EduInvesting.in | May 14, 2025
By Prashant “Polish-the-Gold” Marathe

Gold may be volatile, but RBZ Jewellers seems to have found its mojo — both in sales and storytelling. The Q4 FY25 earnings call had everything: sparkling topline growth, a retail ramp-up, a dash of scandal (yes, we’re looking at you, fraudster employee), and a not-so-minor ₹25 crore tiff with the Income Tax Department.

But let’s polish this nugget down to the essentials.

📈 Revenue Bling: 59% YoY in Q4 FY25

Let’s start with the good stuff. RBZ Jewellers delivered a Q4 that would make even Titan’s boardroom nod in approval.

• Q4 FY25 revenue up 59% YoY
• Full-year topline estimated at ₹525–535 crore
• PAT at ₹8.5 crore (vs ₹2.69 crore in Q4 FY24)
• Akshaya Tritiya sales up 30%+
• Retail had a “wonderful year” (management’s words, not ours)

This isn’t a one-season wonder either — growth has been consistent through all quarters, even if a bit glitter-coated by accounting adjustments in prior years.

📊 FY26–27: The 4-Digit Club Beckons

If management’s crystal ball is correct, RBZ wants to break into the ₹1,000 crore club soon:

Not bad for a company that just recently got listed. But let’s not forget — jewelry retail in India is a game of bling, trust, and margin math. Can RBZ pull off this expansion while keeping its shine?

🏬 Expansion Plans: New Showrooms, Same Gold

Two new showrooms are in the pipeline:

• Surat — launching in Q3 FY26
• Rajkot — expected in Q1 FY27

Retail strategy = Exclusivity. Sell in-house manufactured designs, reduce third-party margin leakage, and improve profitability. Management claims this will give them an edge in the highly competitive wedding-and-festival market.

Also, RBZ’s factory capacity hasn’t changed, but thanks to gold prices going from ₹50K to ₹1L per gram, the value throughput has doubled. Translation: more revenue from the same infrastructure. That’s a golden arbitrage.

💰 But Wait, Where’s the Cash?

An analyst on the call asked a very real question:
“Why are your operating cash flows negative?”

RBZ’s answer?

“It’s not a concern because funds are in liquid inventory — mostly gold.”

Fair point. Gold is liquid. But so is vodka, and you don’t want your cashflow drowning in either. Negative OCF is a yellow flag, especially when inventory days are above 250–300, way higher than the industry average.

Management says their actual number is around 180 days, and the spike was a one-off due to pre-IPO festival stockpiling. Let’s see if they walk that back down next quarter.

⚠️ Risks, Red Flags & the ₹25 Cr Taxman Tussle

Let’s get real for a second. This story isn’t all roses and ruby necklaces.

🔸 Gold Price Volatility

When gold jumps like Virat Kohli at an IPL final, customers don’t exactly rush to buy. Walk-ins drop. Demand gets postponed, not denied, says the company. But “postponed” doesn’t pay next quarter’s bills.

🔸 Employee Fraud

One rogue employee allegedly swiped gold, but much of it was recovered. Insurance should cover the rest. A ₹25 lakh provision was made, but the emotional gold theft? Unrecoverable.

🔸 ₹25 Crore Tax Dispute

There’s an Income Tax appeal over bonus shares issued when the company was private. Management calls it “baseless,” but until resolved, it’s a ₹25 crore cloud over their otherwise sunny outlook.

🔸 Limited B2B Volume Growth

Management expects only 7–8% growth in B2B volumes due to gold price escalation. Not a surprise — who wants to stockpile bling when prices swing like a pendulum?

📦 Job Work: Q4 Boost = Q1 Dip?

Another analyst asked about the sudden surge in job work revenue in Q4. Management admitted:

“Yes, some of Q1’s revenue was booked early.”

Which means Q1 FY26 could see a soft patch, especially on the B2B side. Nothing alarming — just something to watch.

💸 Debt Raise: Time to Borrow and Grow

To support all this aggressive expansion, RBZ plans a debt raise, aiming for a 1:1 debt-to-equity ratio. Given their recent BBB+ rating upgrade, the cost of borrowing could come down — good news for the bottom line.

And if all else fails, management hinted at a potential equity raise too. Get ready for dilution talks in FY26–27.

🧠 EduInvesting Take: Multibagger Material or Gold-Plated Risk?

RBZ Jewellers is not your average neighborhood goldsmith. They’ve shown:

✅ Consistent growth
✅ Retail expansion focus
✅ Healthy PAT margins (~7%)
✅ Aggressive future guidance

But also:

❌ Negative operating cash flow
❌ High inventory days
❌ Pending tax and fraud issues
❌ Sector-wide demand sensitivity to gold prices

Verdict:
RBZ is glittering, no doubt. But before you rush to buy the stock like it’s Akshaya Tritiya, remember — not all that glitters is growth. Still, if they hit ₹1,000 cr revenue and ₹55 cr profit by FY27, you’re looking at a stock that could quietly become a multibagger — provided the gold gods stay kind.