Khazanchi Jewellers Ltd (BSE: 543953) Q3 2026 Earnings Call dated Feb. 18, 2026
Corporate Participants:
Harshil Ghanshyani — Analyst
Rajesh Mehta — Chairman and Joint Managing Director
Vikas Mehta — Chief Financial Officer.
Analysts:
Unidentified Participant
Mahesh Seth — Analyst
Priya Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Q3 and Nine Month FY 2026 Results Conference Call of Khazanchi Jewellers Limited, hosted by Kirin Advisors Private Limited. [Operator Instructions]
I now hand the conference over to Mr. Harshil Ghanshyani from Kirin Advisors Private Limited. Thank you, and over to you, sir.
Harshil Ghanshyani — Analyst
Yes, thank you. On behalf of Kirin Advisor, I welcome you on the conference call of Khazanchi Jewellers Limited for Q3 and nine months FY 2026. From the management team, we have Mr. Rajesh Mehta, Chairman and Joint Managing Director. We have Mr. Vikas Mehta, Chief Financial Officer.
Now I hand over the call to Mr. Rajesh Mehta. Over to you, sir.
Rajesh Mehta — Chairman and Joint Managing Director
Hello, everyone. Rajesh Mehta, Chairman and Joint Managing Director of Khazanchi Jewellers. It’s our pleasure to welcome you as we discuss our performance for Q3 and the first nine months of FY 2026. Q3 FY 2026 marks another milestone quarter for the company, characterized by strong revenue traction, margin expansion, and disciplined execution. The quarter benefits from sustained festival movement and improved product mix and healthy demand across both wholesale and retail channel. Our diversified model once again demonstrate resilience, and operating leverage, enabling us to deliver robust growth, while maintaining tight control over cost and our inventory cycle.
On the B2B front, we continued to expand our partner ecosystem and deepened relationship with jewelry houses, wholesalers, and organized retail chains across India. Our ability to execute large volume orders with precision timely delivery and design differentiation remains a key competitive strength in the wholesale gold segment. Our B2C business also delivered encouraging traction during the quarter, supported by festival demand and improved realization. I am pleased to share that our new 10,000 sq ft large format showroom in Chennai was successfully inaugurated on 7th of Feb. In the first 10 days since its opening, we are — we recorded a sale of approximately INR20 crores. This strategic addition significantly strengthened our retail footprint, enhanced the customer experience, and positioned us strongly in the premium jewelry segment. This new flagship showroom will play a pivot role in driving higher retail contribution and margin expansion going forward.
Our expansion into the natural diamond category under our premium brand Vajra by Khazanchi continues to gain momentum. The positive response at trade exhibitions and subsequent orders inflows validate our strategic move into higher value categories which are expected to meaningfully support profitability and brand premiumization over the medium term. Looking ahead, we have a clear strategic vision. Over the next two, three years, we aim to increase our retail contribution from 10% to 25%. We plan to achieve this by expanding our product portfolio, onboarding new brands, and further strengthening our retail presence. As our retail mix improves, it will naturally enhance our margin profile, drive strong profitability, and create greater operating leverages in the years ahead.
Let me now briefly walk you through our financial performance. Nine month FY 2026 financial highlights are as, total revenue of INR1,542.02 crores, year-on-year growth of 34.04%. EBITDA of INR89.12 crores, year-on-year growth of 96.91%. EBITDA margin of 5.78%, year-on-year expansion of 185 basic point. PAT of INR63.82 crores, year-on-year growth of 96.92%. PAT margin of 4.14%, year-on-year expansion of 132 basic point. EPS of INR25.76, year-on-year growth of 96.64%.
Now I will give you the results of Q3 FY 2026. The financial highlights are, total revenue of INR589.26 crore, year-on-year growth of 49.6%. EBITDA of INR35.34 crore, year-on-year growth of 114.51%. EBITDA margins of 6%, year-on-year expansion of 181 basic point. PAT of INR25.13 crore, year-on-year growth of 103.02%. PAT margins of 4.26%, year-on-year expansion of 112 basic points. EPS of INR10.12, year-on-year growth of 102.4%. This performance highlights our improving operating leverage, efficient cost structure, and strong product mix.
Looking ahead, we remain focused on strengthening our wholesale partnership, accelerating growth in the diamond jewelry segment, scaling our expanded retail footprint, and and investing in technology and design innovation. With a strong nine-month performance and an enhanced retail presence, we are confident in sustaining our growth momentum and delivering long-term values for our stakeholders. Finally, I would like to extend a warm invitation to all of you to visit our flagship showroom and experience firsthand the craftsmanship collection, and elevated retail environment.
With these remarks, I now open the floor for your question. Thank you.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] The first question is from the line of Vinod Shah from VS Ventures. Please go ahead.
Unidentified Participant
Yes, hi, good afternoon, sir.
Rajesh Mehta
A very good afternoon.
Unidentified Participant
Yes, sir, congrats on good set of numbers.
Rajesh Mehta
Thank you so much.
Unidentified Participant
Sir, how much sir of order visibility look for like Q4 and early FY 2027?
Rajesh Mehta
Could you repeat the question louder, please?
Unidentified Participant
Yes, sir. So, how does the order visibility look for Q4 and early FY 2027?
Rajesh Mehta
Yeah, the overall segment of German jewelry looks good only as the prices are increasing, there is a slowdown for a shorter period of time, but overall the prospective is very good. The whole industry is going to grow at a pace of 30%, 35%, I believe.
Unidentified Participant
Okay, thank you. And so what is our current working capital cycle and how is it moving like on quarter-on-quarter basis?
Rajesh Mehta
See, that’s what current working capital is, that’s what our stock rolling cycle is somewhere around 50 days.
Unidentified Participant
Okay, great. And, so do you see any like, change in inventory levels due to the fluctuation in gold prices? So, how is the inventory levels right now?
Rajesh Mehta
So, we — there are the fluctuations in gold prices, but, the demand is — the demand has not impacted much. So, I believe that the working cycles and the stock rolling cycle would be nearly same only. Maybe here and there, there is a variation possibility of 10%.
Unidentified Participant
And sir, are you witnessing like any, like, competition from organized and like one of the best players. So, how is competition over there?
Rajesh Mehta
No, that is an improvement into the whole German jewelry segment now, when there is — there is shifting of business from unorganized sector to organized sector as a quality perspective and resale value perspective. All the consumers are believing to buy a right product at the right price. So, it all depends upon the design, and gradually, things are improving, and based on designs, the margins are also improving.
Unidentified Participant
Okay, sir. And, sir, what is like revenue contribution from our top five clients in the B2B segment?
Rajesh Mehta
That’s what on a broader side, if you see to it, the maximum top 5 clients would be contributing somewhere around 15% to 20% of the total revenue.
Unidentified Participant
Okay, and like going forward, what do you think, how will that mix look like?
Rajesh Mehta
Since we have been progressing on all the — all the various parameters of our various verticals of our business, we are expanding into B2B segment, B2C segment, and everything. So, we are — we are on a constraint basis, we are defining that we are going to grow at a pace of 30% in all vertical. And since we have come up with a new showroom and our retail spread is going to give a bigger share in the upcoming years,
Unidentified Participant
Okay. And like, what is the, like, the area of the showroom, the new showroom?
Rajesh Mehta
Yeah, the new showroom is total build-up area is of 10,000 square feet.
Unidentified Participant
Okay, okay. And, like, on the, like, on the geographic sense, so what is the geographical breakdown of our revenue? Like how diversified is this?
Rajesh Mehta
Since, we have been in primary phase in South India, most of the revenues are from Tamil Nadu and some upper parts of Andhra and a few parts of Karnataka. Primarily our presence is in South India.
Unidentified Participant
So, for like the, the gold prices are quite volatile, so are we using any hedging mechanism to manage it, cooling price for all entities?
Rajesh Mehta
Yeah, we have been using that regular natural mechanism as we have been operating with the refilling strategy. Whatever we sell, we buy it back, and if there is any extra orders, we buy it and we hedge it into the exchanges also when we follow that regular natural mechanism.
Unidentified Participant
And they have been like — if it’s been effective in protecting our margins, right?
Rajesh Mehta
Yeah, obviously, correct. There is no impact in fluctuation as per our margins are concerned. Margins are intact for that.
Unidentified Participant
Okay, okay. And so what was the, like, volume of gold sold in Q3?
Rajesh Mehta
Exact quantum, I cannot define now currently. I will share you later.
Unidentified Participant
Okay, okay, sir. Thank you, sir. That’s all from my side.
Rajesh Mehta
Yeah.
Operator
Thank you. [Operator Instructions] The next question is from the line of Anil Parekh, an individual investor. Please go ahead.
Unidentified Participant
Yes, thank you for taking my question. Am I audible?
Rajesh Mehta
Yes, sir.
Unidentified Participant
Okay. I guess my question was a slightly general question. It’s a reasonable expectation that the current circumstances, the global circumstances, particularly the war, might end soon. So, if that were to happen and if gold prices were to correct by say 15% or whatever, to what extent do you think that this would be good for demand? Because at such high prices, currently a lot of the growth by jewelry retailers and wholesalers are coming from just the value growth as opposed to a massive volume growth. So, do you think that there might be a huge upsurge in volume of take if gold prices were to correct by 15%?
Rajesh Mehta
Yeah. In the near term scenario we do not see that there is a huge correction of 50% is anywhere possible. But even then when there is a correction, the volumes are gradually very high. And this has been happening in a very all long period of time. Whenever we say the steep correction in the prices, the demand goes up. Sometimes it have even reached dual. So, the demands will surely improve if the prices come down.
Unidentified Participant
And can you kindly opine on, you know, the growth that you’ve shown this particular quarter. Unless of course you’ve already mentioned in your opening remarks, which I may have missed, sorry, what percentage of this close to 50% growth has been on account of volume versus value?
Rajesh Mehta
That’s what the value growth is around as for the revenue of last Q3, if you check then it has been around 49.6% year-on-year for this quarter and overall value growth of 34.04% for the nine months. And since we are into various verticals of business and we have some lower margin verticals, we have good lowest lower turnover and higher margin verticals, we have improved a lot that has added up to improve our EBITDA margins and PAT margins.
Unidentified Participant
Right. And my final question sir, is that you’re giving a guidance of about 30% going forward. Is that a conservative guidance? Because it seems like you where you are geographically in the southern part of India, it seems like you’re right where there’s a lot of demand for gold and gold jewelry.
Rajesh Mehta
Yeah. Obviously, we always define in a constrained basis only. We always try to define constraintly and prove better. So, that has been our style of working and we feel that yes, we are going to achieve much better than that, but we are defining a growth of 30%.
Unidentified Participant
Thank you. I will get back in the queue.
Rajesh Mehta
Thank you so much.
Operator
Thank you. The next question is from the line of Vidhi Purohit from H&I [Phonetic]. Please go ahead.
Unidentified Participant
Hello?
Rajesh Mehta
Yes.
Unidentified Participant
So sir, I just wanted to understand your current debt position and as you look at the expansion over the next few years, do you plan to fund it largely through internal accruals or should we expect incremental borrowing?
Rajesh Mehta
Now as per the current requirements, all the fulfillment of working capital requirement has been filled by the internal segment. For the future date, if any expansion is planned on a bigger level then if any funds is required, that may be planned accordingly when and then the management decides about it.
Unidentified Participant
Okay. So, as the retail mix increases, how should we think about revenue growth and margin trajectory over the next two, three years? Any broad guidance or directional targets that investor can anchor to?
Rajesh Mehta
That’s what, overall, since we have been in lesser participation previously into the retail segment, now we are planning to expand on the retail legs and we are in upcoming two years we are planning that at least 25% of the total volume will be shared by the retail B2C sales. So, in that case our bottom line is also going to improve and we are going to have an additional revenue from B2C.
Unidentified Participant
Okay. So on the B2C side, could you elaborate on how you are leveraging technology whether in design, I mean whether in design, automation, CRM or analytics to improve the customer acquisition and repeat the business?
Rajesh Mehta
Yeah, obviously on, we have been working on various ERP systems for making our designing easy, recognition of requirement, customers demand market scenario. Everything has been analyzed and all the unit based on that analytical data, we are trying to get those products which are selling very fast. That is the primary reason that our working cycle is running fast and we have been working with various technologies for improving much more on that.
Unidentified Participant
Okay. So, given increasing competition from organized and national jewelry players, what do you believe differentiate your value proposition whether in pricing, design, innovation or customer loyalty?
Rajesh Mehta
That’s what, since we have been in the industry for more than five decades, we have an very wide design library and our designs are widely accepted among both the segments, B2B and B2C. And we have been always working on the technologies and the client requirement understanding and designing products in such a fashion that it does not fall very heavy on the pockets of the clients also because the prices are increasing. So, we have been always concerned about considering the requirement of our clients and preparing the designs accordingly. So, in that case we have our own design library which has been widely accepted. That is the taxes and what they say that represents Khazanchi as a very different among the other peer competitors.
Unidentified Participant
Okay. So my last question is in Q3, FY 2026, revenue growth was strong around 49.6%. So, could you help us understand like how much of that was the volume driven versus realization led? I mean considering gold price movements during the quarter?
Rajesh Mehta
That’s what we have grown on the volume base, if you take up, we have grown around 7% to 10% in between. But overall the margins have been improved so much because we are working on the various verticals. On the various verticals, so some other verticals where the margins are less, we have reduced our margins, we have reduced our volumes there. And on other verticals where our margins are high, we have improved on that. That has improved our EBITDA margins and PAT margin.
Unidentified Participant
Okay. Thank you sir. That’s all from my side.
Rajesh Mehta
Thank you.
Operator
Thank you. The next question is from the line of Mahesh Seth from VY Capital. Please go ahead.
Mahesh Seth
Yeah, hi, can you hear me?
Rajesh Mehta
Yes, sir.
Mahesh Seth
Yeah, so, sir our EBITDA margin has expanded to 6% in this current quarter. So, how much of this improvement is sustainable like versus festival led operating level?
Rajesh Mehta
Yeah, that’s what I told you since we have been working on various different type of projects, higher value addition varieties and we have also introduced various brands for selling up of premium jewelries that have added up additional margins of EBITDA and we have been constantly working on that. And we are going to — our EBITDA margins are going to improve much higher as the share of B2C segment is also going to improve at an higher pace as our showrooms are open.
Unidentified Participant
Okay. And like with our PAT nearly doubling year-on-year, so should we expect this similar earnings growth in FY 2027 or like will — will it get moderated going further?
Rajesh Mehta
So, as the, as the demand for our designer products has been increasing and we have been working on the better higher margin products, our EBITDA margins, our PAT margins are going to improve at the same pace we believe.
Unidentified Participant
Okay. Okay. And can you also break down your revenue mix between plain gold jewelry, studded jewelry and diamonds? Like how this mix is evolving?
Rajesh Mehta
Currently I don’t have the handy data I can give you. You can drop in your question in the mail or with the Kirin Advisory so that I can answer it with details to you.
Mahesh Seth
Okay, sure. I’ll connect with Kirin.
Rajesh Mehta
Okay.
Mahesh Seth
Okay. And like what is the current same store sales growth for your retail business? Like how should we think about this trajectory over the next few quarters?
Rajesh Mehta
That’s what as we have opened up our new showroom here on 7th of Feb, from there in the last few days alone we have made a turnover of nearly INR20 crores here. So as projected we are planning that yes, the store will at least going to fetch us a revenue of nearly INR500 crores. And in the upcoming years we are going to add up a few more showrooms and things are going to improve on a retail basis which are going to improve our PAT and EBITDA.
Unidentified Participant
Okay, Got it. And like one more thing. As we see a lot of peers in the industry are expanding aggressively by opening more showrooms and increasing their geographical presence. So, how does company view this trend? And like as you already told that we’ll be planning this more showroom site for going forward. So like how —
Rajesh Mehta
Since, we have started up with our flagship showroom now, we are going to have an very what they say, right type of managed system uderstanding that clearly and on later all we will think of expanding on aggression.
Mahesh Seth
Okay. Got it, got it. Thank you you, sir. Thanks.
Rajesh Mehta
Thank you.
Operator
Thank you. [Operator Instructions]The next question is from the line of Bhaskar Kanras [Phonetic] from 3 Head Capital. Please go ahead.
Unidentified Participant
Hello. Good afternoon, sir. I am audible?
Rajesh Mehta
Yes, sir. Yes, sir.
Unidentified Participant
Thank you, sir. First of all, congratulations for good set of number, sir. Sir, my first question is can you, sir –can you, sir provided Q3 revenue mix each segment B2B contribution and B2C and each segment margin.
Rajesh Mehta
That’s what I told you. Till last year we have been contributed — Our B2B has been the primarily 90%. And 10% was our B2C participation. As our B2C bigger showroom flagship showroom has come up only this. So, the impact of this B2B expansion would be seen into the Q4. And as per the margins are concerned, our B2B margins are EBITDA margins if you define would be somewhere around 6%. And for the retail segment, these margins are around 10 to 11%.
Unidentified Participant
Thank you, sir. Sir, my second question is in the next year FY 2027, how — store extension plan, how much, how many store we are adding, any plan?
Rajesh Mehta
We cannot define now, the management is under the discussion of how the things are going to operate in the upcoming year. That would be defined as and when it has been decided.
Unidentified Participant
Okay, sir. Sir, my last question is, sir, this year, this quarter, any inventory again in this quarter?
Rajesh Mehta
Inventory gain you are talking about?
Unidentified Participant
Yes?
Rajesh Mehta
Generally, the overall contribution if you take there are inventory gains of around 1.5% are there. It differs, it is not fixed. It differs somewhere around 1% to 1.5%.
Unidentified Participant
Okay, sir. Thank you, sir. And best for your patience. Thank you.
Rajesh Mehta
Thank you.
Operator
Thank you. The next question is from the line of Raj Shah from Shah Ventures. Please go ahead.
Unidentified Participant
Yeah. Hi, good afternoon. I have some couple of questions.
Rajesh Mehta
Yes, yes.
Unidentified Participant
So, sir, can you tell me what is your average ticket size in retail versus wholesale? Like how does customer behavior, like how does — how does customer behavior differ across segments?
Rajesh Mehta
It all depends upon the client requirements. As per the B2B is concerned, we have clients who have been taking ornaments from us. They have, they buy it in the what they say on a lower category clients also. We have who are operating with the small showroom and we have bigger clients also who have been working on multiple branches also. So, in that case, it is an diversion. So it is not, it cannot be defined as per the ticket size. So, some jewelers which are having what they say many branches spread over, they are buying much higher than us. They are one single client. They have some 5% of our total volume that and there are clients which are which of the lower denominations also.
Unidentified Participant
Okay. Okay.
Rajesh Mehta
Yeah, yeah.
Unidentified Participant
And I also want to know about the working capital, like how much incremental working capital will be required to support the targeted increase in retail consumption?
Rajesh Mehta
That’s what for the new showroom we have planned — we have planned that we are going to take up an inventory of somewhere around INR150 crores in that and we have started operating that. So, based on that inventory requirements, we would be able to achieve what we have defined.
Unidentified Participant
Okay. And sir, are you seeing any shifts in consumer demand like towards a lightweight or lower carat jewelry? Like if you see like there is a very much of increasing gold prices as well. So, do you see any shift?
Rajesh Mehta
Yeah there is, there is a shift in the what they say lighter weight jewelry, say, for the marriage purposes. There is a prediction of say 20%, 25% in the weight range of the same product. So, we have been catering and we have been working on those designs that we can reduce the quantum of gold and give the output of same size. And that has been happening and we have been catering much better for all the demands of that client. And, yes, lower carat phase demand also for the minimal jewelries people prefer to buy lower carat age and we have been manufacturing lower carat jewelry also. So, as far as the south is concerned up to 18 and 22 carats are of on the mark, but there is a demand for 14 carats and lower carats are very low.
Unidentified Participant
Okay. Okay. Sir, I also want to know about like your business expansion like what is your strategy like to build brand recall nationally like especially outside your core geography?
Rajesh Mehta
That’s what on a future, the company management has a future plans also since we have a strong presence in South India, we have plans of expanding in South India primarily. We have a very big market here in South India. So, we are planning to expand in South India initially. Then later on as the company progresses, there are plants that we can diversify Pan India.
Unidentified Participant
Okay, let’s — I also want to know about EBITDA margins like over the medium term, what would be the ideal steady state for the EBITDA margin profile once the retail mix stabilizes?
Rajesh Mehta
That’s what, since the overall retail share of in overall sales the retail shares or we are the — we are of the vision that it is going to improve from 10% to 25%. So, the EBITDA margins are going to obviously improve. So, since the EBITDA margin is at 6% now currently, so it is expected to improve somewhere higher 20% to 30% from here.
Unidentified Participant
Okay. Okay, that’s great sir. Thank you so much for giving us the about the insight for the business.
Rajesh Mehta
Thank you. Thank you so much.
Unidentified Participant
Yes, yes, thank you so much. That’s all from my side, yeah.
Rajesh Mehta
Thank you.
Operator
Thank you. The next question is from the line of Priya Jain from Green Capital. Please go ahead. Miss Jain, your line is unmuted. Please proceed with your question.
Priya Jain
Yeah, hello, am I audible?
Rajesh Mehta
Yes, yes.
Priya Jain
There are a few questions with me.
Rajesh Mehta
Yes.
Priya Jain
I mean I think we have one store of around 10,000 square fit which is a flagship showroom. So, what capex was incurred for that flagship showroom and what ROI do you expect?
Rajesh Mehta
Hello? Yeah, your question is not clear. Your voice is breaking it seems.
Priya Jain
Sir, I’m asking, what capex was incurred for the 10,000 square feet flagship showroom and what ROI do you expect?
Rajesh Mehta
Capex for the coming showroom was around INR12 crores. And for the total revenue what you have defined that what we are expecting from this showroom is somewhere around INR500 crores for the retail division. And as I have defined already that our retail margins would be of somewhere around 10% to 12%. In that case that would be the return on the new showroom, return from the new showroom.
Priya Jain
Okay, sir. And what is the payback period for a new showroom investment based on current performance benchmark?
Rajesh Mehta
Somewhere around what they say we are overall stock inventory you are talking about or you are talking about capex?
Priya Jain
So, I’m talking about the capex.
Rajesh Mehta
Yeah, Capex part it can be covered in one and a half years.
Priya Jain
Okay. Then you incurred around INR12 crores from that flagship. So, okay. So, you aim to increase retail contribution and what at — what percent in two, three years and how many new stores we can expect?
Rajesh Mehta
Yeah, I cannot define on the figures currently, but the management is planning to open few more stores in upcoming year. And as for the retail share is concerned, we are going to improve the retail share from 10% to 25%.
Priya Jain
Are any plans, you know like will future retail expansion be company owned or franchisee led?
Rajesh Mehta
Initially whatever plan we have currently would be company owned only. Later on when the expansion plan is on a very wide range we can think of the second portion.
Priya Jain
And sir, like you know, you are, I mean scaling the retail part. So, what will be the impact on like employee cost and store level operating expense as there will be a lot of maintenance involved and what percent of like revenue expense as percent of revenue?
Rajesh Mehta
That would be — that’s what as the retail store is concerned, I’ve already defined that. As for the EBITDA, if you calculate on EBITDA, it would be somewhere around 1% to 1.5% of the EBITDA, 1%.
Priya Jain
And so one last question, like do you foresee any risk of inventory of sellers obsense, as you expand into premium and diamond categories?
Rajesh Mehta
I could not get your question. Your voice is breaking ma’am.
Priya Jain
Do you see foresee any risks of inventory? You know, like as you expand into premium and diamond categories?
Rajesh Mehta
There are no much risk here because always as we are catering lots of designs and patterns and diamonds also, we are procuring as per the requirement. Higher quality diamonds are only sold in South India. So, yes, we are getting with — we have quality only. So in that case we don’t find any risk for that.
Priya Jain
And sir, one more question. What is you know like margin difference between wholesale and retail segment?
Rajesh Mehta
That’s what, margins with regards to wholesale are somewhere around 5% to 6% and retail margins are 10% to 12%.
Priya Jain
Okay sir, that’s from my side. Thank you.
Rajesh Mehta
Thank you
Operator
Thank you. [Operator Instructions] The next question is from the line of Anil Parekh, an individual investor. Please go ahead.
Unidentified Participant
Thank you again. So, the management just mentioned that you want to take your retail contribution to about 25%. Just wondering, when is that likely to happen? How long is it likely to take? A year or longer than a year?
Rajesh Mehta
As per our performance here in the current store, we are confident that it can be reached easily in one to one and a half years.
Unidentified Participant
Okay. And what would be the steady state PAT margin, you know, once you do get to 25% retail contribution of your top line?
Rajesh Mehta
That’s what same pace as we are going to — as we are going to what they say, going for an 10% to 25% of our retail share. In that case, obviously we are going to achieve our PAT margin somewhere around 25% to 30% better than here.
Unidentified Participant
So, 4.1% is what you have today? And you think you might do 25% more than that, that’s the idea?
Rajesh Mehta
Yeah. Yeah.
Unidentified Participant
Okay. And just kind of thinking about where you would like strategy wise this business to be four, five years from now. Where would you like the retail contribution to be? So, are you happy at 25% or would you like it to be much higher?
Rajesh Mehta
It should be much higher only. But we are always defining at a constraint level. And since all the other verticals also, we are going to grow at a 30% pace. In that we are going to achieve much higher only, but we are defining at a constraint level.
Unidentified Participant
Thank you so much.
Rajesh Mehta
Thank you.
Operator
Thank you. The next question is from the line of Charchit Maloo from H&I. Please go ahead. Charchit, your line is unmuted. Please proceed with a question. Charchit, are you able to hear me? As there is no response from the current participant, so we’ll take the next question from Arpan, an individual investor. Please go ahead.
Unidentified Participant
Congratulations on the new showroom. How has the footfall been so far, sir?
Rajesh Mehta
Football has been very nice. It is much more than what we expected and we have been working on various marketing strategies and advertisements also. So, we are expecting a very better output here.
Unidentified Participant
What would be your marketing expense as a percentage of your revenue?
Rajesh Mehta
Sir, out of the total revenue for this current year, we are planning somewhere around — somewhere around 0.75 to 1%.
Unidentified Participant
Okay. So, there have been — there have been videos on social media where jewelers are claiming that they are selling every jewelry for around 3% flat making charges. Do you think that model is sustainable and is that a threat to the entire industry or especially the retailers like you who are working on a very big level?
Rajesh Mehta
Yeah, it is not that actually, jewelry is mainly concerned on the designing perspective. It is not that whatever we define a similar type of product, it cannot be taken as an just an investment prospective, selling at 3% item and all would be somewhere which is of machine mechanism are very, very minimal through the designs which are just for the investment purpose sort of design. So that is not there. There is an craze for designer jewelry always and things have been working because people spend like to spend. They are spending say INR1 lakh on buying a gold. In that case additionally if they pay, they pay INR5,000 extra, INR7,000 extra, they are buying a piece of jewelry which defines their dignity. So, it is always been decided by the client in such a fashion. So, in that case I don’t find any threats of that.
Unidentified Participant
Okay. So you have been selling change for around 1% which has been seen online. So, how do you think that would be sustainable? Or is that, is there any other product which you have been selling at around this 1%?
Rajesh Mehta
That’s what, that’s what I told you know, that is an selected few designs which are machine made and which are of the own production and it is an opening attraction we are defining, so to increase our footfall. So very, very minimal portion of stock we define that way.
Unidentified Participant
Okay, so you do have your — do you have your own manufacturing unit or is everything sourced up from outside?
Rajesh Mehta
That’s what we have tie ups with all the major factories pan India and we have been working on that style only. Since our primary focus is on what they say, diversified designs, we cannot bring all the best under one roof. So, we have been working on that type of module.
Unidentified Participant
Okay, fine. And what about the — have you kept only South Indian jewelry in your retail showroom? Or you have been catering to other North Indian and West Bengali jewelry as you say?
Rajesh Mehta
So, we have been procuring designs from Pan India. We have ties up with factories all over the all over India and it’s not constrained to South Indian jewelry only. And since there is an what they say, after Internet expansion and various Instagrams and everything, it is all type of jewelries are preferred by all type of clients. It’s not restricted to one particular design or one particular market.
Unidentified Participant
Okay. Now your major client base is South Indian customers. So, that is what we wanted to know if you have North Indian customers also?
Rajesh Mehta
Yeah, we have North Indian clients and so we have South Indian clients also. We have clients from all over. We are catering the all type of jewelry whereas we have been selling jewelry also that [Indecipherable] everything which are primary designs used for North Indian. So, it is an what they say blended of Pan India client range. Everybody likes and every type different type of design.
Unidentified Participant
Okay. So what is the revenue mix between your South Indian versus your forte and pan capital?
Rajesh Mehta
That separate database we don’t have. But overall jewelry turnover since we are in South India, primarily we are focusing on customer requirement. It cannot be diversified as whether we sold to South Indian or North Indian.
Unidentified Participant
Okay, one question. What would be the average margin at which average wastage of the product [Technical Issues].
Rajesh Mehta
It all depends. The chain items and all start with 3%, 4% and Kundan, Jadau Polki goes to 22% also, 23% also.
Unidentified Participant
Okay. All the best and that’s all from my side.
Rajesh Mehta
Thank you so much.
Operator
Thank you. The next question is from the line of Charchit Maloo from H&I. Please go ahead.
Unidentified Participant
Hi, sir. Am I audible?
Rajesh Mehta
Yes, yes.
Unidentified Participant
Sir, like my question is regarding the revenue from the showrooms. So, like what kind of revenue are we targeting for the next quarter and for FY 2027 from the showroom business?
Rajesh Mehta
That’s what in upcoming years, we are planning to have an revenue of around INR500 crores to INR550 crores from this showroom.
Unidentified Participant
Like I think they have the margins of 10, 11%, right? Because they are more or less into retail segments.
Rajesh Mehta
Yeah.
Unidentified Participant
Right. And so like — and sir, overall what kind of revenue are we targeting for like Q4 FY 2026 and FY 2027 and what will the EBITDA margin going forward?
Rajesh Mehta
That’s what, the share of this new showroom share would be for another one, one and a half months only for the Q4, the participation of this new showroom revenue would be there. In the upcoming year, surely we are — we are working on achieving what we have defined.
Unidentified Participant
No sir, I’m talking about overall revenue, like at the business level.
Rajesh Mehta
Yeah, overall revenue. That’s what the constraint level we are defining that we are surely going to grow in all verticals by somewhere around 25% to 30%.
Unidentified Participant
Y-o-Y?
Rajesh Mehta
Yeah, year-on-year.
Unidentified Participant
Okay, okay. Sure. And EBITDA margins will be expanding from 6%, like is it sustainable?
Rajesh Mehta
That’s what the share of retail is going to increase, no, so they are going to obviously improve.
Unidentified Participant
Okay. Okay. Okay. Thank you. Thanks.
Operator
Mr. Maloo, you want to ask more questions?
Unidentified Participant
No, that’s it for me. Thanks. Thank you.
Operator
All right, thank you.
Rajesh Mehta
Thank you.
Operator
The next question is from the line of Sakshi Shinde from Shah Consultancy Ltd. Please go ahead.
Rajesh Mehta
Hello?
Operator
Yes, your line is unmuted. Please proceed.
Unidentified Participant
Am I audible?
Operator
Yes, yes you are.
Unidentified Participant
So, my question is, what safeguard are in a place to manage credit risk in the wholesale segment?
Rajesh Mehta
Primarily, we do not have any style of credit strategy. We do not give much credits to the client. Our portfolio type of business is on mainly primarily focused on designs and cash and carry business. Our average credit cycle is only two weeks. So, we do not find any threat on receiving that.
Unidentified Participant
Okay. And how much capacity utilization are you currently operating in the manufacturing and is there a room to scale without significant capex?
Rajesh Mehta
That’s what I am telling you know, the company do not own any — their own manufacturing unit, on a future date they have a plan of having their own unit. And since we have been working with various factories pan India, so we do not find any difficulty as and when required by what type of product is required in much demand, we manufacture that way.
Unidentified Participant
Okay. What is your dividend policy and how should investors think about capital returns versus reinvestments?
Rajesh Mehta
That’s what, as and when we have already defined two dividends here being an start-up company, we are just now we’re being listed and it is two and a half years and we have defined two dividends. In the upcoming years, yes, the policy of strong division policy would be defined and the management would be sharing their progress with the shareholders and stakeholders.
Unidentified Participant
Okay, okay. Thank you.
Rajesh Mehta
Thank you.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Harshil Ghanshyani for closing comments. Over to you sir.
Harshil Ghanshyani
Yes, thank you. Thank you everyone for joining the conference call of Khazanchi Jewellers Limited. If you have any queries you can write us at research@ka.com. Once again, thank you everyone for joining the conference.
Rajesh Mehta
Thank you so much.
Vikas Mehta
Thank you, everyone and all. Thank you.
Rajesh Mehta
Thank you everyone.
Operator
[Operator Closing Remarks]