🧠 At a Glance
D.P. Abhushan started as a local Ratlam jewellery store and now flaunts ₹3,311 Cr in annual revenue with a solid 35% ROE. Their gold game is glossier than your cousin’s wedding outfit — with operations across Indore, Bhopal, and Udaipur. A consistent profit compounding machine, this jeweller’s charm lies in family control, tight margins, and rapid topline scaling. But is the sparkle real, or are valuations making it a bit… 24 Karat delusional?
1️⃣ Hook: “From Mandap to Marketcap”
- 📍4 stores → ₹3,300 Cr revenue
- 📈 5-Year Profit CAGR: 47%
- 🧾 FY25 Net Profit: ₹113 Cr
- 📊 ROE: 35%
- 😳 Cash Flow from Ops FY25: -₹19 Cr
And yet, market cap of ₹3,348 Cr, trading at 30x earnings and 8.3x book
Looks like D.P. Abhushan’s real product is not gold – it’s valuation premium.
2️⃣ WTF Do They Even Do?
Business Model:
- 💍 Jewellery retail — 100% offline
- ⚒️ Gold, diamond, jadau, platinum, colored stone jewellery
- 🌬️ Bonus: Power generation through… Windmill (Yes, really)
Geography:
- Core stores in:
- Ratlam (flagship)
- Indore
- Bhopal
- Udaipur
- No flashy Pan-India expansion. Yet.
3️⃣ Financials – Solid as a Gold Brick
| FY | Revenue (₹ Cr) | Net Profit (₹ Cr) | EPS (₹) | OPM | ROE |
|---|---|---|---|---|---|
| FY21 | ₹1,215 | ₹27 | 12.34 | 4% | 22% |
| FY22 | ₹1,728 | ₹40 | 18.17 | 4% | 24% |
| FY23 | ₹1,971 | ₹45 | 20.36 | 4% | 24% |
| FY24 | ₹2,337 | ₹62 | 27.80 | 4% | 27% |
| FY25 | ₹3,311 | ₹113 | 49.73 | 5% | 35% ✅ |
📈 5Y Sales CAGR: 33%
📈 5Y Profit CAGR: 47%
💎 EPS more than doubled in 2 years
4️⃣ Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| CMP | ₹1,478 |
| P/E | 29.7x |
| Book Value | ₹178 |
| P/B | 8.28x |
| ROE | 35.1% |
| Market Cap | ₹3,348 Cr |
Let’s say FY26E EPS grows conservatively at 20% to ₹60.
🎯 At 20–24x forward PE →
Fair Value = ₹1,200–₹1,440
👉 Stock is now at top-end of that range, already pricing in growth perfection.
And remember: This is a low-margin biz with limited differentiation.
5️⃣ What’s Cooking – Triggers & Twists
- ✅ Allotment of 1.67L shares via preferential route (Jul 2025) → ₹14.8 Cr raised
- ✅ Store productivity is strong — but expansion is modest
- 🚨 No presence in Tier 1 metros (Delhi, Mumbai, Chennai)
- 💼 Management is family-run — stable, but opaque
- 📉 Negative CFO in FY25 due to working capital stress (gold inventory buildup?)
6️⃣ Balance Sheet – Gold is Heavy, Debt is Light
| FY | Net Worth | Total Debt | Net Debt | Inventory Days |
|---|---|---|---|---|
| FY23 | ₹216 Cr | ₹173 Cr | ~₹120 Cr | 76 |
| FY25 | ₹381 Cr | ₹169 Cr | ~₹130 Cr | 87 |
- 🧾 Debt stable despite topline doubling
- ⚠️ Inventory cycle is stretching
- ❗ Cash Conversion Cycle: 66 days
While not alarming, jewellery retail is working capital hungry, and FY25 had -₹19 Cr CFO. That’s… not great.
7️⃣ Cash Flow – Sab Number Game Hai
| FY | CFO | Capex | FCF |
|---|---|---|---|
| FY23 | -₹0.5 Cr | ₹4 Cr | -₹4.5 Cr |
| FY24 | ₹24 Cr | ₹0 Cr | ₹24 Cr |
| FY25 | -₹19 Cr | ₹27 Cr | -₹46 Cr ❌ |
Biggest risk here: they’re growing on inventory, not footfall. Unless they rotate stock quickly in FY26, margins could compress.
8️⃣ Ratios – Sexy or Stressy?
| Ratio | Value |
|---|---|
| ROE | 35.1% ✅ |
| ROCE | 33.6% ✅ |
| OPM | 5% |
| CFO Yield | NEGATIVE ❌ |
| Promoter Holding | 74.88% ✅ |
| D/E | ~0.45 |
High return ratios, yes. But inventory management will decide future ROE.
9️⃣ P&L Breakdown – Quarterly Gold Rush
| Quarter | Sales (₹ Cr) | PAT (₹ Cr) | EPS | OPM |
|---|---|---|---|---|
| Mar 2024 | ₹557 | ₹16 | ₹7.28 | 4% |
| Jun 2024 | ₹505 | ₹25 | ₹11.27 | 8% ✅ |
| Sep 2024 | ₹1,005 | ₹25 | ₹11.11 | 4% |
| Dec 2024 | ₹1,084 | ₹37 | ₹16.51 | 5% |
| Mar 2025 | ₹717 | ₹25 | ₹11.10 | 6% ✅ |
High seasonality — Q2/Q3 are peak periods (festive + wedding season).
🔟 Peer Comparison – Kalyan, Titan, PNG
| Company | P/E | ROE | OPM | Mcap |
|---|---|---|---|---|
| D.P. Abhushan | 29.7x | 35.1% | 5% | ₹3,348 Cr |
| Kalyan Jewellers | 84.6x | 15.9% | 6% | ₹60,433 Cr |
| Titan | 98x | 31.7% | 9.4% | ₹3.27 L Cr |
| PNG Jewellers | 36.9x | 20.9% | 4.4% | ₹8,071 Cr |
✅ D.P. Abhushan beats on ROE
❌ Lags on brand scale and moat
1️⃣1️⃣ Shareholding – Who Owns the Gold Mine?
| Category | Jun 2024 | Jul 2025 |
|---|---|---|
| Promoters | 75% | 74.88% ✅ |
| FIIs | 0.20% | 0.22% |
| DIIs | 0.05% | 0.01% ❌ |
| Public | 25% | 24.89% |
Retail dominated. Institutions are absent. This is still a founder-led rat-race.
1️⃣2️⃣ EduInvesting Verdict™
📜 D.P. Abhushan isn’t just another gold stock — it’s a high-ROE, low-footprint growth story. In a sector plagued by legacy debt bombs (👀 PCJ, Rajesh Exports), DPAL shines with clean books and consistent execution.
But:
- ❗It’s pricing in near-perfection (30x P/E, 8x P/B)
- 📉 Cash flow stress is real in FY25
- 📦 Inventory-led growth is unsustainable unless backed by better rotation
🎯 Fair Value Range = ₹1,200 – ₹1,440
(based on 20–24x FY26E EPS of ₹55–60)
💬 If Titan is Karan Johar’s “Kabhi Khushi”, then D.P. Abhushan is Ratlam’s viral YouTube wedding — surprisingly profitable, but still working on a pan-India invite list.
✍️ Written by Prashant | 📅 July 6, 2025
Tags: D.P. Abhushan, Ratlam Jewellers, Jewellery Stocks, ROE Compounders, Gold Retail India, Smallcap Gems, Wedding Season Stocks, Valuation Analysis, EduInvesting
