At a glance

Andhra’s homegrown jeweller MVGJL — with its deep-rooted hyperlocal retail model — has grown profits at 33% CAGR over 5 years. It’s got 18% ROE, strong cash flows until FY24, and a fair P/E of 11.8x. Yet it’s not paying dividends, FIIs are bailing, and it trades 7–8x below Titan. Is this a hidden smallcap gem or a gold-coated trap?

1. 🪙 About the Company

Manoj Vaibhav Gems ‘N’ Jewellers Ltd is a South Indian jewellery retail chain under the Vaibhav Jewellers brand.

• Operates 16 company-owned showrooms + 2 franchisee outlets across Andhra Pradesh & Telangana
• Sells gold, diamond, platinum, silver, and studded jewellery
• Core strategy: Hub-and-spoke model — smaller branches feed traffic into large flagship showrooms
• Focuses on Tier 2 and 3 towns with strong family networks and repeat customers

Think of them as Titan’s rural cousin who prefers relationship-based selling over TV ads.

2. 🧑‍💼 Key Managerial Personnel (KMP)

• Mrs. Vaibhav Reddy (CEO)
• Mr. Manoj Kumar Grandhi (MD)
• Both have deep connections in the Andhra jewellery ecosystem and have led consistent expansion

They’ve maintained steady ROCE of 15–17% for the past 3 years — rare in retail.

3. 📈 Financials (FY20–FY25)

Revenue (₹ Cr)

5-Year CAGR: 13% — not wild, but respectable considering gold price fluctuations and rural demand cycles.

Net Profit (₹ Cr)

5-Year CAGR: 33%
That’s more than Titan’s PAT growth in the same timeframe.

Key Ratios

4. 🔍 Forward-Looking Fair Value (FV Estimate)

Assuming:

• FY26E PAT = ₹115 Cr
• Forward P/E = 12x–16x (regional brand, no dividend, modest growth)
• Market Cap estimate = ₹1,380 Cr – ₹1,840 Cr
• Shares outstanding = ~4.86 Cr
• Fair Value Range = ₹285–₹380 per share

➡️ CMP = ₹244 → Potential upside of 17%–55%, but again — this assumes continued growth and FII support returning.

5. 🚚 Strategy & Business Drivers

• Franchise model expansion in Telangana & North Andhra to reduce Capex load
• Push into branded diamond jewellery (higher margin than plain gold)
• Gold saving schemes being pushed in Tier 3 towns for customer lock-in
• Focus on working capital optimization: Cash conversion cycle is 211 days — improving it even by 10% could unlock ₹100+ Cr in cash

6. 🧠 EduInvesting Take

Manoj Vaibhav is not Titan. But it doesn’t pretend to be either.

✅ 33% PAT CAGR
✅ Reasonable valuation
✅ Sticky customer base
✅ No crazy debt expansion
✅ Brand loyalty in underserved geographies

❌ But it hasn’t paid any dividends
❌ Cash flow from operations was -₹67 Cr in FY25
❌ FIIs cut stake from 8.7% to 0.69% in one year
❌ Inventory days creeping up = possible overstocking or slow turnover

So what’s going on?

Either:

• It’s quietly building a moat and FIIs are being myopic
• Or the insiders see growth flattening, and so are hoarding retained earnings without rewarding shareholders

7. ⚠️ Risks & Red Flags

• Zero dividend for 6 years straight
• Cash flow turned negative in FY25 despite PAT rising to ₹100 Cr
• Inventory management weak: 231 days is high even for jewellery retail
• No investments in digital or omni-channel — lagging behind players like Senco and Kalyan

TL;DR — A Jeweller With Real Profits, But No Sparkle for Shareholders… Yet

This isn’t a scammy jewellery pump-and-dump like PC Jeweller.
Nor is it a blue-chip like Titan.

It’s somewhere in between — genuinely profitable, slow, steady, but maybe too conservative for its own good.

If they start paying dividends or improving inventory turns, the market may re-rate it toward 15–18x P/E.

Till then, it’s fairly priced, slightly undervalued, but not yet a raging multibagger.

Author: Prashant Marathe
Date: 13 June 2025
Tags: MVGJL, Manoj Vaibhav Jewellers, Jewellery Stocks India, Titan Peer Comparison, Hyperlocal Retail, EduInvesting