Sky Gold Ltd (NSE: SKYGOLD) Q2 2025 Earnings Call dated Nov. 19, 2024
Corporate Participants:
Mangesh Chauhan — Managing Director and Chief Financial Officer
Analysts:
Parth Patel — Analyst
Palash Kawale — Analyst
Bhavik Shah — Analyst
Unidentified Participant
Mihika Joshi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Sky Gold Limited Q2 FY ’25 Earnings Conference Call. [Operator Instructions]
I now hand the conference over to Mr. Parth Patel from Orient Capital. Thank you and over to you, sir.
Parth Patel — Analyst
Thank you, Neha. On behalf of Orient Capital, I welcome you all to Sky Gold Limited’s Q2 FY ’25 and H1 FY ’25 earnings con call. From the management side, we have Mr. Mangesh Chauhan, Managing Director and Chief Financial Officer; Mr. Jayesh Sanghavi from the Finance team; and Ms. Nikita Jain, Company Secretary. I hope everyone had an opportunity to go through our investor deck and press release that we have uploaded on exchanges and 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 beliefs, opinion and expectations as of today. These 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 and Chief Financial Officer
Thank you, Parth. Good morning, everyone. Thank you for joining us today as we discuss our Q2 FY ’25 quarterly performance.
Q2, company recorded its highest ever quarterly revenues and PAT, showing resilience and strength. Revenue for the quarter stood at INR768.8 crores, registering a growth of 94% year on year. PAT stood at INR36.7 crores, registering a remarkable growth of 405% year on year.
The Indian jewelry market valued at approximately $90 billion. The growth outlook for the coming years is encouraging, with gold jewelry expected to expand by 12% to 15% annually. Organized jewelers are increasingly adopting a franchise model expansion model, especially to capture the untapped potential in Tier 3, 4 cities. The franchise model involving FOFO model, franchisee-owned, franchisee-operated and FOCO model, franchisee-owned, company-operated, structures allow them to scale faster and open double the stores compared to the traditionally company-owned model, all while minimizing the debt exposure.
Key factors such as stock market volatility, a strong wedding season and economy stability are driving demand. The demand drivers within the jewelry categories are segmented further by occasions such as wedding, festive and casual. Notably, the casual jewelry is witnessing faster growth due to its lightweight appeal and design variety, resonating well with the younger generation.
Discussing our performance this quarter, we are delighted to report positive demand from the ongoing festival season and the upcoming wedding season also shows promising strength. Additionally, I am excited to announce a significant milestone in our company’s journey, as we have successfully raised INR270 crores. This investment will be strategically allocated across broadening our product portfolio, with expanded offerings in 18 carat gold and diamond jewelry to align with evolving customer preferences. Increasingly, capital infusion into our subsidiaries, Starmangalsutra Private Limited and Sparkling Chains Private Limited, which positions us to tap into increased TAM of 65%. To meet increasing demand, we are enhancing our organization capacity by adding skilled designers, artisans and experts across sales and merchandising and design.
On the global front, we are targeting key international markets, including the Middle East, UAE, Singapore and Malaysia, to establish a strong presence. Additionally, we are actively pursuing acquisition opportunities to further strengthen our market position and accelerate growth.
Our FY ’25 revenue guidance stands to — at INR3,300 crores, which includes INR2,700 crores from our core operations and additional INR600 crores from our subsidiaries, which we acquired recently. For the current quarter, the contribution from subsidiaries was very limited and Q3, you can expect inflows on a full quarter basis. This quarter, our monthly production volume averaged 345 kgs, significantly from 250 kg per month last year, making a robust 38% year-on-year growth. Exports also made a healthy contribution with sales increasing to INR63 crores — INR63.9 crores, accounting for 9% of our total quarterly sales.
As mentioned earlier, we are continuously building and strengthening our core team. I’m pleased to welcome Mr. Akash Talesara as our new President of Sales & Business Development. With over two decades of expertise in gems and jewelry sector, Akash brings a wealth of industry knowledge to our team. We are confident that his leadership will help us to achieve new milestones and unlock fresh approaches. Akash will be instrumental in onboarding new clients domestically as well as internationally.
Now I will discuss the Q2 FY ’25 financial performance. The consolidated revenue for the quarter stood at INR768.8 crores versus INR396 crores in Q2 ’25 [Phonetic], thus registering a growth of 94.2% year on year. The gross margin was 6.5%. EBITDA for the quarter was INR38.3 [Phonetic] crores compared to INR15.3 crores, showing a growth of 154%. EBITDA margins for the quarter stood at 5% as compared to 3.9% in Q2 ’24, improved by 109 basis on a year-on-year basis. PAT for the quarter stood at INR36.7 crores as compared to INR7.3 crores in Q2 ’24. PAT margins for the quarter stood at 4.8 crores [Phonetic] as compared to 1.8% in Q2 ’24, hence improved by 294 basis on a year-on-year basis.
Moving to the H1 ’25 financial performance. The consolidated revenues H1 ’25 stood at INR1,491 crores versus INR771 crores in H1 ’24, versus registering a growth of 93% on year-on-year basis. The gross margin was 6.4%. EBITDA for H1 ’25 was INR76 crores compared to INR33 crores, showing a growth of 125%. EBITDA margin for H1 ’25 stood at 5.1% as compared to 4.4% in H1 ’24, improving by 70 basis on a year-on-year basis.
PAT for H1 ’25 stood at INR57.9 crores as compared to INR17.9 crores in H1 ’24. PAT margins in H1 ’25 stood at 3.9% as compared to 2.3% in FY ’24, hence improving by 156 basis year on year. We have achieved a strong half — first half, laying a solid foundation for continued growth in H2. We aim to achieve 7 points to 8 points gross margin through optimized product mix and exports while maintaining a long-term EBITDA margin of 5% to 5.5%. A key driver for PAT margin expansion will be reduced interest cost and we initiated the utilization of gold metal loans, which we have meaningfully impacted on our interest cost moving forward.
I now open for the floor further questions.
Questions and Answers:
Operator
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Palash Kawale from Nuvama Wealth. Please go ahead.
Palash Kawale
Thank you. Thank you, sir. Hope I am audible?
Mangesh Chauhan
Yes, sir. Yes, sir.
Palash Kawale
Sir, congratulations on recent fund raise and very good set of performance in the quarter.
Mangesh Chauhan
Thank you, Palash.
Palash Kawale
Yeah. Sir, my first question is what kind of run rate are you expecting from your acquired entities in upcoming quarters in terms of volumes?
Mangesh Chauhan
So we are expecting a totally blended INR1,000 crores revenue in the next quarter. From parent company, INR700 crores, INR750 crores, what we are going by the run rate; and from the subsidiaries, INR150 crores to INR250 crores. So next two quarters, we are expecting a blended, subsidiaries, of INR1,000 crores.
Palash Kawale
Okay. And sir, how is the demand — is there a pickup in the upcoming quarter, like Q3, is there a pickup on account of wedding — strong wedding season that is expected?
Mangesh Chauhan
The only question is all our clients has given the outlook is very good for the wedding season as rates are also down by 5% of the gold rate. Gold rate was at INR81,000. It has come to INR76,000. So it is helping to boost the sales and already, I told in my interview also that East India is having 4.8 million weddings in this year and 25% more weddings are happening in this quarter, which will generate $6 million revenue. So jewelry is contributing 25% of this and 75% of garments and all other events and all. So there’s a huge wedding ahead in January, February. So we are getting orders in this quarter for the weddings. And December also wedding is going on. So there’s a good demand, as per the feedback from our client and retail corporates, we are very much positive on this, and growth is good.
Palash Kawale
Okay, sir. Thank you for that. And sir, what is your outlook for gold prices in the next one year?
Mangesh Chauhan
So quarterly gold prices are spiked by 20%, 25%. So the industry is hoping that it will go stable for next two, three quarters, I think it was already in two quarters, it jumped to 20% — two, three quarters. So industry is hoping that three, two quarters will go to stable and then again, it will start rising.
Palash Kawale
Okay. Okay. And sir, how many employees are there now in Sky Gold? Like could you give the employee count at end of FY ’24, by the end Q2?
Mangesh Chauhan
So we — by end of ’24, we were at 500, 550 employees. Now we are at 650 employees at Sky Gold parent company. And subsidiary, we are at 150 to 180 employees at both the subsidiaries. So together, we are at 800 employees. So 150 employees [Indecipherable]
Palash Kawale
And sir, any plan to add more employees in this year?
Mangesh Chauhan
So as and when required, we are keep on adding some because as our turnovers are growing and volumes are growing, as orders are coming. We have added CaratLane also and P N Gadgil also and as clients are also adding. As and when required, we will add. But now we are okay with 650 employees here.
Palash Kawale
And sir, was there a contribution from these two clients in our Q2 volume?
Mangesh Chauhan
Yeah, CaratLane contributed some, some part came in this quarter, December quarter, and some part came in next quarter. So we are initially started with them with some products. So now we are supplying 1% or 1.5% of the revenue. But in these two, three quarters, we will grow with them.
Palash Kawale
And sir, these two clients, how much volume can they get — can they add, just a number if you could provide?
Mangesh Chauhan
So CaratLane is about — we generate making charges bill. We do labor job on them. We don’t want to invest our capital and we don’t want to invest in inventory and debtors for them, because they give their bullion raw material to produce. So it will add up to our gross margins very much. And P N Gadgil is from our inventory. So I think P N Gadgil can add up to INR50 crores, INR100 crore sales to our sales. And it also can give us a 600 — monthly volume of 58 kgs or something. So we are at 350 kgs, so we can add 50 kg volumes by CaratLane I think in two quarters.
Palash Kawale
Okay, sir. Thank you. And sir, my last question is what constitute of debt is GML now?
Mangesh Chauhan
So we were at 10%. We have — we were last quarter at 10%. We have moved approximately to 20%, 22%. So this quarter, we are trying hard, because some banks have other policies. So I think by December quarter, we will be at 60% — 50%, 60%. So already, we have come to 20 — last quarter, we were at 10%. Now we are running at 25% GML this quarter. So by December quarter, 60%, 65% will be at GML, yeah.
Palash Kawale
And sir, this can go up to 80%, 85%, right, at a peak?
Mangesh Chauhan
80% is allowed, 80%, 85%. 10%, 15%, we cannot go on [Indecipherable] we can go. So major bankers are in proposal. So we are expecting by December, 60%, 65%, we’ll use.
Palash Kawale
And sir, what is the cost of debt for these gold metal loans for us?
Mangesh Chauhan
So it is ranging from 2.75% to 3%, blended [Indecipherable] with other costs and all.
Palash Kawale
So blended 3%. Okay.
Mangesh Chauhan
Yeah, yeah.
Palash Kawale
Okay. Sir, that’s it from my side. Thank you for the detailed answer and all the best for the upcoming wedding season. Thank you very much.
Operator
Thank you. The next question is from the line of Bhavik Shah from Arihant Capital. Please go ahead.
Bhavik Shah
Hello. Am I audible? Hello.
Mangesh Chauhan
Yeah, yeah, yeah.
Bhavik Shah
Yes. One question from my line is on the working capital cycle. Can you explain about the inventory days that you have currently for the September quarter?
Mangesh Chauhan
Okay. So we are at [Indecipherable] working capital cycle is at 75 days approximately.
Bhavik Shah
Okay, yeah. All right. So if I look at the cash conversion cycle of March ’24, it was roughly around 78 to 80 days and currently it is 75 days, right?
Mangesh Chauhan
Yeah, yeah, yeah.
Bhavik Shah
All right. And one more question on the stand-alone Sky Gold. Do you expect to open any retail chain in the coming years?
Mangesh Chauhan
No, right now, we are focusing totally on B2B manufacturing. So we have already added two subsidiaries. So we are into 65% — which is sold in the early days. So we have good scope in clients are adding — new clients are adding. We are expecting to add new clients in this quarter also. So there is a huge scope here. So right now, we are not in a mindset of retail.
Bhavik Shah
All right. And some — two questions on the subsidiary part. Can you please explain about the EBITDA margin that the subsidiaries are currently earning?
Mangesh Chauhan
Your voice is breaking. Can you repeat the subsidiary question?
Bhavik Shah
Yeah. Can you explain on the EBITDA margin of the subsidiary companies that you recently acquired? How much they are earning?
Mangesh Chauhan
Yeah. So EBITDA is — for subsidiary, it was 4% — 4.5%. So next quarter [Indecipherable]. This quarter, it was about, I think, 50 days or something, is added to our company, because we acquired it in September 5th or 6th only. So now December quarter, the revenue will also have profit to it. They were at 4%, 4.5% EBITDA. So we are also expecting them to take into quarter two, 5%, 5.5% EBITDA, because we have increased already the fund base amount, some amount in both the subsidiary and we have started launching some new verticals and new designings in that, so we can create margins.
Bhavik Shah
[Indecipherable] And if you can give some sales estimates for next two, three years on the subsidiary side, if you can?
Mangesh Chauhan
Yeah. Already, we have given a blended of INR3,300 crores this year and FY ’27 is INR6,300 crores or INR1,300 crores from subsidiaries and INR5,000 crores from the parent company.
Bhavik Shah
All right. And on the capacity front of the subsidiary, what is the current capacity utilization from the subsidiary companies?
Mangesh Chauhan
Subsidiary companies had about 30%, 33% utilization, both the subsidiaries, 30%, 33%.
Bhavik Shah
And you plan to ramp it up, up to 70-, 80-odd percent?
Mangesh Chauhan
Yeah, yeah, 100%. That’s why we have infused capital also in that and we are ramping up because we have already — we have designers, manage — production heads and all such. We have to add to the [Indecipherable] where it is. Clients are already onboarded same as Sky Gold. So whatever client is added in Sky Gold, we are adding in the subsidiary also. So this we have to accelerate. So we are on that point only.
Palash Kawale
Okay. And last question on the Sky Gold stand-alone only. What is the current capacity utilization of Sky Gold stand-alone?
Mangesh Chauhan
So we are at 44% right now, 44% or 45%.
Bhavik Shah
All right. All right.
Mangesh Chauhan
Sorry. My pardon. 46%.
Bhavik Shah
46%. All right. Yeah. Thank you. Thank you. And all the best.
Mangesh Chauhan
Okay. Okay. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Raj Saraf from Finvestors [Phonetic]. Please go ahead.
Unidentified Participant
Sir, good morning, sir. I congratulate you on this very good set of numbers. Sir, just wanted to know, sir, how this wedding season is panning out?
Mangesh Chauhan
So weddings, earlier question I answered the same already. The wedding season is very good in India. I think 25% more weddings are there, the highest of the history, as per our clients and corporates they are telling. So 25% more weddings are happening in India and a very good season. And rates are also helping us because gold rates are down by 5%. So the atmosphere is good for buying. And the retail portfolio, it’s very good for the inventories for gifting in the wedding and for brides and grooms and all. So it’s very good orders we are receiving for the wedding season.
Unidentified Participant
Okay, sir, just this year guidance, when you just — I think I missed that. INR3,300 crores including subsidiaries, am I correct, sir?
Mangesh Chauhan
Yeah. So INR2,700 crores from the parent company and INR600 crores from the both subsidiaries.
Unidentified Participant
Okay, sir. And sir, export is now 9%, sir. So how we are planning to just raise export volumes or export revenues, what are your plans, sir?
Mangesh Chauhan
So we were at 1%, 2% last year. So now we are at 9%, 10%. So — we easily in India only for 80%, 85%, we will take export to 15% to 20% or 17%, 18%, not more than that. So we are concentrating in Malaysia, Singapore and Middle East countries like UAE, Qatar, because our jewelry design and our vertical suits for the Middle East and Asian countries. We — our products are not for Europe and U.S. countries. So we have already appointed an International Sales head, Akash Talesara, who has joined us, who has 20 years’ experience of the industry. So we have appointed him Vice President for the sales. So he’s now — he’s joined from 5th Nov., he’s looking about the exports and domestic also. So we are expecting the export to take to 15% right now.
Unidentified Participant
So 15% by a year or so. When you are targeting, sir, by next year, this year?
Mangesh Chauhan
So I think this year, we’ll be at 12%, 13% and next year, we’ll be at 15%.
Bhavik Shah
And what is the margin profile in exports, sir?
Mangesh Chauhan
So exports gross margins are blended 6%, 6.5% or 7% also. So blended, it’s come to 6.5% approximately.
Unidentified Participant
Gross margin, 6.5%?
Mangesh Chauhan
Yes, yes.
Unidentified Participant
Thank you very much for answering my questions, sir. We are growing very nicely here, sir and congratulations once again to posting these excellent numbers. And sir, one thing I’d ask, sir, other income was very high — on higher side. So can you please explain this?
Mangesh Chauhan
So we had some — five years back, we had some shares of HDFC Bank, TCS shares. We have placed to the banks against that, we have taken the debt. So we have replaced them with the FD. As a major listed company now, we are not in the position of — we don’t want to keep any shares in the balance sheet, so as advised by our advisers. So we sold our bank shares this quarter. So this way, other income came, so it’s a onetime income. And next quarter also, some shares are pending with SBI Bank, other shares we have already sold. We have replaced by FD, collateral with the bank. So with SBI, we have INR35 crores of shares, something. In this quarter, this will also be sold. So there will be no shares in our balance sheet. That’s why other income came.
Unidentified Participant
[Indecipherable]
Mangesh Chauhan
HDFC and TCS shares we bought five to six years back. So we sold all this thing, [Indecipherable]] company only. So that’s why the income came for that.
Unidentified Participant
Okay. So going forward, so this is only [Indecipherable] offset?
Mangesh Chauhan
No, until December quarter, we have some shares we will be offloading in December quarter also. So going forward, this other income will be not there.
Unidentified Participant
Yeah. Okay. Thank you very much, sir. Thank you.
Operator
Thank you. Ladies and gentlemen, we have lost the management line connection. Please stay connected while we reconnect them. Thank you. Ladies and gentlemen, thank you for patiently holding. We have the management line back on the call. Thank you. The next question is from the line of Mihika Joshi from Vimana Capital. Please go ahead.
Mihika Joshi
Hi. Can you hear me?
Mangesh Chauhan
Good morning.
Mihika Joshi
Hi. Congrats on great set of numbers. So I just had one question on your volume guidance. So what is the overall volume guidance for FY ’25?
Mangesh Chauhan
We are expecting [Indecipherable] per month going up to 375 kg to — until FY ’27…
Mihika Joshi
Sir, your voice is not clear. Can you repeat, please?
Mangesh Chauhan
Okay, I will repeat once again. So we are expecting [Indecipherable] kgs per month — in H1, and we are — 375 kg, 400 kg per month until end of the year. And by FY ’27, we are expecting to go to 750 kg per month.
Mihika Joshi
Okay. So for FY ’26, what is the guidance?
Mangesh Chauhan
Pardon. Can you repeat?
Mihika Joshi
What is the volume guidance for the FY ’26?
Mangesh Chauhan
So by FY ’26, it will be 550 kg to 600 kg per month.
Mihika Joshi
Okay. Okay. All right. And I just have one question on gold metal loans. So given the potential risk of fluctuating gold prices, what is your strategy around gold metal loans? And how are you planning to mitigate the impact of price increases on repayments? So what is the strategy and how does it work?
Mangesh Chauhan
Yes. So already, our inventory is totally hedged in the MCX, which is available in India to hedge. So we are — our inventory is already hedged and we hedge every sell and purchase overall on a daily basis in the hedging platform of MCX. So whenever GML comes, so our hedging part will be lower, but we have to hedge after the sales. So now we have to hedge totally inventory. The GML is the part they give us on the approximate rate basis. So whenever we sell to the customer, we have to once again hedge. So we follow every hedging system now, when it’s available in the CC also. And we’ll be in the GML also, we will hedge everything. So we have hedging policies, so we don’t gain also when the gold rate goes up and we don’t lose also when it goes down.
Mihika Joshi
Okay. Got it. Okay. Yeah. That’s it from me. Thank you.
Operator
Thank you. The next question is from the line of Abhinav Sharma from Tara Capital [Phonetic]. Please go ahead.
Unidentified Participant
Hello. Am I audible?
Mangesh Chauhan
Hello. Yeah, sir. Good morning, sir.
Unidentified Participant
Good morning, sir. Congratulations on the great results. I wanted to ask if you share numbers for the studded ratio.
Mangesh Chauhan
Studded ratio. Okay, okay, okay. I think, can you — you can send your — I don’t have with me and I will mail you, sure. So you can send the team your mail ID and all.
Unidentified Participant
Okay, okay. And do you think the studded ratio is increasing and…
Mangesh Chauhan
Yeah, studded and 18 carat we are increasing. And we have increased the amount for 18 carat and studded only. So in this December quarter, so you will see that our studded and 18 carat is increasing. So little bit there increase in the quarter, but I think I missed one page. So I will send you.
Unidentified Participant
Okay. Okay. Thank you. Thank you. That’s it from my side. All the best.
Mangesh Chauhan
Yeah. In through the call, I’ll get in five minutes. I will announce in the call.
Unidentified Participant
Please go ahead. Sure. Get in touch with me. Thank you.
Operator
Thank you. The next question is from the line of Krishna from Capitalmind [Phonetic].
Unidentified Participant
Hi, sir. Am I audible?
Mangesh Chauhan
Yes, sir.
Unidentified Participant
Yes, sir. So my question is on the new client acquisition [Indecipherable]
Mangesh Chauhan
Yeah. Pardon.
Unidentified Participant
My question is on the new acquisition — client acquisition trend. Since now we have — we had onboarded CaratLane, which is a subsidiary of Tanishq. Any progress we see on Tanishq trend?
Mangesh Chauhan
So we are on it. Already, Akash Talesara, a Vice President, also joined us. He will help us to onboard. And we are continuously showing them products and approaching them. So as and when required, we’ll inform the exchange and shareholder also when we onboard them. But we are very much into it and we are targeting them.
Unidentified Participant
Sure. Thank you, sir. Also, any other major clients you are targeting…
Mangesh Chauhan
So onboarding CaratLane will help us to achieve the target faster because the performance of CaratLane will speak of our product portfolio.
Unidentified Participant
Right, sir. Great. Sir, also, sir, any other major clients you’re targeting in the Middle East or Singapore, etcetera?
Mangesh Chauhan
So already, we are working with Jwala Jewelry, who has 300, 400 stores, other corporates like Joyalukkas, Malabar Gold [Technical Issues]
Operator
Ladies and gentlemen, we have lost the management line connection. Please stay connected. Thank you. Ladies and gentlemen, thank you for patiently holding. We have the management line back on the call.
Unidentified Participant
Hi, sir. Am I audible?
Mangesh Chauhan
Yeah, yeah.
Unidentified Participant
Yeah. So my question was on any new client acquisition in the Middle East or Singapore areas?
Mangesh Chauhan
Right now, we have — already, we acquired in last March quarter already. So we are into it. So we are targeting who has 10 to 15 and 20 stores, who are mid and small corporate and going to be large corporate in two, three years. So we are on it. So already, we have one vice [Indecipherable] already. So I think we’ll be acquiring some new clients in December quarter.
Unidentified Participant
Got it, sir. Got it. And one last question. Can you please provide any guidance on the margin strength, both EBITDA and PAT? I can see the PAT, you had mentioned around 3% as growth guidance — I mean, guidance, margin guidance. Anything on the EBITDA side, please?
Mangesh Chauhan
So gross margins, we are expecting to be at 6%, 6.5% relatively, and EBITDA margin is 5.5%, between 5% to 5.5%.
Unidentified Participant
This is FY ’25?
Mangesh Chauhan
’25, yeah.
Unidentified Participant
FY ’25, okay. Okay, sir. Thank you. That’s it from my side. All the very best.
Operator
Thank you. The next question is from the line of Srinath Krishnan, an individual investor [Phonetic].
Unidentified Participant
Yeah. Good afternoon, sir. Congrats on the strong performance. My question is on working capital management. So in March quarter, your complete total working capital was around 67 days. I’m talking of stand-alone. Now it has improved to 57 days. But it would have been better if receivables had not increased by six, seven days, you would have gone down to nearly 50 days, close to 30% improvement in working capital. What really happened in receivables, sir?
Because in the past, you have mentioned about moving towards cash and carry, having a — you generally operated at 16, 17 days, but now you have increased to 26 days. What did happen in receivables and can we get back to the old days of 16? Because now the inventory is close to 30 days inventory. It has been managed well despite a 40% increase in sales. From March to this period, the inventory has remained stable, but receivable has spiked. So will receivable days also come down going forward?
Mangesh Chauhan
So 100% this quarter, you can see the gold rates was very high in this quarter, by 20% in two quarters. So we have to give some leverage to the customers because seasons were on and gold rates were [Indecipherable]. We have given some leverage to the customer of five, six days or seven days, consideration of being a gold rate high. And so despite that, in the coming quarters, we will be back to seven days, because as you can see, we have added CaratLane, who has given us their raw materials. So we are adding new clients of cash and carry, much like P N Gadgil, as 15 days. So we are adding a client which have a rate of 10, 15 days. And cash and carry, we are not getting new clients of 30 days or 40 days or 20 days. Old clients like Kalyan Jewellers and all, we have 30 days and we have — so we have — we are continuing them because they are our large clients.
But blendedly, it will come down. In this quarter, you can see rates were very high. So we have given the leverage to the clients of seven, 10 days because of the [Indecipherable] a little break in the footfalls and the [Indecipherable] down for a period of 20 [Indecipherable] customers were — to the normal [Indecipherable]. So that’s why we were at a higher receivable days. But in coming two quarters, you can see we are [Indecipherable].
Unidentified Participant
Okay. So — but also, your exports have a lower receivable days, right, because with improving export mix, if my understanding is the export receivables are also very less.
Mangesh Chauhan
So exports are already very less, but we are at 9% — 91% is from the domestic. That’s why our receivables days were a bit high, because the domestic percentage is very high. So I think this December quarter rates are also down…
Unidentified Participant
And sir, over long term, since you guided that exports will become 20% of sales, directionally, higher export mix will also…
Mangesh Chauhan
Exports also help us to down our receivable days, because exports are cash and carry much business. And it’s about seven to 10 days. So as exports goes up, our receivable days will blendedly come down also.
Unidentified Participant
Great, sir. And also, you have mentioned in the past that with GML, you would be able to reduce your interest cost by half. I guess what you meant was interest cost was around 1% of sales. It will come down to 0.5% of sales. So with the funding — QIP funding that you have received, logically, it should come down further. So with 5%, 5.5% margin, you are an asset-light business, depreciation is very less. So we should move towards 4% PAT margin over the three to four quarters? So is that a possibility?
Mangesh Chauhan
So we are first targeting to 3.5% by reducing our interest cost. We got a little bit later for GML because of the bank policies and all. But I think we’ll be at 50%, 60% of GML by December quarter and 80% by March quarter. We were targeting to be at 80% GML by December quarter already. And because of bank policies, so we are a little bit late, but I think we will reduce the cost by 0.5%. So we are — give a guidance of 3.5%. But going forward, in FY ’26, ’27, we will target 4%, 100% will go up to 4%.
Unidentified Participant
Yeah, yeah. Long term I’m asking. Yeah.
Mangesh Chauhan
Yeah, long term, we can — we are targeting to go because we have — we are adding — we have already added a vertical of studded jewelry, 18 carat gold jewelry and many other — we are planning from FY ’25 to add some modernized jewelry, which is winning in the market, and we are including the lab-grown also, is going — market is — buzz is very there, like go after March quarter, we are planning for lab-grown also. So blended with this, all will add up and being up to 4% PAT. So in long term, FY ’26, we can go up to 4%.
Unidentified Participant
Sure. Sir, the initial commentary of yours, you spoke about an important hire in the company. Apart from this, what are the future hires and where would you be strengthening your organizational structure, in which departments? And in a recent TV interview also, you spoke about building an app where the customers can order real time. If you could speak about that, that would be very helpful.
Mangesh Chauhan
So coming back to the hiring, we have already — last two, three quarters, we have hired a Production head. A Merchandising head is coming. Akash Talesara has already — we announced that he has joined as a Vice President of Sales and all. So back end, we have hired already two, three major hiring. On front end also, we have hired a major hiring of [Indecipherable]. Now we are targeting our CFO. We are already — we have already hired one CFO, but some of the reasons, he was not able to join because of his earlier company. So now we — once again, we are hiring of CFO. Soon, we will be announcing our CFO. And we are targeting to take two members of the Board. Already, we have on the finalizing state of one Board member. We’ll announce in 30 days, I think. And second [Indecipherable] So our main target is to take one CFO and two Board members. And they are Board members who are from jewelry backgrounds, some good backgrounds and who have experience of 25, 30 years, and which can add to our company’s strategic futures. So this is on the hirings.
Other question was, I forget — about the app. So app, we have already started with the app, but it is on a trial basis. I think by December quarter, it will be live totally. So it will help the purchase manager of the stores, the sales heads and all can see each and every vertical and products and they can online order. Nowadays, corporates are trying to order daily basis, as well it’s 20, 30 inventory, so they want to order from each and every store daily basis. Malabar is going on [Indecipherable] Kalyan also trying to compete that basis. They want to order daily basis, 365 days. They want to order and they want to take delivery of 365 days from us after 20, 25 days, when it is — what is our inventory time.
So we have already made that. Akash is also looking for the app to launch. So app will be launching in December. I think the app. And it will help us to accelerate our sales and customers will get a visualization of the product, which are the vertical, what are the wait range, what are the inventory budget for that [Indecipherable]. So that will help us to reach each and every store, which we are targeting.
Unidentified Participant
Understood. Congratulations sir. Thank you, again.
Mangesh Chauhan
Thank you so much, Srinath.
Operator
Thank you. The next question is from the line of Palash Kawale from Nuvama Wealth. Please go ahead. Mr. Palash, your line has been unmuted, please go ahead with your question. As there is no response from the current participant, we’ll move on to our next participant, which is from the line of Pravin Desai, an individual investor [Phonetic]. Please go ahead.
Unidentified Participant
Yeah. Good morning, sir. Congratulations for the results. You have declared a bonus for one and nine, but until now, you have not disclosed the record itself. Is it there or not?
Mangesh Chauhan
100% bonus is there and as and when required, our CS team, Secretarial team and all the team will announce more what is the procedure. They will properly, and they will announce the adjustment required, the record date and the shares will be coming to your demat account. So 100% bonuses and so, at 100%, you will receive the bonus shares.
Unidentified Participant
But it will be in the proportion of one and nine, isn’t it?
Mangesh Chauhan
Yeah, you will get nine shares for one share. So — but about the dates and all, this is not in my scope. So the Secretarial team and all will do the needful and soon you will receive record date and the shares also.
Unidentified Participant
But can we sustain the — such a high equity with this type of profit?
Mangesh Chauhan
What are you asking about? Can you give — pardon — sustainable?
Unidentified Participant
Can our company sustain this huge capital [Indecipherable] bonus as one and nine, profit of — profit, what we are booking? Yes, in future, we are going very good, but will it sustain the capital — I think capital will be at near about INR130 crores.
Mangesh Chauhan
So already, we are at the reserves of INR500 crores with the subsidiary in the company.
Unidentified Participant
[Indecipherable] Yeah. Go ahead, sir.
Mangesh Chauhan
So I think — thank you, sir. so already, we are at INR500 crores reserve. I think it is a good decision and sustainable. So I’m not getting the question properly, but you can send it, the question also, we can reply on the mail.
Unidentified Participant
No, no. My question is simple, sir. With this such a huge bonus, our equity will go from INR13 crores to INR130 crores like that, isn’t it?
Mangesh Chauhan
Sure, sure. So we have done this because the retail investor can find it easily to enter the — so they can invest in our shares because the price was very high. So sustainable is no problem.
Unidentified Participant
So far the profit is concerned, I’m mind to say the liquidity will be very good. But so far our profit is concerned, will it sustain the equity? What I mean to say, sir.
Mangesh Chauhan
Yeah. 100%, our profits are good. I think this quarter is also good, and we have given the guidance of ’25, ’26, ’27. So we are on it. We have added the clients, the profits are going to come its own path.
Unidentified Participant
Okay. Thank you very much, sir. Best of future.
Operator
Thank you. The next call of question is from the line of Palash Kawale from Nuvama Wealth. Please go ahead.
Palash Kawale
Yeah. Hope I’m audible this time. Hello?
Mangesh Chauhan
Yeah.
Palash Kawale
Yeah. Sir, what was the contribution from 18 carat gold segment?
Mangesh Chauhan
It’s grown up, but earlier, also somebody asked me, but I did say I will send you, Palash, a mail.
Palash Kawale
Okay, Okay. Thank you. Thank you, sir.
Mangesh Chauhan
Apologies for that, yes.
Operator
Thank you. The next question is from the line of Prakash Chandilia [Phonetic], an individual investor. Please go ahead.
Unidentified Participant
Very good morning, sir. Thank you very much for giving me opportunity. And congratulations for outstanding set of numbers. Most of questions have already been answered, sir. My question is regarding geographic expansion. What is the primary risk in entering a new international market? And how does the company plan to mitigate it, sir?
Mangesh Chauhan
So exports is mostly cash and carry business. So there is no risk. Exports policies are very good in this government. Earlier, there was very difficulty in the exports and all. Documentations were very high. The last five to 10 years, exports is very easy to do. We can get export metal very — daily in, daily out, 365 days, we can get export metal. So like customers like Joyalukkas, Kalyan Jewellers, Malabar Gold, Renewed and AAA-rating, AA-rating customers, we give credit of seven to 10 days. But other than that, we do cash and carry business with them. So there is no risk. We don’t take any risk or credit for the customers internationally.
Unidentified Participant
So my next question is, what is the company’s plan to address the competition from organized or unorganized sector?
Mangesh Chauhan
So I think we are also manufacturing. Others is shifting from unorganized to organized. We are the second number in the casting jewellery in India. We are the largest manufacturer in Maharashtra with 80,000 square feet. So we — our business is shifting to organized one. They want good quality with differentiation of design. We are making different verticals for the customer, particular customers like CaratLane, we — which came up with aesthetical designs, with especially mono-color designs for them. So we — they rely on us, because as a renowned company, they rely on us, designing secrecy, concept, different trends for different customers. Concepts are different from other unorganized manufacturers. Unorganized manufacturers don’t have infrastructure, skilled architects, designers, skilled workers. And of course, about the technology, we have German, Italian technology we have, differentiate us from them.
Unidentified Participant
Okay. Sir, my last question is in our recent profit growth, is there any plan to revise the dividend distribution policy?
Mangesh Chauhan
So we are not going for dividend one or two years. Whenever we are cash flow positive and [Indecipherable]. So right now, we are one or two years, we are not thinking all there. We want to be — return — should we put in profit [Indecipherable], so whenever we will be cash flow positive and debt free, we’ll distribute a dividend.
Unidentified Participant
Right, sir. Sir, thank you very much for detailed answer, sir. And that’s it from my side. Best of luck for future endeavor for whole Sky Gold family, sir.
Mangesh Chauhan
Thank you so much.
Operator
Thank you. Ladies and gentlemen, due to time constraints, we’ll take this as a last question. I now hand the conference over to the management for closing comments.
Mangesh Chauhan
Thank you, everyone, for joining us. I hope we have been able to answer all the queries. In case you have or require any further details, you may please contact us or Orient Capital, our Investment Relations and partner. Thank you so much. Thank you for being a part of the Sky Gold journey. Thank you so much.
Operator
[Operator Closing Remarks]