis — 42 basis-points EBIT margin expansion. Is that calculation roughly correct? I mean 40 basis-points plus
Ramesh Kalyanaraman
Yeah. So basically, yes, the PBT margins have gone up by around 0.4% and it is predominantly because of the ad spends. As I had mentioned earlier, Diwali this time was early Q3 and our campaigns had started in Q2 itself. So you would have seen some ad spends higher in Q2, which has been lower in Q3. So that is why your Q3 majorly employee expenses and ad spends are where we have a gained in the PBT margin.
Pulkit Singhal
Right. So one should look at maybe Q2 and Q3 together to kind of
Ramesh Kalyanaraman
Better than the
Pulkit Singhal
Better way to look at it. Either ways, it would be easily a 20 basis-points odd average impact maybe. But my point is directionally now are you confident of this kind of margin expansion or do you think there is certain one-offs here and you don’t anticipate that
Ramesh Kalyanaraman
The leverage in employee expenses because that also I had mentioned earlier, wherein our base is getting higher. So the new staff which we are taking for the stores which are going to open, the quotient when compared to the base, we have — we can — because already the base is high now. So you can see leverage in employee expenses and margin leverage in ad also can be expected. So maybe this levels can be expected for the next year and we also have savings of interest, right, for the next year because we are reducing our debt.
Pulkit Singhal
Yes, yes. Okay. And okay, so that’s great. Secondly, I mean, are you seeing any increase in gold lease costs or expected increase in gold lease cost? I mean because of some kind of expectation of tariffs in the US
Ramesh Kalyanaraman
Very stable?
Pulkit Singhal
It’s stable.
Ramesh Kalyanaraman
Yeah.
Pulkit Singhal
Understood. So there is no such expectation as well for the banks.
Ramesh Kalyanaraman
Expectation means meaning as of now it’s very stable
Pulkit Singhal
Understood. So for whatever reasons if it were to increase, because there’s an article which talks about how US might increase tariffs on gold import, which in-turn will lead to lease cost increase. Either way if that were to happen, you would pass it on to the customers or how does it work? Do you have avenues of kind of managing that cost?
Ramesh Kalyanaraman
No. So interest rates cannot be passed into the customer, let it — meaning as of now, we are — we cannot speculate on that now because nothing has come out.
Pulkit Singhal
Sure. All right, great. Thank you and all the best.
Ramesh Kalyanaraman
Yeah. Thank you. Thank you.
Operator
Thank you. The next question is from the line of Ashish Kanodia from Citigroup. Please go-ahead.
Ashish Kanodia
Yeah. Thank you for the opportunity. So the first question was on the store-level gross margins. If you can, you know, give some color how the store-level gross margins have trended this quarter
Ramesh Kalyanaraman
And the gross margins have been almost stable. So pretty much the same as maybe the last few quarters?
Ashish Kanodia
Sure, Hamas. And the second question was in terms of the custom duty impact, is it fair to assume that you know, all the custom duty cut laid impact is already captured in 2Q and 3Q and there shouldn’t be any more impact going-forward or
Ramesh Kalyanaraman
Yeah, there is no more impact. So 120 — meaning 120-odd, everything is over now.
Ashish Kanodia
Got it. And third one, just on the diamond and studded side. So on the diamond prices, right, especially I’m just talking about the smaller stones, one on the sourcing side, have you seen any price correction, etc., say, in the last few months? And the second thing is also like on the — the consumer-facing side, how are the prices trending, especially when you look at whether your own pricing or for other players? Has there been any reduction in diamond prices in this — on the smaller stone side?
Ramesh Kalyanaraman
Yes. So basically, I told you again the solitaire is the area where the price correction majorly happens, okay. So here, if you look at, out-of-the solitaire inventory and revenue, almost 85% to 90% is below $0.50. There price correction is not significant. So price correction is significant in $0.50 plus category, which is maybe 10% of our total revenue and 10% of our total inventory also.
Ashish Kanodia
Sure, got it. And maybe just last bit of a question more on that data and GML side, if you can help us with what was the borrowing and GML for the — for 3Q? And secondly, in terms of you know, land sale, et-cetera, if you have any more visibility, please? Thank you?
Ramesh Kalyanaraman
Yeah. So no major change in the what you call GML debt level, etc for Q3 and regarding — regarding — and we have not repaid any further debt also in Q3. So there is no major change in that area. And what was the next question?
Ashish Kanodia
Are the land sell, any further update in terms of timeline, et-cetera?
Ramesh Kalyanaraman
Or so collateral release, we have two steps towards it, okay. The first step is to, of course reduce the debt and then we go to the banks and say that we need only this much limits, okay. So that has been done with which now we — meaning if you look at it over the past 18 months, we would have reduced approximately INR450 crores of debt in India, right? And we will again further reduce around INR150 crore during this quarter. So we have been in discussions with the banks for the release of collaterals. As I mentioned, there are two steps in the process. First is to reduce the ABF limit, okay. We had sent the proposal for the reduction of ABF and banks are already given, the collateral given is more than required. So that is the second step wherein we ask for the collateral bank. So maybe three, four months for the — for the entire process wherein we might we might get a clarity on the asset release is what we estimate now.
Ashish Kanodia
Sure. That’s helpful. Thank you.
Ramesh Kalyanaraman
Yeah.
Operator
Thank you. A reminder to all participants, you may please start and one to ask questions. The next question is from the line of Manoj from ICIC Securities. Please go-ahead.
Manoj Menon
Hi, team, a couple of clarifications from my side. One, double-clicking on what Polkit asked little earlier, you know, on the PBT margin part of it, let’s say, looking into FY ’26 and beyond, is it fair to, let’s say, make a statement of hypothesis that given that you have been, let’s say, in a hyper expansion mode in the FOCO route over the last, I would say, 18 to 24 months and also that most of it has come into base, those should have ramped-up as per your plan, etc. Is it fair to make a statement that, let’s say, going into FY ’26 and beyond, let’s say PBT growth will be ahead of the revenue growth?
Ramesh Kalyanaraman
Yeah, it should. No, that is what we plan to. Yes. So PBT margin should be higher than revenue growth.
Manoj Menon
Understood. And I recall per the comment as of the last quarter going into FY ’26, so there is no change in the expansion plans, right? I mean, let’s say, 90 stores for FY ’26, et-cetera, is absolutely intact.
Ramesh Kalyanaraman
So everything intact. And again, repeat, H1 expansion already signed.
Manoj Menon
H1 FY ’26.
Ramesh Kalyanaraman
Yeah.
Manoj Menon
Okay, understood. Secondly on the revenue once again, let’s say, if you could call-out if there is any regional variations in growth, let’s say, South in the other three parts.
Ramesh Kalyanaraman
South, yeah. So this time, if you look at SSG, SSG would have been a bit more heavier, what you call South will be in the range of what 23 and non-South may be in the range of 25%.
Manoj Menon
So that’s statistically insignificant, right? It’s largely similar is what you’re actually saying, which is actually slightly different from the trajectory what we have seen in the past.
Ramesh Kalyanaraman
So yeah, if you look at 1% or 2% is same, meaning it was almost opposite in Q2. It was ’25 and ’23, if I remember right. So that much change is only there. There is no major change in SSG levels.
Manoj Menon
So the reason was because historically speaking, maybe nearbank or so, there was a market context which was called out by your peers in otherwise also unlisted companies also have heard that let’s say the South market has seen significantly higher competitive activity leading into competitive intensity. Is that largely behind us or is still life as usual?
Ramesh Kalyanaraman
It’s a competitive intensity. As I mentioned earlier, we have always faced competition because we are a hyper-local player. We have to compete with local players, regional players, national players. So it has been a part of our life since inception. So there, we have not seen anything major in changing in the last two, three years except that campaign levels in a local market, they are also active today, okay. And that — that has really changed. So we are forced to spend some more money than expected in a franchisee store, which we launch or in a Tire three, Tier-4 city in South or non-South. That has really changed because of the digital media coming in-place, they are also able to spend money and compete a national brand in that local market. That is different from before? Otherwise, everything remains the same.
Manoj Menon
Understood. And lastly, in one of the disclosures, I noted that there is a reappointment of the Pinker’s nominee now for the next three years. But how do — how do we understand this now that as I understand doesn’t hold any share, let’s taken the company as one big.
Ramesh Kalyanaraman
We have reappointed Mr Anish Saraf. We are happy that he accepted and he is a non-executed director and we have appointed him for three years. We know that I has been reappointed as a chairman. Salil and Anil, they also play an important role. They have also been reappointed. So we have enjoyed the journey so-far till all of them and we believe that they are also a part in our success. So we still look-forward again to work with them in the next phase of expansion.
Manoj Menon
Thank you. Thank you, Ramesh. All the best for the work.
Ramesh Kalyanaraman
Thank you.
Operator
Thank you. A reminder to all participants, you may please chart in one to ask questions. The next question is from the line of Soham from Central Broking. Please go-ahead.
Soham Samanta
Hello. I’m audible?
Ramesh Kalyanaraman
Yeah. I can hear you.
Soham Samanta
Yeah. Yeah. Thank you for the opportunity, sir. So just wanted to check couple of things. But like as the gold price has been surged almost for last quarter also more than 30%. So how do you look in the demand-side, like as consumer prefer lower-right now, I mean, is it anything trend we’re observing?
Ramesh Kalyanaraman
Yeah. So if you look at from Q3 to now, yes, the price has been almost 5%, 7%, there has — it has been increased by around 5% to 7% now. Okay. So now the customers are also aware of all these which has become a habit for them also. It is a — it is almost like a habit for them, gold prices are going up. So when the coal price goes up, in the couple of days or meaning three to five days, people might take a pause and look at the direction where the gold price is going and they might prepawn or postpone their purchase. But wedding — wedding revenue cannot wait for more than a week. So they immediately come up — come in maybe after four, five days. So nothing major has impacted as we speak at the stores. Demand per se very strong. It is still continuing and new customer growth and existing customer growth is intact.
Soham Samanta
But in case of non-bidding, how visit is it?
Ramesh Kalyanaraman
People can postpone more than a week, okay. But if you look at as we speak the first 30 days January, the revenue, the footfall, wedding demand, non-wedding demand, everything is almost in-place and customers — customers are also getting used to all these. And now we have 18 carat also at the store, 14 carat is also selling for diamond jewelry. So prices not impacting non-wedding too much like before.
Soham Samanta
Okay. Got it. So now my second question is, as of now, if I looked our model, basically Coco is still 60%, Coco is 40% on a basis. And as we do more, more FOCO, so it would be around 50-50% or 55% 45 by FY ’27. So in that case, is it fair to assume that on an EBITDA margin basis, it could have the impact of 100, 110 bps kind of impact for till FY ’27 for next two years?
Ramesh Kalyanaraman
Okay. So there will be an impact for EBITDA margin. EBITDA margin will be keeping on degrowing and PBT for — meaning the EBITDA margin for franchisee store. Number of franchisee stores, yes, you are right, EBITDA margins will be keeping on degrowing, but PBT margins are growing, operating leverage is again stepping in, interest rates are also because we are repaying the interest debt, so interest can also come down. And PBT of franchisee stores are more than our own store. So EBITDA margins will keep degrowing except that you can see a situation where we will start reopening our Coco, right, because once the debt repayment is done, then the excess cash can be used for Coco. So there from there, you will start to see EBITDA margins grow.
Soham Samanta
Got it. And sir, the last question from Candere. Right now, what is the stage like what is the — how do you look for this news? Because most of the stores we are opening is majorly Coco for Candere. So how do you look for next couple of years, the journey maybe profitability and all if you can share something?
Ramesh Kalyanaraman
No,, we are looking into the next phase of expansion and we are adding stores. Again, Q4 also, we are going to add 15 more. Next year, we are adding stores in Candere, okay. And we will start our campaigns. We will focus on footfalls, we will focus on making the store EBITDA-positive in the next financial year. And in the next two, three years, revenue — take revenue to INR1,000 crore. That is our target for.
Soham Samanta
Okay. Got it. Got it. Thank you very much, sir.
Ramesh Kalyanaraman
Thank you.
Operator
Thank you. The next question is from the line of Devanshu from Emkay Global. Please go-ahead.
Devanshu Bansal
Hi, sir, congratulations on a very strong performance in Q3. Just one question from my end. I just wanted to sort of check on making chart. So few anecdote checks sort of indicated that we have taken some increase in our making charges. So wanted to confirm if this is true as a strategy
Ramesh Kalyanaraman
So what are you asking? Did we increase our making charges? Are you trying to ask for that?
Devanshu Bansal
Yeah. Yes, sir.
Ramesh Kalyanaraman
And no. So making charge, what we do, we constantly — it is again the making charge of a product, a brand only cannot decide. The market also has to decide the making charge of a particular product. So when we enter into a new market, we will have certain staple products where making charges have to be competitive with the local player there. They will not be able to play around too much with the making charge for a staple product. We will take products which is non-staple in that particular market. We will enjoy some premium for a period of time for these products. Slowly, those products will be introduced by some local players. So the margins comes down there. So we have to replace that product with some other product where we can again have a premium on making charges. So tactical changes, tactical campaigns, working around the making charge, it is a constant process. So if you ask me, have you increased making charge for a particular product, I will be able to tell yes and no, wherein it’s not a — it cannot be a direct answer.
Devanshu Bansal
Okay, understood. So just to confirm as in from a difference between the leader or maybe the other listed player and so has that reduced increase remained stable so across the portfolio. So just if you could share some thoughts there in terms of making charge?
Ramesh Kalyanaraman
So making charges, I told you for staple products are making charge, we compete that with regional players and local players. For non-staple products, the making charges will be very similar to national players.
Devanshu Bansal
Understood, sir. Thanks. That’s it from my end. Thanks for taking the question.
Operator
Thank you. A reminder to all participants, you may press star in one to ask questions. The next question is from the line of Proline Nandu from Idulus Public Alternative. Please go-ahead.
Prolin Nandu
Yeah. Hi, Ramesh and team. Thank you for giving me this opportunity. A few questions from my side. Just to pick-up from where you left in terms of the EBITDA margin, right, when it will start growing. So the larger question as to this focus on our own stores, you said once the debt is repaid, at that time you will again come back to the Coco kind of model. Is it still that your focus on Coco will start sometime in FY ’27. Is that understanding correct? Or and from there on the percentage of Coco should see an increase in the overall store that we add every year?
Ramesh Kalyanaraman
Yeah, yeah. So that’s a fair assumption. Looking at the debt repayment, I think from ’27, we should start doing Coco as well. So if you look at the 50% revenue-share between, Coco, the EBITDA will be in the range of 6.5%.
Prolin Nandu
And that ideally going ahead that revenue-share should be in favor of Coco, right, once the debt repayment happens, is that also fair to think about?
Ramesh Kalyanaraman
There I think because even if we — if the or phase is over, okay, the number of — the market is so huge, wherein you can open about 90, 100 showrooms a year, franchisee demand is still in-place, huge demand from franchisee partners. Markets are also opening — every year new markets are getting open, right? So we cannot cap our expansion with the cash we have. So we will only look at expansion wherein our expansions will be feeded either by franchisee partners or by our own capital. So even if in 2027 plus, wherein we will — we might not be able to open as many as showrooms Coco when compared to FOCO
Prolin Nandu
Yeah, understood, right.
Ramesh Kalyanaraman
So that you want to do with you. But you will see a margin growth from 2027 in terms of EBITDA because we will start opening Coco shows.
Prolin Nandu
I get your point. Yeah, yeah.
Ramesh Kalyanaraman
EBITDA from the new Coco will be in double-digits, right?
Prolin Nandu
Right. So no, sir, the larger question that I wanted to understand was, are there some market where opening a Coco store is very, very difficult, right, in terms of operations or so on and so forth as to how do we run the store for safety purpose or understanding the competitive intensity. Is that how you see the market or it would be more of the question of demand for stores coming from a region and we are focusing on that. So how will you decide? I understand there is a lot of demand, new market opening, but are there some markets where Coco cannot operate only can operate?
Ramesh Kalyanaraman
So here FOCO and Coco. Operations point-of-view, there is nothing which can change because we — the Foco franchisee partners are only sleeping partners where they are like investors. They don’t come to the store, they don’t there is no difference between a Foco, Coco in terms of operation per se, that is not the reason. But once we have excess cash with us, we will have to use it somewhere wherein we will start opening our are coco. So maybe a very large showroom in a metro market, okay, might do a cocoa. Such showrooms are ideal case for a cocoa.
Prolin Nandu
I get your point, right. So as you said, right, your franchisee partners are investors, right, and investors go through their own pain, right? Some of the equity investors are also going through their own pain. So do we do some kind of stress-test to understand what is the leverage of, let’s say, our franchisee partner because their health will determine how we do going-forward, right? So do we do some kind of, you know periodic stress-test on them and also to think from a perspective of there could be years where gold price could see a decline, right, which could impact our returns as well as the franchisee partner returns. So how do we think about or how do we predict or how do we, you know a model for their behavioral change when, let’s say, gold prices would hypothetically see a decline in a year, right? Would they behave in that scenario? Because that they are knowing as to what they will do is quite important for us. So any thoughts on how you think from a business perspective on these assets?
Ramesh Kalyanaraman
Yeah. So again, two, three questions you have asked. One is the check which we have on a franchisee capability, right? But we have a policy to restrict the number of showrooms per franchise. Also, we do check the financial capacity of a franchisee before onboarding them. And if they are able to open, say, five showrooms, we give them two. And that is how — so our intention also for the next couple of years is not only to open many showrooms, it is to expand the base of the number of franchisee partners so that maybe from 2027, we can only open new stores through our existing franchisee partners. So that is our intention more than simply opening stores with our existing franchisee partners. And to your gold price decline, I mean, it is a daily refilling inventory system which we have. So if they sell 100 grams today, 100 grams will be refilled from our head office and we invoice them and they pay them. So even if price goes up or comes down, they will have to maintain the volume at the store-level. And these investors are not like investors who see six months, nine months. They are all long-term three to five-year period. So they don’t only look at the gold price one year, two year. It’s a five-year, six-year call which they take, right? And they are all H&Is who already have gold as an asset class with them, which is now getting giving them return.
Prolin Nandu
I understand, Ramesh. Thank you so much. Just one last question, right. So if we leave aside let the impact on margin of this Coco and Coco, right, but as we grow, our brand becomes more-and-more visible, right, how should one think about operating leverage from, let’s say, a employee cost point-of-view, A&P point-of-view and also from the point-of-view of how much — at what rate do we get gold metal loans, how much do we pay to our vendors for some of the outsourcing work that we do right for the — for the metal piece itself, right? So how should one think about all these benefits coming in as the brand becomes a lot more apparent across India, right? What are your thoughts on that,?
Ramesh Kalyanaraman
No. So operating leverage, you are right. We should expect meaningful operating leverage going-forward if the SSGs keep growing at the rate we see now, okay. But of course, SSGs you may — it’s unheard SSGs which we are seeing for the past many quarters now. But if the SSGs keep growing at the rate which we see now, we should see meaningful operating leverage going-forward, okay. And add corporate overheads, as you rightly pointed out, we are repaying debt also, so interest-rate is also coming down. So there everywhere you will be able to see operating leverage. But if you look at our what we call our — the craftsmen who do jewelry for us, most of the craftsmen are suppliers, vendors are like family for us, okay, wherein they are with us right from our first showroom, second showroom. They are all-in and around our place mostly here or wherever we open store, we would have what we call created that so-called ecosystem. So we don’t squeeze them too much to earn a 0.25.3, 5.15 margin. It is more for us — for them to stay-in the business to make money to bring their younger generation also into this business because we need them for our growth. It is not about saving 0.1%, 0.2% from them. That’s not the intention which we have.
Prolin Nandu
Understood, Ramesh. That’s it from my side. Thanks a lot and all the very well.
Operator
Thank you. A reminder to all participants, you may press and one to ask question as there are no further questions from the participants, I now hand the conference over to the management for closing comments. Over to you, sir.
Ramesh Kalyanaraman
Hi, I would like to thank all of you. We will meet again very shortly. Thank you very much.
Operator
Thank you.
Ramesh Kalyanaraman
Thank you all stood with us on our tough times. Thank you very much.
Operator
Thank you. Thank you. On behalf of India Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you.