P N Gadgil Jewellers Ltd (NSE: PNGJL) Q3 2025 Earnings Call dated Feb. 13, 2025
Corporate Participants:
Saurabh V. Gadgil — Chairman and Managing Director
Kiran Prakash Firodiya — Executive Director and Chief Financial Officer
Unidentified Speaker
Analysts:
Naveen Trivedi — Analyst
Tushar — Analyst
Unidentified Participant
Aniruddha Kekatpure — Analyst
Abhishek Kumar — Analyst
Dinesh Kulkarni — Analyst
Bismith Naik — Analyst
Rashmi Narayan — Analyst
Devanshu Bansal — Analyst
Nitin Jain — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and. Welcome to the Q3FY25PN Gut Guild Jewellers Limited conference call hosted by Motilal Oswal. 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 assist during the conference call, please signal an operator by pressing star and then zero on your touchstone phone. I now hand the conference over to Mr. Naveen Trivedi from Motilal. Thank you. And over to you.
Naveen Trivedi — Analyst
Yeah, thank you so much. Good afternoon everyone. On behalf of Motila usal, I’m Naveen Privy would like to welcome you all to the P.N. gargi Jewelers TQFI 25 earnings conference call. From the management today we have Mr. Saurabh Gargil, Chairman and Managing Director Mr. Kiran Ferodia, Executive Director and CFO.
I would now hand over the call to the management for the opening remarks. Over to you Saurabh.
Saurabh V. Gadgil — Chairman and Managing Director
Thank you Naveen. Good evening everyone and thank you for joining us today for the PNGargills Jewelers Q3FY25 earnings call. I hope you all had opportunity to go through our financial results and earning presentations which are already uploaded on the stock exchanges and the company’s website. So this quarter has been really remarkable for us as we continue to build on our strong market presence and customer trust.
We were delighted to share that October 2024 was our best ever month in which revenues surpassed 1050 crores, setting a new benchmark for the company. For the entire Q3FY25, our total revenue stood at 2,435 crores registering a 23.5% growth year on year compared to 1972 crores in Q3FY24.
This performance was largely driven by a strong demand during the festive and wedding season, an uptick in the consumer sentiment and our ongoing efforts to enhance the product portfolio at the store level. Our revenues per store stood at 1. Would you like to begin the Q at 3.25 crores demonstrating strong operational efficiency.
Our SSG the same store sales growth continues to be strong at 26%. Our retail segment. Our business is primarily divided into three segments retail, e Comm and franchisee of which the retail segment around 77% and leads to delivering 42% YoY revenue growth, an EBITDA margin of 6.42% and a PAT margin of 4.23%.
Beyond retail, we witnessed exceptional growth in our E. Com and franchisee segments too. Our E. Com revenue grows by almost 100% to 70 crores and the franchisee revenue rose by 87% to 2.26crores in Q3FY25. This robust growth across all the segments reinforces our strategic direction and position us well sustained in the upcoming quarters.
Adding to that, our customer engagement remains very strong with our transaction volumes rising by 21%. And the average transaction value ATV increasing by 22% to 86,000 rupees per transaction. Moreover, we recorded a 36% increase in footfalls and supported by a strong conversion ratio of 93%. This has helped us to really focus on the consumer demand and purchasing at all our stores in a most efficient way. The specialty season played a crucial role in Q3 with Navratri sales increasing by 18% and Diwali sales increasing by 53%. We capitalize on this momentum by successfully expanding our footprint with the launch of nine showrooms in nine consecutive days during Navratri bringing our total store count to 48. I think this is the first time that somebody that some jewelry brand has been able to demonstrate nine days of Navratri with nine store launches. This marked the 45% year on year growth and we are on record to reach 53 stores by Q4 FY25. The expansion reflects our commitment to growth and our ability to meet festive consumer demand effectively. Additionally, an important point we Observed is a 39% year over year increase in our studded ratio which now stands at 7.4% highlighting an evolving consumer preference towards more premium jewelry offerings. Our engagement with the entertainment industry also continues to be strong with our brand presence. In the promotion of the movie Paani at our store this quarter, despite record high prices of almost 80,000 compared to 72,000 last year, we witnessed a 5% increase in demand. The strong demand during the wedding season has been particularly beneficial contributing significantly to our growth. We are also observing a shift in the consumer preferences with a growing inclination towards lightweight rose gold white gold primarily among younger customers. We also anticipate that by 2029 the demand for 18 karat gold will increase significantly bringing further opportunities for growth in the industry. A key highlight of this quarter also has been our enhanced hedging strategy where the proportion of hedge gold through GML increased from 12% last quarter to over 45% this quarter which we showcase our effective risk management strategy and the ability to navigate further. We are confident that our growth strategy, customer centric approach and expanding store footprints will continue to drive value for all our stakeholders. With this now, I invite our CFO Mr. Kiran Ferozea to provide deeper insight into financial performances. Thank you. Over to Kiran.
Kiran Prakash Firodiya — Executive Director and Chief Financial Officer
Thank you and good evening everyone. Let me take you through the financial of the company for the quarter end quarter ended number 2024, we reported consolidated revenue of INR24,357 million reflecting 23. Hello. Hello. Yes, we can hear you. So reflecting 23.5% year on year growth. We achieved the EBITDA of INR129 crore making 37.2 growth year on year with EBITDA margin of 5.3 up basis points year on year so the consolidated PAT come to INR80 crore representing almost 49.5 I.e. 50% year on year growth with PAT margin of 3.5% a 60 basis point increase year on year we have achieved robust performance across all key business segments. Our retail segment posted a Strong growth of 42% Contribute 187 crore to overall revenue 1878 crore Revenue to the overall top line. The E commerce segment demonstrated exceptional growth for almost 100% gearing to 70 crore. Lastly the franchisee segment recorded growth of 87% which is contributing to 27 crore on our top line. If I have Some update about nine months ended 31-03-31 December 20 consolidate revenue stood to 61,052 point billion. A 32.7% year on year increased an EBITDA of INR26.19 million reflecting almost 40% year on year with EBITDA margin of 4.3% and packed for nine months stood at INR156 crore making 53.7 strong growth year on year. This reflects our operational execution and customer centric approach and strategic investment across channels. We are confident in our ability to sustain this momentum as we continue to value for our stakeholder. Lastly the most important is the hedging that metal load which we are availed and for the meeting our day to day world requirement. This based on daily sales criteria in aggregate the hedging is currently as on number is 83.6% and as on today that is you know January we are fully hedge with respect to my total business gold. So over to you guys.
Saurabh V. Gadgil — Chairman and Managing Director
So now we’ll be open to questions further clarifications from.
Operator
Sure. So would you like to begin with the question answer session?
Saurabh V. Gadgil — Chairman and Managing Director
Sure.
Questions and Answers:
Operator
Thank you. Ladies and gentlemen, we will now begin the question answer session. Participants who wish to ask a question may press star and one on your touchstone telephone. If you wish to remove yourself from the question key you may press star 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. We have the first question. Lionel Tushar from Big Sur Investments. Please go ahead.
Tushar
Hello. Yeah. Am I audible?
Unidentified Speaker
Yes, sure.
Tushar
Yeah. Good evening sir. My first question is if I see your last year quarterly result company achieved lower profitability in Q1 and Q2. And. And whereas Q3 and Q4 profit liquidity pose at the same level. So do we expect this trend to continue this year or should Q4 be lower than Q3 this year?
Kiran Prakash Firodiya
Hi, good evening. So with respect to the profitability for last Q3 quarter ended, we are hopeful that we will continue the momentum on the same way. Main reason is that now we are focusing more on hedging part. So there should not be any impact whether gold prices will be go up or go down. There will be neutral effect. So whatever may be the business we are expecting that is definitely going to generate the profit in the same margin.
Tushar
Okay, next question. Is the ROC on the new store comparable to some of our old stores? ROC on the new store is compared comparable to some of our old stores.
Kiran Prakash Firodiya
So ROC of the new store as we mentioned or as we have given some insight at the time of IPO that time also we have demonstrated that whatever new store we are open, it is typically taking 15 to 18 months to reach at break even. But if you ask me the current data of 9 months, 9, 9 day 9 store which we have opened as on date, they are operationally self sufficient to cater the all the store expenses. So if the momentum continues then we hopefully able to break even even less than a year and then they will definitely start adding to the ROC as well as bottom line.
Tushar
Okay. And one last question. We are planning to expand to mp, Chhattisgarh and Jharkhand from next year. Our brand will be relatively unknown in these markets compared to Maharashtra. So how do we expect to maintain our performance in this market and what is our strategy?
Saurabh V. Gadgil
Yeah, it’s a good question. So this is something which we have been working on for since the last six months. Growth strategy for us is a very, you know planned move. We have, we have been speaking about following the Peshwar route outside Maharashtra. Moving to Madhya Pradesh, Chhattisgarh, Jharkhand, Bihar, up.
So for that we have been, you know it’s a where we’ll be holding exhibitions there. So primary we have now we’ll do exhibitions there. Connecting to you know, city based consumers there, connecting to friends of brand, different organizations and build up, you know the brand in the state before we go. Also these states have a very strong connection with Maharashtra where people have. I moved here for employment, for education. So the brand awareness is healthy in those states as far as PNG is concerned. So it should not be very very challenging. But for us it definitely is a well planned move. And we are sure that we’ll be able to achieve the same kind of brand penetration and loyalty which we have been able to demonstrate in state of Maharashtra. Again the legacy of almost 200 years is something which is definitely going to be a big usp different areas and our expertise of, you know, jewelry making, handcraft, jewelry. Something which should have give us the edge when we go into newer markets.
Tushar
Okay, so thank you so much. That’s all from my sir.
Operator
Thank you. We have the next issue from the line of Sanjay Sitaparti from Appleside Capital. Please go ahead.
Unidentified Participant
Yes sir. Just want to understand your other expenses increased a lot this quarter. Is it because of the new stores that you open?
Kiran Prakash Firodiya
So my other expense which you know increase by almost 30 crore on quarter. On quarter basis. These are basically the marketing spend that we have done. And at the same time there are some mark to margin which we have to pay because we have taken gold metal also. So we have to hedge that 100%. So for that also we have to consider in the mark to margin category.
And other than this there are couple of discount schemes which we have launched during the Navratri and Diwali festival. Because this being the festival wherein we have reached to a remarkable revenue of almost thousand crore in a single month. So all this considering the impact is of that way,
Unidentified Participant
Is there any losses relating to those customs duty reduction this quarter as well or. No,
Kiran Prakash Firodiya
No, there is no impact on Q3 as far as custom duties concerned. Because custom duty impact is, you know, happening the H1 or Q2 of this financial year and that has been fully recovered. Because at the time when duty reduction happen there is, you know we also witnessed the increase in the sales post 22 July 2024.
So it is compensated with the inventory infusion. So we have also replenished the inventory at lower cost. So considering net of there is hardly impact of 3 crore which we have already taken hit in last H1 and Q2.
Unidentified Participant
You have increased your number of stores quite significantly during Navaratri time. And I understand that there is some amount of seasonality to your sales rate. That is March quarter typically is lower than December quarter. But since you have increased the number of stores, do you think you will be able to match December quarter performance in March as well?
Saurabh V. Gadgil
Typically in the jewelry industry Q1 and Q3 are the quarters where. Wherein the major festival seasons lie. So one is Gudipada, Akshaythia and Q3 where Diwali season lies. But having said that, again, Q4 has that one day of the wedding season. Also this year Gudi Padwa is on March end which is going to be in Q4 itself. And with the sustained consumer interest in gold as an investment in gold as jewelry and with the price outlook remaining bullish, we see a strong traction of consumers. The same store growth has been in double digits and I think that the new stores also have taken off more than what was desired. So I think we are confident that we should be able to keep the momentum going because the stores were rightly selected in the right location and each store has shown remarkable sales right from day one. So considering that we do not see this as a challenge where it will have an impact on the numbers for Q4, but yes, Q3 definitely is a month which has advantage of Diwali and Navratri.
Unidentified Participant
You are more or less going to probably complete your target of some 52 jewelry stores by end of this financial year.
Saurabh V. Gadgil
Yeah, so we already added two stores in January. So right now we are at 50 stores and in the month of March we’ll be adding three more stores. So we’ll be at 53 stores as of March end.
Unidentified Participant
And then what kind of store edition are you planning for next financial year? Is that something which you are disclosing
Saurabh V. Gadgil
Next financial year? The plan is that considering a company owned store and a franchisee store along with our, you know, the lifestyle format, what we have, what we have envisaged, the, you know, store with lighter weight jewelry, we would be adding 25 stores in the next finance, in the next calendar financial year which will be a mix of franchise and company owned stores.
Unidentified Participant
Okay, okay. Considering this kind of growth rate, do you think you will be able to maintain current EBITDA margin? Because you’ll be constantly spending more on these new stores which have more than 12 months of breakeven. Right, Sir,
Saurabh V. Gadgil
Our strategy is very different. We are not expanding randomly in different states, but we’ll be focusing on two particular states for next year which will be, you know, we’ll have majority of the stores here, plus we’ll be doing some more expansion in the state of Maharashtra.
And like I mentioned, the light style stores. Light style by png. So this is basically targeting the new generation, you know, young stylish jewelry. So these stores typically need a very low capex. The stock investment would be in the range of. Five to seven crores. So our internal accruals will be strong and we will not be looking at raising heavy debt to fund the expansion. It will be managed through our internal accrual and around 10 stores would be out of this also would be franchisees. So which will not be draining our capital. So to answer a question, will they have impact on margin? No, because the nine stores which started this year, the three stores starting before years, all these stores will also lead to maturity and know stock cycle stock does have more than one and a half, two. So that will aid us to be able to easily fund this new store expansion.
Unidentified Participant
And if you can just ask one more question that when you are saying because you have already spent almost entire IPO proceeds in your listing so you’re saying that you will be able to fund your expansion through internal accrual going forward
Saurabh V. Gadgil
Because post IPO proceed we have also repaid the entire bank debt. So if you’ve seen the IPO objectives, 300 crore was to repay the term loan, the bank debt and then the balance was primarily used for stock infusion. So current. So as we speak on December end we were almost debt free, just a 50 crore to 60 crore term loan.
So we are in a very comfortable position as debt to equity ratio is concerned and that would really help us along with our strong internal accruals and the focus being only on investing back in stock. So this is how we have planned expansion in the coming year.
Unidentified Participant
Thank you so much.
Saurabh V. Gadgil
Thank you.
Operator
Thank you. We have the next question on the line of Anirudh Kepatre from Edelweiss amc. Please go ahead.
Aniruddha Kekatpure
Hi. Congratulations. Sourabh and Kiran Manam. Good set of results. Couple of questions now this 25 store editions which are planning in F26 how many would be the Cocoa stores in this?
Saurabh V. Gadgil
So the mix of 25 stores would be you know PNG stores which would be full fledged stores which would be in the range of having inventory of around you know 40 crores. Then they would be lifestyle by P and G stores which would be smaller format stores, thousand to fifteen hundred square feet with a capex of seven to eight crores.
So the plan for the year is that we’d be doing eight cocoa stores, seven to eight franchisee stores for P&G. The regular, the 40 crore model and then around 10 lifestyle stores which would be half Cocoa and half focal. Along with that we also be expanding with a store or two in us. So the area identified are right now Seattle where we’ll be starting the store. Hopefully in Q1 of next year.
Aniruddha Kekatpure
Okay, and what would be the, you know, typically the break even for these lifestyle stores that you are expecting?
Saurabh V. Gadgil
Lifestyle stores, you know, are in the same line what we’re looking at our store. But lifestyle being, you know, lighter weight, we expect them to break you in nine to 12 months. These are stores where it will be, you know, gold jewelry of 18 karat and a bit of 22 carat but lighter in weight design which are not catering to PNG.
And then there will be diamonds jewelry which is 18 karat gold and diamond again design which are which we don’t keep in PNG. It may also have 14 karat gold. But the advantage of this is that the pricing here is little premium. So, so margins here would range in the range of 15 to 20%.
Aniruddha Kekatpure
Okay, so would you. How do you think this should help move your overall studded ratio then? So it was 7.4% in this particular quarter. Can you help me with what was this in Q? You know, on a QOQ as well as YY basis, the studded ratio
Saurabh V. Gadgil
Lifestyle by PNG strategy is not to target studded. It’s primarily to target the younger population, Gen Z people who are looking at, you know, very stylish jewelry, a different shopping experience, maybe mall presence. So that is where we are targeting Lightstyle by P and G as far as the student ratio is concerned. In Q2, late Q2, we launched our Polki and Jadao collection by the name of Polmi which saw good traction during the month of Diwali.
And that is what we are moving ahead with. So Polki as a category is something which will really help us to gain, you know, two, three basis points in the studded ratio category. Along with that, precious stones and color stone jewelry is another area of focus. So this along with strong growth in the natural diamond category is what will help us to achieve to reach to that target of around 12, 13% studied in the next two, three years.
Aniruddha Kekatpure
Okay, this last bit of question. What would be the SSG for this particular quarter given 26% for nine months, what was it for Q3,
Saurabh V. Gadgil
Q3 on that.
Kiran Prakash Firodiya
So talking about. Yeah, so Q3, same store sales growth we have in, in terms of gold is 44% wherein, you know, the value growth 44% and volume growth, we have observed 14% year on year.
Aniruddha Kekatpure
Okay, understood. Can you just, you know, Lastly, just briefly comment. How is the environment at this point in time in terms of what is the customer behavior that you’re seeing? Given that gold prices have kind of moved up very sharply recently or they continue to consistently move up, Are you seeing any reduction in footfalls? What is the customer behavior at this point in time?
Saurabh V. Gadgil
Our customer footfalls have seen a positive rise. As we mentioned in our presentation. My ATV has gone up to 86,000 rupees.
Aniruddha Kekatpure
Now that’s Q3. I’m saying for Q4 this ongoing quarter. I’m saying
Saurabh V. Gadgil
Ongoing quarter. We do not see a dip in footfall primarily due to pricing because prices some way with the consumer somewhere accepted too. So I do not see that will have a major impact in terms of footfall. We are seeing that the wedding season looks strong again. From 15th of March onward, the festive Gudi Parva wives will start showing the collection launches planned for Gudi Parvakshadritiya.
So I think overall the Q4 also looks to be on a good sound footing. But to answer a question whether there’s been a customer hold back due to high prices, that has not been a case. Prices have shown increase so people the currency has changed. Some people would exchange old gold to make wedding jewelry so that portion can see a higher rise.
But people looking at encashing gold or selling gold, that phenomenon has not kicked in. So we believe that the consumer sentiment remains strong.
Aniruddha Kekatpure
Excellent. Congratulations once again and all the very best.
Saurabh V. Gadgil
Thank you.
Kiran Prakash Firodiya
Thank you.
Operator
Thank you. We have the next question line of Abhishek Kumar from Sanctum Belt. Please go ahead.
Abhishek Kumar
Hello, good afternoon. Congratulations on a good set of number. Most of my questions have been answered so I just have one bit on the expansion strategy. So given that we are one of the biggest player in Maharashtra over here we have a rich history and knowledge and understanding of the local Maharashtra market. Given that we have aspiration of moving to different state from here on Madhya Pradesh, Jharkhand as the one which you mentioned.
So because given that there would be competitive activity from local and other panel deployers. So what kind of strategies you are thinking in order to deploy there so that you have a right to win in those markets and other brand building activities which you plan to undertake. Take in coming months when you actually launch the store. And also would those stores be primarily Coco stores or you would experiment with Foco?
Saurabh V. Gadgil
Good question. And so I answered part of before that the strategy would be in a very planned way. We have already done the market survey in the area which we are looking to expand. That is primarily looking at the market, comparing mapping with competition, mapping with the on the design front, mapping on the brand front post that we’ll be doing exhibitions in various cities which we are focusing for growth ahead.
Along with the exhibitions we do a lot of customer connect activities. We do a lot of branding activities. So the brand presence, the brand connection before we store launch is quite well established and this really helps us to be able to start sales as soon as the store opens. Having said that, yes, definitely it’s a different market but we have seen that advantages which Central India, North India offer. It’s a single language state.
These states have a very strong connect with Maharashtra and that really has helped to get the brand awareness. The brand similarity and brand evangelists are already there in those states. So we do not see it as a big challenge. We definitely would be able to continue with our same strategy as we go there in terms of pricing and what we believe is the entire shopping experience which a customer feels at P and G and the brand relationship which we have developed, that’s a strength which also will be adequately used as we go in those states along.
Coupled with that we would be again positioning at the same level what we’re positioning here. So we are a jeweler to the middle class, upper middle class and that’s a big base of the pyramid. That is what we also targeting in those states when we go ahead
Abhishek Kumar
And store expansion initially would be Coco and stores.
Saurabh V. Gadgil
Yeah. So initially we would be doing the Cocoa stores there but like I mentioned we also be looking at, you know, franchisees where it’s focal for angel company operated. We already have a strong interest on that front. But the company would first do three to four Cocoa stores and only then undertake the, you know, the Foco model as we, as we further progress in those states.
Abhishek Kumar
Okay, got it. Thanks for asking the question. All the best.
Saurabh V. Gadgil
Thank you.
Operator
Thank you. We have the next question from the line of Dinesh Gulkarni from Finsight. Please go ahead.
Dinesh Kulkarni
Hello sir. Am I audible. Yeah, thank you, sir. Thanks for giving me the opportunity and really great set of numbers. Sir, my question was just line so what was asked here just now. So like are we saying that the growth in Maharashtra for PNG has more or less, you know, like we have captured or penetrated most of Maharashtra. Is that is why we are looking out at other states or as is that the competition in Maharashtra is such that, you know, that we are not seeing the same kind of growth which we saw in the past. Can you just elaborate on that?
Saurabh V. Gadgil
During our IPO presentation, we had said that we would be looking at around 50 to 55 stores and post that we would be expanding in the neighboring states. And that is what the same thing what we are right now kind of saying. We had 53 stores in Maharashtra. We feel that the region, the state is quite well covered by us.
Growth definitely will happen in the state and the existing stores will keep on performing. Maharashtra is a growing state and definitely there’s potential for the state. But in terms of locations, we feel we are quite well covered. There are a few more locations which today may not be sunrise, but which are looking emerging in the coming years.
So we’d also keep an eye on Maharashtra and any opportunity, any state where any city we feel is opportunity, we would definitely look at that. But having said that, we need to further expand the brand and that is where we’re looking in the neighboring state. But our SSG Maharashtra has been strong and will continue to be strong.
Dinesh Kulkarni
Yes, that is the concern. You know, like what we know today, Maharashtra is obviously the growing state and it is the largest contributor to the gdp. Right. But if you compare Mashtra with other states, like even the per capita consumption and expenditure would not be as high as Maharashtra. Right. So would not that impact the, you know, the SSG growth? However we look at those aspects of, you know,
Saurabh V. Gadgil
So the maximum number of hallmark jewelers are in the state of Maharashtra. When you look at the entire belt of central India and say north India, you know, the number of jewelers compared to the, you know, population, the state size is very attractive for opportunity to expand further there. And again those Maharashtra has, is an established state. Is a state wherein, you know, there’s already development happening happened and it will happen further. But India has. And that is where we see a lot of new states where new opportunities and we want to be a part of that, you know, those new opportunities. Also our focus on Maharashtra will remain strong and we would, you know, seize every opportunity we have in this state here.
Dinesh Kulkarni
Okay, that sounds great. And so eventually can we expect the kind of margins we are doing in Maharashtra? Those similar will be reflected in our company’s performance in other states as well. We are on the same line, right? Or are they at a lower end? How’s that going to impact the margins say three years from now?
Saurabh V. Gadgil
Long run pricing in Maharashtra and other states are almost the same. For jewelry there isn’t any much difference. So I think on margin front we would be looking at positive improvement because as a student ratio goes further up, we will be seeing a benefit from that. And also since we are now fully hedged, price fluctuations and price movements will not affect our margin. So going ahead we should see better margins as the studded ratio starts growing further and further.
Dinesh Kulkarni
Okay, so that sounds really encouraging. Just the last point from my answer. So we said that we are going to introduce this Lifestyle by P and G. That’s. That’s a great initiative. Just wanted to understand where does that stand with comparison with CPN Gargi, Right? I mean they. Are they in the same lines or the different sort of business models?
Saurabh V. Gadgil
A fashion jewelry brand it is not. And Lifestyle by PNG is a. Is a fine jewelry brand. So it will be dealing in know gold and diamonds only. It is not fashion jewelry or not silver jewelry. So this is primarily complementing our existing, you know, PNG gold and diamond sales. But targeting a new tg, targeting a younger TG and being able to offer the design which are highly differentiated than what we have in our existing stores with better margin than existing stores.
So the ATVs there would be lower than what we have in the stores here. It will be more of fun jewelry. It will be more of casual shopping, more of impulse buying as compared to PNG where it’s a planned buying and a serious shopping.
Dinesh Kulkarni
Okay, that sounds really good, sir. And thank you very much. All the best.
Operator
Thank you. We have the next question line of Vikas Reddy from Lakshmi Kala Investments. Please go ahead.
Unidentified Participant
Good evening, sir. Congratulations on a good set of numbers. Sir, after the recent spike in gold prices, have you noticed an increase in demand for 18 karat gold as compared to 22 karat?
Saurabh V. Gadgil
There’s been a slight introduction of 18 karat in all our stores. So it’s right now more of a pilot project than a serious project. We’re trying to look at people’s preferences. So 18 karat is being slowly introduced. More in chains and in fingerings categories. But you know, serious shopping is still happening in 22 karat. And people are looking at enhancing their new designs by exchanging old gold, but. I think wedding shopping Primarily is still 22 carat driven while you know lightweight shopping gifting can move to 18 carat. But it’s too early to say that, you know there’s a sure short shift in that direction.
Unidentified Participant
Yeah. And I just wanted to know that what’s the difference between retail and non retail side of business? So what is the non retail side of business?
Kiran Prakash Firodiya
So retail means the sale which we are happening across the counters of all our 48 stores. Non retail means these are the store which we are doing through franchisee partner through E commerce.
Unidentified Participant
And as we are, as we had discussed in last con call, we are trying to reduce the non retail side which is bullion sales. Right. So and we have, we are more focusing on retail stores only. Right,
Kiran Prakash Firodiya
Correct. So as we promised we have totally stopped that retail, that refine retail which is across my 48 stores and franchisee and E commerce.
Unidentified Participant
Okay, got it, got it. My last question is sir, hearing a lot of buzzing. Lab grown diamonds. Most of our peers are building their own stores in lab grown diamonds. Are we planning to open our own store selling lab grown diamonds
Saurabh V. Gadgil
At P and G? There’s been no demand from consumer asking for lab grown diamond. And you know the reason for that has been that we have been most of the jewelry chains diamond jewelry sales are in the size of minus 11, 11 cents and minus Lago diamond have only taken off in the bigger sizes. So 30 cent, 40 cent plus. So it has not had any impact on our sale or on demand for natural diamond. So we have no plans under PNG to introduce lab grown diamond. But like you said that you know if it’s, if it’s a trend which catches on. Are we equipped? Yes, we are equipped. And you know maybe at a time Lightstyle by PNG can venture into Lagrange diamond if the situation is favorable for Lacrone diamonds.
Unidentified Participant
Thank you so much sir. All the best.
Saurabh V. Gadgil
Thank you.
Operator
Thank you. We have the next question from the line of Bismit Naik from RWA advisors. Please go ahead.
Bismith Naik
Thank you sir. First question would be what sort of inventory gain would be a booked in this quarter and the base quarter
Kiran Prakash Firodiya
Almost 2.5 crore.
Bismith Naik
So 2.5 crore in this quarter.
Aniruddha Kekatpure
Q3.
Bismith Naik
Okay. And in Q3 FY24
Kiran Prakash Firodiya
Y24 since we are not using the hedging tool that time we are not listed. So that freedom which we have, we are bullish on the gold segment. But after IPO as we committed that we are increasing the hedging proportion that we have done it. And so this is affecting in Q4. And as on date of January, my entire business is.
Bismith Naik
Okay. And one more question sir, on other expenses. Since we added a lot of stores starting of Q3, right? So should we expect this run rate to continue or come down a bit?
Kiran Prakash Firodiya
As far as my new stores are open, we have a set of system or the procedure or policies as far as new store opening is concerned. So we have tight control on my all expenditure with respect to new store which we are opening. And at the same time we have SOP for new store to monitor the expenses as well. So we observe based on the historical data the same thing that typically 1.5 years, so 18 months is required to come to a particular store as a break even.
But you know, when we open nine store in nine days in Navaratri this financial year as on date, they are self sufficient to ensure that there is no cash infusion required to particular store to run. They are self sufficient. So hopefully in less than one year these nine store also can come to a break even and contribute in my total net profit.
Bismith Naik
So my question was on the blended console level, other expenses, should the run rate continue or would it go up a bit?
Kiran Prakash Firodiya
We are definitely. The moment sales figure will increase, the revenue increase, then my expenses and other things will be totally under control. Because these are more or less fixed on account of renter, on account of manpower cost, on account of other expenses. These are also centrally managed. Like all AMCs are done under centrally agency of admin. So things are under control. The moment revenue increases at particular store, then I think these costs will be under control.
Bismith Naik
Understood. Thank you.
Operator
Do you have further question, Mr. Bismuth?
Bismith Naik
No, no, I’m good, thanks.
Operator
Thank you. We have the next question on the line of Rashmi Narayan from Tunga Investments. Please go ahead.
Rashmi Narayan
Yeah, thank you. I just wanted to understand what has been the volume growth on the old stores? For example, the stores that were that we had as on end of FY24 on the nine months, what has been the grammage growth for those stores?
Saurabh V. Gadgil
You’re talking on the volume growth, right?
Rashmi Narayan
Yeah. On the volume growth of your stores. I think we had almost 40 stores, right? I mean. I mean as on FY24, the number of stores we had in March 20, March 31, 2024. I just want to understand what has been the grammage or volume growth for those stores in the last nine months.
Kiran Prakash Firodiya
So talking about YTD growth of same store sales growth that time see total we have 48 store. But if I have to give you the figure for same store sales growth then I have to consider only 22 stores because these are the stores which are available last year as of December and as comparable with respect to Q3 of financial year 25 considering only these 22 stores then my total growth in terms of value is 27% and in terms of volume it is 5% only. In talking about gold at company level, considering the overall growth my volume is increased by 13% and value is increased by 40%.
Rashmi Narayan
Got it. And. And what is the mix of trade in jewelry and team based jewelry and outside this and coins.
Kiran Prakash Firodiya
You are talking about the Boolean part of it.
Rashmi Narayan
No, there is. I mean some of the goal will be recycled in a sense that somebody brings it and then recycle and then second will be team led ones where you already have subscriptions and the monthly one and then third would be outside this. So I just want to understand what is the broad mix of this across for the last nine months.
Saurabh V. Gadgil
See our old goal with people exchange for new jewelry would be in range around 25 to 28%. Our scheme wherein people have, you know what you call it, the future purchase plan that would be in the range of around 8 to 10% and the balance is primarily on the spot fresh purchase.
Rashmi Narayan
Got it. And the new stores which you have actually opened, especially the 1 during Navra 3 what has been the kind of a run rate per month of sales of these new stores which got opened roughly maybe per quarter what kind of revenue these new stores are generating.
Kiran Prakash Firodiya
So now we have opened nine stores in nine days and the performance of these nine store is that in Q3 they have contributed 240 crore in the top line. So as per our plan the break even is that Once we reach 1010 crore then I think all my nine store will be. So we are. We are at present at 24% of the new store
Saurabh V. Gadgil
In three months.
Rashmi Narayan
Got it. Got it. This is very helpful. Thank you so much. Thank you.
Operator
Thank you. We have the next question online of Naveen from. Please go ahead.
Naveen Trivedi
Just couple of questions from my side. 1. By the end of December what was our inventory and GML closing inventory on December is 1000.
Kiran Prakash Firodiya
Ousand 800 crore and my GML is almost 558 kilograms.
Naveen Trivedi
Okay, and when you said by the end of December your hedging ratio was 83%. So how that ratio actually derives.
Kiran Prakash Firodiya
Actually the thing is when we are saying that whatever may be the price gain upward and downward. So we are considering what is my sale. So typically hedging policy as we have observed all the peers whatever they are forecasting for next financial year that much amount we are continuously hedging.
If you’re talking about total inventory which is lying in the company then we are almost 75% because 30% by way of old gold which is continuously exchanging across the counter. 30 to 35% by way of GML and we have 10 to 11% by way of derivatives. So considering total inventory we are in the range of 60 to 70. With respect to the effect on the profitability we are fully ahead.
Naveen Trivedi
Sure. And how much was our adage spend during the quarter? I’m sure that since a lot of stores have opened in the quarter three the ad spends would have been quite lumpy compared to the normal which we do it for other quarters. So how much was the ad spend this quarter expense Pertaining to how much adversity expense which we had done in quarter three.
Kiran Prakash Firodiya
I’m not getting your question.
Naveen Trivedi
I was saying that in quarter three how much we had spent or the advertisement which we had done for new stores.
Kiran Prakash Firodiya
Okay,
Saurabh V. Gadgil
So Naveen Kiran will give the numbers to you. But our total spend would be in the 1% of our entire turnover. So we are well in budget this year we should be closing at around 7,500 to 8,000 crores. So marketing spend for the year would be would range in the range of 55 to 60 crores including all the new store launches.
Naveen Trivedi
Yeah sure. And this last question from my side when you talked about this lifestyle source any specific location which you had identified in. I’m sure that this would have been largely in Maharashtra only.
Saurabh V. Gadgil
Talking of Maharashtra, I didn’t understand a question.
Naveen Trivedi
I’m saying which all markets in Maharashtra you are looking for this source
Saurabh V. Gadgil
See Maharashtra. The next three stores which we have planned in Maharashtra Primarily one is in Pimpiri in Chinchwad area on the outskirts of Pune and near Chafekarchow. One store is going to be another one, the flagship store here on Lakshmi Road. Very very close to our existing store. And the third one is going to be in a place. Called Telegao which is on the Bombay Pune highway. Along with these three, four, these three stores next year we also have the other in Mumbai which is again a flagship store planned hopefully in Q1 of next year. And post that we also have places like Jalgaon in Maharashtra which again we are catering to. So there’s a mix of Maharashtra and outside Maharashtra in terms of expansion outside Maharashtra, as we had said upbringing and Madhya Pradesh, other states where you know, expansion will commence in the. In the next financial year.
Naveen Trivedi
Yeah. Thank you so much Saurabh. I will be in the queue. Thanks.
Operator
Thank you. We have the next question from line of Devanshu from MK Global. Please go ahead.
Devanshu Bansal
Yes. Hi Saurav. Congratulations on a very good performance in both Q3 and 9 months. Sourabh, my question is broader and not specific only to you. I wanted to better understand this decline in gold grammage per store. Right. So obviously this is happening due to significant increase in gold price. But as an owner does this concern you and what steps are we sort of taking to improve this going ahead?
Saurabh V. Gadgil
See, decreasing grammage is not something which we have which is that alarming because what is happening is on one side is that decrease is average grammar which was say around 12 to 13 grams of jewelry. Maybe even a 14 gram would have gone down by a gram. But the number of footfall which we are seeing, the new additions that we are seeing is far more than that. Per capita income spending is rising. So that is being.
That is offsetting this entire decrease in maybe your ATVs. But having said that also the interest towards studded is something which is helping PNG again to gain better margins. So as prices go increasing people’s budget is going to somewhere not be able to match that hike. So. So we will definitely see a little dip in your ticket size. But this will be compensated by the rise in number of customers and our focus to further increasing our revenue.
Our conversion is something which will definitely be of use to us. So this is not going to be. This is not a concern and it is already well addressed by our company
Devanshu Bansal
Sort of from a inventory perspective. I wanted to understand this is like say four, five years ago at your stores and now in terms of kg are you also seeing some options? Optimization happening. So because gold price has increased, consumers are sort of purchasing lower grammar. So have you been able to reduce the grammar that your stores over say last four, five years? So what’s your strategy there?
Saurabh V. Gadgil
This is a strategy actually we adopted during COVID So post Covid was the time when we, you know, decided to work on leaner inventory level. So this was the year 202122 when we got down the inventory level by around 25, 30% across all the stores. And we compensated this drop by looking at made to order business.
So that has been a strategy which has really successfully worked for us. So inventory level which today our competition would be having say a 55, 60 crore, we work at a 40 crore and that helps us to again get better stock turns to get better revenue per square feet and revenue per store. So this is something which we have been constantly working on but it’s not only because of high prices. This is something which we had thought even before that and that really has paid off in the last four, five years.
Devanshu Bansal
That’s really encouraging to hear Saurabh. I just wanted to understand from a price increase perspective. So I wanted to understand. So suppose a necklace was say 30 gram earlier. So have we been able to reduce it to say 27 gram because there was some 8, 10% decrease in grammage purchased by consumers. Right. So I just wanted to check your thoughts there on that perspective
Saurabh V. Gadgil
Which is happening. So like Bangalore which were like say initially like 10 years ago, 50 grams have today come to 40, 40 or even like you know, maybe 37, 38 grams. So we are definitely working on trying to you know, make the same design in lighter weight. That’s ongoing process and that is something which has really, you know, been the flavor of the season as prices go up and budgets don’t match the same rise.
Devanshu Bansal
Very helpful Sourabh. Thanks for taking my questions.
Operator
Thank you. We have the next question on the line ofNitin Jain from Fairview Investment. Please go ahead.
Nitin Jain
Yeah, apologies if my question has been answered already. So I just wanted to know how Q4 has panned out so far given the unprecedented rise in gold prices. Thank you.
Saurabh V. Gadgil
I didn’t get a question. I’ll see. Repeat.
Nitin Jain
Yeah. Can you hear me now?
Saurabh V. Gadgil
Yeah,
Nitin Jain
Yeah. So I’ve joined a little late so apologies if the question has been answered already. I just wanted to know how Q4 has panned out so far given that you know, gold prices have gone up. Unfriendly
Saurabh V. Gadgil
Q4 is a month when we see sales on a steady level. Primarily backed by wedding shopping. Month of February is again gifting anniversary, the season of love. And then March is Guri padwa. So that starts by mid March. The shopping for Guri Padwa will start. So overall the quarter has been decent. Though prices have gone up, the consumer interest still remains old. Old exchange has gone up. But even in this quarter at the record price, so the sentiment remains strong. People interest and commitment to gold and jewelry remains strong. So I think as of now things are on track and it’s been a good quarter.
Nitin Jain
Thank you. And congratulations on the standout quarter.
Operator
Thank you. We have the next question online of Dinesh Kulkarni from Finse. Please go ahead. Mr. Kulkarni, can you hear us?
Dinesh Kulkarni
Yes, I can hear you. Can you hear me?
Operator
Yes, we can hear you now.
Dinesh Kulkarni
Yeah. Okay. Sorry for that like. So my question was more on say expansion like you mentioned that we are looking out across Uttar Pradesh and Maharsha. How is the focus on Karnataka? Because I believe a lot of people from north Karnataka work across many parts of Maharashtra. So what is the focus on that state
Saurabh V. Gadgil
We are seeing on Karnataka?
Dinesh Kulkarni
Yeah, Karnataka.
Saurabh V. Gadgil
In the strategy we had mentioned that we’ll be looking at central India. So that is something which we are right now following and looking at research there. They already finished a lot of ground market survey there. As far as Karnataka is concerned, we are still evaluating the market there, looking at the survey and looking at market potential there. So there isn’t any fixed plans of doing that. But like you mentioned, it’s a neighboring state having very strong connection to Maharashtra. So that can be looked at. So we’re exploring it further.
Dinesh Kulkarni
Okay, fair enough. So my question next is on the hedging, sir, like you mentioned, as you can see, the other expenses part is on a consolidated level. It’s almost 200 crores just for the nine months which is way above the full FY year 2024. So can you just explain this how as we do more and more hedging for the upcoming years and quarters and years, so this expense will increase, right? So will there be a proportionate increase with respect to sales either in value terms or volume terms? How will that be? Like, how should we look at that?
Kiran Prakash Firodiya
To answer your question, whatever may be the hedging portion, that is not coming in other expense, that is coming in the cogs part only. But the hedging which we are doing for my gold deposit. Scheme like you know currently at present we have almost 40 kgs of the gold which we have recently launched that gold purchase plan wherein people are coming and buying the instead of paying the amount they are booking the gold in regular basic in SIP model. So whatever gold they are planning to purchase in future that amount we have to hedge. So that is not part of my cog. So that mark to margin will come in my other expense. Other than this whatever current hedging that is going to affect neutralize in my cost of goods sold only.
Dinesh Kulkarni
Okay, fair enough. That that’s one more thing then select we you said we are doing some online, you know transactions and online selling as well. Right? So how does that work really? I mean so it is just like I select something from just online store and you deliver it or like where to go and because I’ve never really seen anyone really buying gold at a online basis. I mean how was the train there and why is it so growing if it is growing so much?
Saurabh V. Gadgil
I’ll explain to you the online model. So on the online model as we call the E commerce model we function on two different platforms. One is our own PNG website and one is third party website like Amazon, Flipkart, Tata Click, Ajio. So we have product listed on the partner website. And also on our website people can purchase jewelry, both gold and diamond and maybe diamond coins bars. How this happens is you go online, you select what you want, you know, bullions, coins are all ready to ship.
Jewelry can be in two categories. Ready to ship and made to order. As for that you place or you make the payment, if it’s order placed, you will be placing the order. If it is ready to ship, it will be shipped immediately and it comes to delivers to your place mentioned in the invoice fully insured by the company. So this is how the E Comm model functions. If you’re asking me the growth there is a lot of demand from people especially during festive days during their during times of investment.
More when you want to purchase coin bars, jewelry, a lot of lightweight jewelry, gifting jewelry purchased online and heavy jewelry. Wedding jewelry. Today is a hybrid model where people browse online and buy offline. So online model definitely also aids your offline sale and also gives you pure online sales.
Dinesh Kulkarni
Okay, but the eventually the delivery will happen from the flagship store or nearby store, right? I mean it’s as good as buying from the. How does that. Because I mean like are the margins different there? Your online versus offline
Saurabh V. Gadgil
Margins are the same. It will be done through our central office. So it will not be done through the stores, it will be done through a central warehouse. And if it’s made to order also, it’ll be ordered done in the same process like a customer order undergoing QC and then post that it will be shipped to the consumer. The customer. So this is all done from a separate location, not from any of the stores.
Dinesh Kulkarni
Okay, so basically you’re saying the ATV is more or less same across, irrespective of online or offline. Right. It is just the mode of purchase that differs
Saurabh V. Gadgil
Because on the ATV you will not be looking at heavy shopping online. So ATV definitely is lower, but you know, it’s a convener for people and that’s a trend which people today prefer buying lighter weights online. So it’s a need of the R and that is why we are there.
Dinesh Kulkarni
Okay, so some last question from my end. So in the last four or five years we have seen, you know, the gold prices almost doubled even in fact more than doubled. And so how have we seen the footfalls like say compared to. I know I’m going way far back in the history five years versus today. So just because the doubling of gold price, how has that impacted, you know, on the footfalls?
Saurabh V. Gadgil
If you look at any industry, even if you look at auto today with petrol going up, the number of cars on the road is only increasing, population is increasing, people’s buying power increasing. In jewelry, the move from unorganized, organized is increasing in a big way. So all this for organized players has been on the positive side.
So we are seeing a lot of movement and a lot of new additions to our existing consumer base. So price, you know, price has never been an obstacle. Certain erratic moments in prices may, you know, impanel people to hold on for a couple of months. But eventually buying happens and you know, as long as in today’s bullish market where everyone is looking at gold scaling further highs, definitely there is no pressure on, you know, people’s buying or on the number of consumers.
As we showed in the presentation, our consumer base has increased. We have shown also high conversion rates. So I think the organ industry is seeing a big benefit from the entire move. And today brands, people with, you know, legacy, legacy brands, transparency, transparent and you know, ethical brands in all industries are being rewarded and so in jewelry.
Dinesh Kulkarni
Okay, sir, thank you very much. All the best. Yep,
Operator
Thank you. I would now like to hand the conference over to the management for closing comments.
Saurabh V. Gadgil
I think thank you everyone for taking time out and you know, joining this conference. It was insightful from us to, you know, you know, have a conversation with you. Your questions have definitely helped us to work on the strategy side and I think we’d be able to answer any further question if you have, you can, you can reach the company or you can feel free stories to us. Investment Relation Partner, X4B Advisory. Thank you very much. Good day, everybody.
Operator
Thank you. On behalf of Motila as well. That concludes this conference. Thank you for joining us. And you may now disconnect your lines. SA.