Sky Gold and Diamonds Limited (NSE: SKYGOLD) Q3 2026 Earnings Call dated Feb. 10, 2026
Corporate Participants:
Mangesh Chauhan — Managing Director
Akash Talesara — President
Siddharth Sipani — Chief Financial Officer
Analysts:
Parth Patel — Analyst
Deep Shah — Analyst
Palash Kawale — Analyst
Anushka Vora — Analyst
Vaibhav Mishra — Analyst
Smith Gala — Analyst
Bharat Gianani — Analyst
Raj Sarraf — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Sky Gold and Diamonds Limited Q3 and 9 months FY26 earnings conference call. As a reminder, all participant lines will be in the lesson only mode and there will be an opportunity for you to ask questions after presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing staff 100 on your Touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Park Patel from MUFG end time. Thank you. And over to you Mr. Parth.
Parth Patel — Analyst
Thank you on behalf of MUFJ in time. I welcome you all to Sky Gold and Diamonds Limited Q3 and 9 months FY26 earnings conference call. On the management side we have Mr. Mangesh Sohan, Managing Director Mr. Siddharth Sipani, Chief Financial Officer and Mr. Akash Sadreshra, Resident Sales and Business Development. I hope everyone had an opportunity to go through our investor deck that we have uploaded on exchange on the company’s website. I would like to mention a short disclaimer before we begin the call. This call may contain some of the forward looking statements which are completely based upon our belief, opinion, expectations.
As of today, the statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this now, I hand over the call to Mr. Mangesh Chauhan. Over to you sir.
Mangesh Chauhan — Managing Director
Good afternoon. Mangesh Chauhan here, Managing Director of Sky Gold and Diamonds. First I want to thank my team. They delivered a strong performance despite a tough market. I will assume you have reviewed our latest results and presentation. Sky Gold’s journey has unfolded in three phases. In the beginning our goal was to build a basic product portfolio and establish credibility by securing our first corporate client. We anticipated the shift from unorganized to organized retail very early and that paid off. Similar shift is happening in jewelry manufacturing. Jewelry manufacturing is getting more organized with IPO proceeds and internal cash generation.
We were able to penetrate multiple clients and lease a large facility in Navi Mumbai. Once we raised preferential capital, we had guided our revenue Pat and roche of rupees 5000 crore 3.5% and 25% respectively by FY27. Since then we have increased our guidance multiple times. We would be exceeding even our recent guidance. Also in the third phase, Skyboard strategic focus shift to Internet cash generation. Top line growth including volume expansion remains central. But we are equally committed to disciplined growth and Robust cash flow Cash Free Cash flow generation the two phases were fueled. The first two phases were fueled by the mix of internal and external capital.
Skybolt 3.0 however, will be driven entirely by internal generated capital. Our guidance calls for a 30 to 35% CAGR in revenue alongside strong cash flow generation. By 2030 we expect to deliver INR 945 crore pack and achieve a net debt free position. The revenue growth will be capped at 30.35percent since we would like to be net debt free by FY30. There are not many businesses in India which can grow revenue at 30.35percent CAGR and convert 2025% of PAC to OCF. This also underscored the lean growth engine we have built. Considering the large addressable opportunity, we can easily grow at twice the pace, but we would not be in a position to generate operating cash flows.
The dual commitment to growth and cash generation discipline underscores our ability to scale by creating long term shareholder value. When it comes to the jewelry industry, corporate governance is always a question mark. We would like to follow highest corporate governance. From first April 2026 global edit firm will be put in place. Kudos to Siddharth for leading this change. As promoter we have agreed for zero salary compensation model. From FY27 we will follow dividend only compensation. Promoters would draw compensation exclusively through dividends ensuring their rewards rise only when shareholder benefits. This structure fully signs promoter with minority alliance, promoter with minority shareholders as payout depends on shared ownership outcomes.
Dividend would be distributed strictly from operating cash flows reinforcing financial discipline and long term value creations. There are three main pillars in the company Creativity, technology and manufacturing excellence. Now let me request our President Sale Business Development Akash Tanlvesa to explain our efforts in the Mercedes space. Over to Akash.
Akash Talesara — President
Thank you Mangesh Bhai hi, this is Akash Talesra, President Sales and Business Development at Sky Gold and Diamonds. I come with more than 23 years of experience in jewelry industry with the past experience of working with domestic and export market with all the jewelry categories like Gold, Diamond, Lab Grown silver. When I joined Sky Gold and Diamond My first goal was to find the USPs and build on the company’s existing strengths. Skygold is especially strong in making lightweight casted jewelry. We are a young company with modern 3D technology, laser cutting stamping that helps us produce high quality lightweight design efficiently.
At that time gold prices were rising fast and gold was becoming expensive and the customer preferred lightweight jewelry. This trend worked in our favor and skygold was in the right position to meet this demand. The company also had access to growth capital which helped us focus onto the right product categories and grow quickly in the market. This created a perfect ecosystem to make it as a one stop shop for all the jewelry requirements in the jewelry manufacturing labor, raw material machine are important but co creation and merchandising skill makes the real difference. Designing plain gold jewelry is very different from designing diamond jewelry and both needs special expertise.
Over the last three years we doubled our merchandising and design team to around 150 people and built strength in many categories. We have now more than 25 different jewelry projects. We also started a diamond design studio in Anderi near to ceibs to use the local talent available there. Another important initiative we took was co creating with the retailers. We work closely with the retailers to design products that match market trend. Our team studied their current portfolio and competitors then prepare sketches, prototypes, samples as our proposal before they approve for the mass production. We measure success by how many designs get selected by the retailers.
This database approach has given us one of the best selection rates in the industry and has helped us reduce unsold inventory as well. Our teams are constantly co creating with the retailers like Malabar, grt, png, Carrot Lane, Joyaluka Reliance, Aditya Birla, Kalyan and many more. Sometimes we create new well studied themes on our own and invite the retailers to choose from them. This creates a healthy competition and helps us understand what market really wants. It also changes our relationship with the retailer from just buying to selling right from buying to selling to a true partnership and generally whatever is co created has a better strike rate and sales.
We also have made a custom cell in the organization, probably one of the biggest in India. As many end customers show photos and designs they want and the retailer asks us to make them. Though the volume is small but this strengthens the bond between the retailers and the customer which ultimately benefits us. One of the major achievement was onboarding Damas which is one of the biggest retail chain in the GCC in just three months. Their customer is mainly buying 21 carat jewelry which is very different from the Indian market in terms of design and workmanship.
Our team studied their need carefully and created a special product range for them. After studying the market. This shows how flexible and strong our merchandising team is. Skygold has recently received many merchandising awards including the one from Carat Lane and Aditi Birla. Debeer selected us as an exclusive partner for couple of their campaign which is my first diamond and the bestie bracelets. Only four or five companies were chosen out of the 45 applicants. We have also partnered with World Gold Council and our product were highlighted in the TV commercials and the ad campaigns which further proves our leadership in innovation.
Our product range has gone a lot through in house effort and acquisition value added products now contributes more than 50% of the revenue compared to just 4 to 5% three years ago. There are categories like 9 carat, 14 karat, 18 karat rose gold jewelry are growing well even in the basic products like chains, we have added an extra value to improve the margins. To improve the customer experience, we created a focused CRM team. For better sales support, we also launched a digital app where customers can see our design bank in all the categories and place orders directly from the app.
Around 7 to 8% of the orders already are coming through the app and this will increase further in the upcoming months. Our sales team is also responsible for margins and collection to ensure healthy cash flow. Another step forward was creating Dealership network. Our next growth area is reaching to the smaller retailers through the distributors and dealers. We are in process of building region wide dealership network also as South India is one of our key focus area. We opened a sales office in Trishur to have a better grip on the South India. Further ahead, we wanted to increase our footprint in exports as well.
So we opened an office in Dubai Gold Souk, the center of Gold global trade. We hired an experienced professional team who has sold near about 200 kgs of per month earlier. With their past experience, this is a very important step for our international growth. Talking about manufacturing strength, I would like to thank Mahindra Bhai for improving the factory’s efficiency controlling gold loss. Our Delivery time is 30 to 40% faster than many competitors. The shift to direct casting, 3D printing, laser hollow stamping and other latest techniques and R D has improved the finish and made our jewelry 20 to 30% lighter. Once again, thank you so much. Over to Mangesh Bhai.
Mangesh Chauhan — Managing Director
Thanks Akash. Apart from Akash, we are fortunate to have another silent achiever, Thiru. Thiru brings over three decades of jewelry manufacturing expertise including a decade at Titan in product development and a long tenure at India’s largest jewelry manufacturer implementing ERP systems. Since joining Skygold, he has reduced gold losses from 1.5% to 0.5% and continues to drive further improvements. Siddharth leads our finance team with dedication and focus is leading ERP implementation across the organization. Thiru has already digitized the backend, monitoring Productivity, order flow and goal loss while rolling out ERP at the front end is expected to be over in next six months.
As first generation entrepreneurs, Darshan Bhai, Mahindra Bhai and I have worked tirelessly to build this organization. We are proud of our achievements yet recognize that our processes are still evolving. To strengthen and scale, we are bringing in external talent from leading organizations to help us implement world class systems. Investors will appreciate the transformation as the company becomes fully digitized, benefits will be seen across multiple fronts. Implementation of the Jewelry ERP system is not a simple task. Siddharth has been instrumental in shaping our Vision 2030 or Skygold 3.0. The leading finance team is in a fast paced working capital intensive business is not so easy task yet he has exceeded expectations.
For the first time we have gone down to the level of sales type, geography and product level, an exercise never attempted before. Special thanks to our finance team for making this possible. When we charted our three year strategy, our agenda was clear. Drive growth while generating cash flow. I repeat, growth will not be compromised. In the next phase our focus shift to revenue growth rather than volume growth since gold prices remain beyond our control. On the contrary, if gold prices falls, the entire jewelry market expands and as a relatively small player this works to our advantage.
At 30 35% revenue growth, we will position to generate sufficient pat as cash flow enabling us to deleverage our balance sheet and achieve a net debt free status by 2030. My finance mentor Siddharth will take you through our vision.
Siddharth Sipani — Chief Financial Officer
Thanks Mangesh Bhai. Before we walk you through Vision 2030, let me address a common question about the impact of gold prices on our business. We are fully back to back hedged so price movements do not directly benefit us. However, when gold prices rise sharply, end demand tends to soften and unorganized manufacturers struggle with the additional working capital requirement. In these periods we gain an indirect advantage. Capital is not a constraint for an organized player like us. Another common question is on the gross margin expansion in the current year. To date our consolidated gross margin stood at 8.27% versus 5.97% in FY24 means an increase of 230bps.
This has been mainly on account of impact of gold reduction by 100bps increase in advanced gold business leading to improvement in gross margin by close to 60% pips and balance is on account of value added products like 18 karat jewelry, 9 carat jewelry, diamond studded jewelry and various other co creation designs. To summarize, our gross margin improvement has been mainly on Account of gold loss reduction. Increase in advanced gold business, increase in 18 karat studded jewelry business having better margin. Our revenue growth will be driven by three key levers. Increasing share within existing corporate clients, expanding reach through distributor markets and scaling exports.
Strengthening our merchandising capabilities is central to this journey. We aspire to be a global leader in jewelry manufacturing. To achieve this, we must further build our merchandising team. In his previous role, Aakash worked with leading clients such as Signet, Costco, Walmart, Macy’s and others bringing valuable experience to our efforts. We are such a tiny player in the market that reaching 18,000 to 19,000 crore is not expected to be a challenge. We would like to pick the right battles so that we don’t compromise on the gross margins and working capitals. Our margins are supported by three key levers.
Advanced gold, a growing share of value added products and improved manufacturing efficiency. In the advanced gold segment, we job work is booked directly in top line with limited costs which optically results in higher margins. Margin gains from value added products and efficiency improvements are straightforward. While an additional benefit will come from financial deleveraging. As cash flow strengthens and debt is repaid, interest cost currently at close to 1.2% of sales will reduce to virtually zero. Even though we are optimistic about our pat mark expansion, we are also cognizant of the opportunities present. Now let me explain the levers available for working capital deduction.
First, advance gold carry no capital employed. Secondly, export and distributor segments also operate on spot payments or receivable under 10 days. As these categories expand, working capital intensity will decline further enhancing efficiency and resilience across the business. Directionally, we expect our working capital cycle to drop below 60 days. To summarize, we are looking at revenue of 18,000 to 19,000 crores, PAT of 5.2 crore plus OCF to EBITDA of close to 20% and achieving net debt free position by 2030. Also, promoters will take salary through dividends starting 2027. Further, our accounts will be audited by global audit firm effective first quarter of upcoming financial year.
Now I request the moderator to open the floor for any Q and A. Thank you.
Questions and Answers:
operator
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen will wait for a moment while the question queue assembles. The first question Is on the line of deep shah from equivalent security. Please go ahead.
Deep Shah
Thanks for the opportunity and congratulations on good set of numbers. So basically two questions. First is on the demand side. So if I see the festive this time was good volumes were healthy despite higher coal prices. After the quarter there were some zigzag moves in the gold prices. Just wanted to check how has been the behavior at the retailer level, how has been the inventory level and more importantly, if you can highlight how has been the behavior at the ground level. Yeah, that’s my first question.
Mangesh Chauhan
Sure, sure. So you can say gold prices have risen BY I think 60, 70% in a year. But we as a manufacturer Skygold and already our clients are also started taking step one year, one and a half year back only when gold prices were rising by 15 20% so they have moved to 18 karat 9k. Again 22k is a leader in the market because it’s a favorite of South Indians and all The Indians market 22 carat is a leader. But nowadays you can say we are. We have produced 19 to 20% of 18 cake in this quarter December quarter.
So 20%. So they are shifting the carrot is making the inventory lighters. So when the. When sky gold you talk about the Skybold is making very lighter inventory. We are one. Our ticket size is 55, 40 or 60 thousand. We are below one lakh rupees. 80% inventory is below one lakh and 20% inventory is two lakh below two lakhs. So there is a higher impact on the higher jewelry which is Kundanpur and 5 lakh 10 lakh 15 lakhs inventory. But coming to the lighter segment there is a very less impact because of the budget of the customers.
So again we have in last before fourth quarter only we started by 3D printers started reducing the lightweight. The inventory we were making in 10 grams it is 8.5 grams. We were reduced by 15 rate and 20. So yeah, your question is perfect. And in January it was in 10 days only it rised very much. So for five to 10 days it was very latest customer football was impacted. But when the gold price decreased in 10 days and it corrected by 15. Now there is a very good rest in the showroom to buy the jewelry because it got cheaper by 15%.
So store levels are there also making the strategy of lightweight 18 carat 9 carat and maintaining the sales. And again we are into the same boat. We are into lightweight journey. So we have very lesser impact. And we are on track. And at the retail level also because Fate level of consumer has gone up. You can see consumer has gained a five to six terms return in six to seven years. So no product in the world gives a returns of five to six times in a six years or seven years time. So. So where the customer faith levels are gone up.
Anytime jewelry is going to be buy it may be in 9k, it may be in 14k, it may be 18k. Some of them we are buying pretty crad. Then you will get so some 50 customer doesn’t matter the budgets and 50 customer buys in the budget. So we fit there by the inventory lighter and all. So craze of jewelry in India is numerous and they will keep on buying. But the gold rates has come down correctly by 50%. So it’s very attractive rate for the customers. And the room level customers are good.
Deep Shah
So basically what I wanted to check was when there is such exact moment do customers wait for another correction? How does they generally be? I understand will be will be in touch with retailers.
Mangesh Chauhan
Yeah. So those who are buying bullion or bullying or etf they see the screen and wait for the correction or wait for more correction. But coming to the jewelry this is about the gift. This is of the occasion. This is of the mares season Diwali Navaratria. And it’s about the buying of the lady buyer. So at the home they when the rate is reasonable, jewelry is not about that. It will be correct more or whenever there is a need they have to buy. If there is a gifting occasion, there is many Father’s Day, Mother’s Day, Valentine’s Day comes in.
On the occasion they have to buy the jewelry as per their budget. So it’s a different market. ETF and bullion are buy down the under sentiment that it will collect more or less whatever they assume. But on the jewelry market side there is no.
Deep Shah
Yeah, got it. And sir, with the very strong wedding pipeline and Akshay also coming in the first quarter just wanted to check how then the inventory at the retailer levels Are the inventories at normal level? Have they stocked up higher? Just wanted to check that.
Mangesh Chauhan
So retailer planned their inventory as per the stores which where they are located over the square feet of the showroom. And they keep on maintaining the same budget of the inventory, same kgs of weight. And there is not reduce. Also there’s an increase also because they have a plan that the children should hold 80kg or 50kg. Whatever the size of the soul and whatever says they refill the jewelry.
Deep Shah
Okay, got it. And sir, last one thing from my side When I went through your presentation I think actually I didn’t find much around the gold medal loan. And when we brought that sir, one of his key agenda was also to increase gml. So just if you can throw some light on how been the sanction.
Mangesh Chauhan
Yeah. Already we are using 80 crore of GML and we have 150 crore of GML limit. Some of the bankers doesn’t have limits so it takes time to give SBLC limit. And again yeah we agree that there is a slow process going on for gml. But sometimes when we have an order of a customer, when we get give the order of GML day deliverance after one days or second third days and in the market we get at the same day from the banks. So we have to wait for two days to start the production. So we are going in the churn and we have to adjust with the GM.
And so sometimes there is no, I mean unavailability of the raw material. Sometimes it gives third day. So whenever it is the same day we are utilizing when it is not available, it is available on third day we have to go again to the normal limit. So it’s taking time process because some availability issues are there. But we are fitting into that churning and we are trying it harder. But again we are doing it very slowly process here.
Deep Shah
So what will be the target over here next year? The FY27
Mangesh Chauhan
and we have a target. Of 350 crore or something in 34 quarter. But we are saying from last 23 quarter we accept. But some banks had that not have that products which we bankers hold. So they give take time to give SBSA to other banker. And all the process are there. But again we are targeting it to take the in 3 to 4 quarters to 350 crores. 80% of the limit.
Deep Shah
Okay, thank you so much sir. I will fall back into Q4.
operator
Thank you. The next question is from the line of Palash Kavale from Nama Belt. Please go ahead.
Palash Kawale
Yeah. Thank you for the opportunity sir and congratulations on a good set of numbers. What was the contribution from advanced gold in volume and revenue terms?
Mangesh Chauhan
So 12% was for advanced gold in this quarter and value maybe you can calculate.
Siddharth Sipani
So and the advanced gold volume for the in terms of total sales it was 11 crores. 11 crores per se. The total revenue for the advancement.
Palash Kawale
So making charges.
Mangesh Chauhan
Making charges. We have got 11 cr.
Palash Kawale
Yeah. Right sir. Right. Got it.
Mangesh Chauhan
So 12% volume. Yeah.
Palash Kawale
Okay. Okay, got it sir. Thank you. Thank you for that. And so my next question is on. The vision to 2030 that you are going. You have given. So what kind of assumptions you’re taking in terms of volume and gold prices and are you going to add new product lines and customers and how would export look like? So some color on this. These assumptions would be really helpful.
Mangesh Chauhan
Yeah. So sure. We have taken many step in last four to six quarters. You can see we have added clients Aditya, Birla Reliance, Carrot Lane. And again in the subsidiary level Tanisha came. So these clients were not dead one and a half year back. So they are all on advanced gold model. So we have opened office in Dubai and we have onboarded D Das which is again a 67% holding of Damas. Sorry Damas only and 67% are holding of Titan. So many clients already we average right now we are holding every client of India or international major top client of Dubai, Singapore, Malaysia.
But not we are not into Europe and US market. So already we have onboarded clients Again product level we have launched nine carat and 14 carat again we have launched. We have grown diamond jewelry one year back, one and a half year back studied jewelry. We have already launched because of the fundraise we have done two times. So we were able to launch every category and growing in that. So we have taken every step for the product also. So now we are right now in. We are there in each and every product in the jewelry of gold jewelry or diamond Julia and we have.
We have each and every customer. So we have to just keep on going. Our wallet share. The sales are coming in the existing wallet share is increasing and new stores are coming. You can say 2,500 stores new coming of the all the brands in 18 months. So we are expanding our sales in that also. So keeping in mind to 30, 35% growth. We are giving this guidance. So from the existing client also. And again some new clients are also adding. So focus is. Focus is totally on corporates like Malabar Gold, Kalyans. Those are coming in listings.
Senko Tangamal, GRT Jewelry, Lalitha Jewelry and again skd Bima Groups and all. And again this corporate belt, Carrot Lane, Adit, Kevila Reliance and all. So we have introduced everything every product in the customers. So first is advanced gold business. We are concentrating much higher on that because now we are in the stage that we can attract much advanced gold from this last client. And second is on export side. We have opened office in Dubai and export is going to be at 20% as this quarter it was 10% or something. And we are expecting to go to 30% third is due to distributor level.
Also when we the moments of store we can serve directly. So we are appointing a region wide distributor model also and that will also help us to achieve the growth.
Palash Kawale
So sir, does this mean that distribution contribution in overall business could increase going forward?
Mangesh Chauhan
So right now it is 6535. You can see year on year we were a totally distributed model 12 years, 15 years back. And at corporate business is going up. So the percentage of corporate is going up. So you can see it will be distributed also will be at 30, 35% range and corporate will be at 65, 70% range risks.
Palash Kawale
Okay, sir. Okay. And so what about the working capital? How was the working capital by the. End of nine months?
Siddharth Sipani
So the working capital days as of September was 66 days per se. We have improved by 3 to 4% on, on our overall working capital days.
Palash Kawale
Okay, so yeah, that, that’s really helpful. And uh, that’s it from myself. All the best. All the best for upcoming quarters. Thank you.
operator
Thank you. The next question is from the line of Anushka Vora from Vimana Capital. Please go ahead.
Anushka Vora
Yes, hi. Thank you for the opportunity and congratulations on a great set of numbers. My question is what has been the nine month heap? Capex.
Mangesh Chauhan
Capex of nine months. In this nine month, what is the capex?
Anushka Vora
Yes.
Mangesh Chauhan
So around it is 35 to 40 crores.
Anushka Vora
Okay, 35 to 40 crores. And my other question was already answered by the previous person. But so in September your working capital days are 66 and you have now improved by 3 to 4%. Right. Can I get the split between receivables and inventory?
Mangesh Chauhan
So we were at 66 days,
Siddharth Sipani
now. We are at 60, 63 days,
Mangesh Chauhan
3 days. We have improved and we are expecting to go. Yeah, yeah. And we are expecting to go below 60 days because in the coming quarter you can see our advanced good business is rising and targeting it to go. Below 60 less
Siddharth Sipani
and further export business.
Anushka Vora
Okay, so by FY26 and you will be at 50 days of working capital.
Mangesh Chauhan
By what are you asking?
Anushka Vora
By end of this year you will be at below 60 days, right? Of working capital.
Mangesh Chauhan
Yeah, we are expecting to be below 60 days and we are expecting to be near neutral cash flow. Getting it to neutral cash flow.
Siddharth Sipani
So the focus at this point of time is to be cash flow neutral by March 26 and further to be cash flow positive in the upcoming financial year per se.
Anushka Vora
Okay, understood. Thank you so much. Thank you.
operator
Ladies and gentlemen. In order to ensure that the management is able to address questions from all participants in the conference please limit your questions to two per participant. Should you have a follow up question we would request you to rejoin the queue. The next question is on the line of Vaibhav Mishra from Finvestors. Please go ahead.
Vaibhav Mishra
Hello sir. Congratulations for the fabulous set of numbers. Sir, I have one first question is regarding the impact of gold prices on our margins. Like recently gold prices rose to 1.9 lakh and then. Then they corrected to 1.5 lakh kind of number. So this type of fall, can this affect our margins in any way or we are hedged to protect this kind of corrections in the goal sizes.
Mangesh Chauhan
Yeah. We are already hedge back to back and we are not exposed to any rate or risk. So we are not affected.
Vaibhav Mishra
All right. All right sir. And another question will be.
Mangesh Chauhan
Yeah.
Siddharth Sipani
In terms of the gross margin as I have informed in my earlier speech as well that our gross margin has improved per se mainly on three factors. One is on the advanced gold business increase and if we take FY24 as base we have improved by 2.3%. And this increase is mainly on three counts per se. First is the impact of gold loss reduction by by 1%. Then increase in the advanced gold business has led to improvement in the gross margin by around 0.6% and and further increase in the value added products like 18kt business. And the studded business which has got better margins have led to the overall improvement in the.
In the overall gross margin in nine months of FY26 versus FY24.
Vaibhav Mishra
Understood? Understood. And sir, the question would be regarding the volume growth that we are targeting for FY27. I think in Q3 we had 631kg per month kind of rate. So how do you see that in FY27 say in Q4 of FY27.
Mangesh Chauhan
We are now mainly focused on revenue because there are many carrot changes going on. 9 carat 14 karat 18k mix of 20. Earlier we used to sell 22 carat only. So there is there will be a mix of volume and revenue. Approximately we are expecting to be 750 kg average. And the revenue guidance we have given 8100 crore for the next year. And 750 kg on an average we are expecting mixed quarters. So focus is on 3035 revenue growth after that.
Vaibhav Mishra
So this will be this 7.50kg kind of number is for Q4 of FY27. Exit. Exit
Mangesh Chauhan
on an average. Okay. Total of on the fourth quarter we are telling exit may be higher. But on the average of Total of the year. We are telling.
Vaibhav Mishra
All right. All right. One, some last question, small question regarding the the guidance for FY27 in the investor PPT. You have mention that pat margins. You have mentioned around 4.25% but I think in FY26, nine months we have already clogged 4.4% kind of pat margin. So are we being the conservative or is there any other reason for 4.25% mentioned for FY27?
Mangesh Chauhan
We are just being conservative. We have given the guidance of 4.25 plus plus only but we are just giving a conservative number on the PPT 21st 20 path will be converted to operating cash flow. So it will be on I think good part.
Vaibhav Mishra
All right. Understood sir. Thank you so much sir and all the best for the future. Thank you.
Mangesh Chauhan
Thank you so much.
operator
Thank you. The next question is on the line of Smith Gala from SP RSPN Ventures. Please go ahead.
Smith Gala
Yeah. Thank you for the opportunity and congratulations on a great set of numbers. So in the presentation as well as in your opening remarks there was aspiration to become a global jewelry manufacturer. And that implies that you will be entering into markets other than Middle east and Gulf going forward. Also you have mentioned in the presentation you are looking for eu, UK and us. So are there any plans in place or any time period we are targeting to enter that markets Maybe one year, two year down the line.
Mangesh Chauhan
Yeah. So we are focusing mostly to Southeast Asia and Middle east because we have opened office and already we are serving from last four years to Middle East, Singapore, Malaysia and Dubai. But again in future, after one and a half year, one year we because opportunities are opened by our government. So un and Akash is dead from that background. He has signet and on this Costco and Walmart and all. So so we it will. It is very preparation period for them. So we will prepare one and after one year and we’ll enter after one and a half year to this market because this market needs very focused quality and concentration of the product and all.
And Akash is very. I will give a chance to Akash to speak about this.
Akash Talesara
Yeah. Hi sir. So just to give you a little bit of a gist that right now our groundwork is happening in terms of product development, in terms of merchandising, in terms of creating the correct mix to enter this market. As Mangesh by rightly said that once we are 100% prepared with our product line with the entire team ready to get into other markets. With my experience in the past with Signet and Different, different other corporates across the globe. We will be certainly looking out for entering those. Maybe, maybe from 5-28-29 is what we should be targeting as of now.
We have, we have enough opportunity in a domestic market right now which still has to be catered. So our first focus is definitely getting into the domestic market and you know, freezing those opportunity first. Once we are done with that, then the next step is certainly what you meant.
Mangesh Chauhan
So to answer you stately, we will be focused mostly 85, 80% on India because India is a huge market of 150 crore population and 15, 20% we can export to other countries like UAE and Singapore and the future Europe or US. So we will be not going as aggressively for 30, 40% or 50% exports because we majorly rely on India market 80%. So if there is any policy changes we can help get sales to India.
Smith Gala
That was very helpful. And any new markets as and when we are ready are always beneficiary. Secondly, to whatever guidance which we have taken for FY30 as well as FY27 and for FY26, 6100 crores. What is the base gold rate which we have assumed for that guidance.
Siddharth Sipani
We have assumed 1.04 crores as the gold rate on a blended basis per se. Because the mix of
Mangesh Chauhan
89, 22 and. Also 11051010 is our rate taken approximately. So we are seeing that this quarter also 18k is sold much. So there will be average mix of rates and all.
Smith Gala
So this is 1.05 or 1.1 lakh per 10 grams rate which is the base rate taken.
Mangesh Chauhan
Yeah. Yeah.
Smith Gala
Okay. Thank you. And are we on track to give the exit rate of 650kgs for Q4?
Mangesh Chauhan
Yeah, we already have done 6 30kgs this quarter and we are on track on that. Sure.
Smith Gala
Thank you. That’s all from my side and congratulations. Best of luck for the future.
operator
Thank you. The next question is from the line of Bharat Ginani from MC Pro Research. Please go ahead.
Bharat Gianani
Yes sir. Thank you for the opportunity. So. Two questions. First is we are targeting 20% of the EBITDA as the operating cash flow. So is that understanding right? I mean from the presentation. And secondly sir, so dividend we said that you know, we are targeting FY27 to be a cash flow positive year. So what is the kind of dividend yield that you are targeting? I mean what is the dividend payout ratio that you’re targeting compared to the earnings for FY27? That is the first question.
Mangesh Chauhan
So dividend amount will be very small amount. More more from commitment perspective. So as we have discontinuing from April to take the salary, so division amount will be very small in the initial to 27 in 27 March. Here we have lot of opportunity to grow. So that’s why division will be very smaller part.
Bharat Gianani
Okay, and so 20 of the EBITDA is being targeted as the operating cash flow, right?
Mangesh Chauhan
Yeah.
Siddharth Sipani
Yeah. Sorry, you are asking.
Bharat Gianani
Yeah. Yes. Yes sir, please go ahead.
Siddharth Sipani
Yeah. So basically we would be net debt free by 2030 and between 2630 to 2030 in on a sequential basis we expect that the cash flow generation to increase and we would be. We expect to reach 20% of OCF to PAT by the. By 2029 or 2030 maybe.
Bharat Gianani
No, sorry, I didn’t get the 20. So is it EBITDA to OCF or OCF 2 PAT? I mean just a. Just a bit of clarity on that.
Siddharth Sipani
That is the 20 that we are seeing is OCF to EBITDA.
Bharat Gianani
So so basically if so 20% of the EBITDA will be the operating cash flow. That is.
Siddharth Sipani
That is the right answer. That is what is our long term vision which we have outlined it as as Sky 3.0 vision statement.
Bharat Gianani
That is by FSAT. Okay, answer just a related question. I missed probably. So working capital. What. What it is currently expected in FY26 and by FY30. What is the working capital target that we are planning?
Siddharth Sipani
So basically we are looking at sequential improvement in the working capital cycle and that would be achieved by. By improvement in the profitability and by. By improvement in the working capital days. We expect that the overall working capital days should be less than 60 days going forward.
Bharat Gianani
And so currently what. What would be that number as of end of December I missed.
Siddharth Sipani
So as of September it was around 66 days.
Mangesh Chauhan
In December it is 63.
Siddharth Sipani
December it is 63 days.
Bharat Gianani
Okay. Okay. Okay. So thanks and all the best.
operator
Thank you. The next question is on the line of Raj Sara from Finvestors. Please go ahead.
Raj Sarraf
Yeah, thank you sir. And the conversation. First of all for this great set of number, can you please bifurcate your subsidy? Star Mongol super stocking chain and recently acquired I think Ghana and gold contribution in this 641kg volume per month.
Siddharth Sipani
Yeah, so basically for the, for the star it was for. For the star and for the newly incorporated SRG it was around 86kgs. For sparkling chains it was around 65 and for speed it was 51.
Raj Sarraf
Guidance. For next year utilization out of the our capacity and any concrete plan we are having on expansion with fund availability keeping our 2030 vision due.
Siddharth Sipani
Sorry, can you repeat your question? Not very clear.
Raj Sarraf
First of all so the guidance for next year utilization of our existing capacity and any concrete plans with fund availability keeping our 2030 reason in view.
Mangesh Chauhan
Yeah. Yeah. So after rainy season Diwali we are planning for that. We are into the planning phase and keeping the cash flow positive. As we guide for the path. We we are expecting to create more profits from the every year we are giving the guidance and that extra profit will take to that factory part of 50 crore per year. We need and be what we have guided. We are like this year we have guided for 225 crore. And already we have done 190 crore. So every year we are expecting some extra profits from all the subsidies and all.
And that will help us to plan our vision for factory and all. And keep in mind the vision of 2030.
Raj Sarraf
With the calculations are you. You might have done any calculation of achieving 18 to 19,000 crore revenue by FY 2030. How much working capital we need.
Siddharth Sipani
So basically on the overall working capital the target is to improve it and to move down below 60 days cycle per se. And the focus is to generate the cash flows and to improve on the overall cash flow generation and to improve on the OCF to EBITDA percentage year on year per se to reach 20% by 2030.
Raj Sarraf
So why I’m asking this question is sir, are we having any visibility of any further dilution in our equity base or any fundraise you are keeping anything.
Siddharth Sipani
So we are all nicely funded and we are guiding for cash flow. So we are not planning for any.
Mangesh Chauhan
Dilution at this point of time.
Raj Sarraf
Okay. Till 2030 we are not planning any dilution or any fundraise.
Mangesh Chauhan
Yeah. Yeah. So right now we are nicely funded. And again we are improving our working cycle. So we the fund needed will be from the internal across only for the business we are going doing right now.
Raj Sarraf
Okay. I’m just confirm. Confirming sir, you have taken this 18 to 19,000 crore revenue by keeping 18 karat gold in view at a rate of 1 lakh 5000. Am I correct sir?
Mangesh Chauhan
So yeah, it’s a mixed rate. 1 lakh 5000, 10,000 is a mixed race of 22, 18, 9 and 14.
Raj Sarraf
Okay. So right now we are having more exposure to 18, 18 carat or 22 carrots.
Mangesh Chauhan
So 22 is a leader in market. You can see 80% jewelry sold in 22G in India. It was 100% earlier so it get down to 80% and now we are expecting that 22 will come down to 70% or something of India and now we are at I think at 20%. 18 carat earlier we were at 4, 5% and 22 carat we were at 95%. Now it is 80%. So target will be much to grow 30, 35% revenue growth. Because carrot is like 9, 14, 18 and 22 all the mix we have 20 sale to the customers.
If the gold price shoots up then we will lower volume sales. Then target will be 35% revenue growth. But if gold prices drop then volume growth increases. So it’s a vice versa.
Raj Sarraf
Okay, just the last question if you please allow me Sir. Yeah sir this is recently concluded FDA with Europe and US. So this, this category will be duty free As I am saying just speculating by the news. So are we planning to explore those areas in Europe and US to to have advantage?
Mangesh Chauhan
Yeah doors are opened for us but we right now we don’t have the design and the the product that is needed in Europe and US because from last 15, 20 years we are focusing on India and 20% on UA in Singapore Malaysia where the clients are Asian customers only and the consumer and consumer are also Asian. So the European customers and US customers we have not made the product but now we have got the new standards back only of both the countries. And in going future it takes a time of one and a half year to plan and execute.
And our doors are open for the US and Europe market. But we’ll not aggressively go that because we have already opened Dubai office and we have taken orders of Titan Tamas can jewelry and many clients are onboarded right now in last four quarters we have to serve them and increase the wallet share in them. So right now our focus is to increase the wallet share in the existing customer. Large customer. We have onboarded in India also in Dubai and Singapore Malaysia also main focus is in this country and going for future when one one we will see if we are going to penetrate in that country.
But we are positive over that.
Raj Sarraf
Still trying to have Tanishka on board or.
Mangesh Chauhan
Already we have onboarded in our subsidiary Star Mangasutra and we are getting 50kg on an average advanced gold business from Titan. Expecting good business in subsidy from that from Kanishka.
Raj Sarraf
Thank you sir. Thank you. Thank you very much.
operator
Thank you. In the interest of time this will be the last question. I would now like to hand the conference over to the management for the closing comments.
Mangesh Chauhan
Thank you so much. My shareholders, investors and my management team. And again my brothers Darshan Bhai and Nandarbhai who has supported this in this journey and hoping to grow more in future. So thank you all of you. The investors and shareholders of Sky Golden Diamonds.
operator
On behalf of Sky Gold and Diamonds Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.