📌 At a glance:
Radhika Jeweltech Ltd reported a PAT of ₹84.31 Cr in FY25 with revenues clocking ₹610.10 Cr — a solid 11% YoY growth. EPS for the year? A sparkly ₹5.09 per share. But the market’s not impressed. From past glory to current underpricing, is this Gujarat-based jeweller a hidden multibagger — or a sparkle fading fast?
💍 About the Company
- Business: Manufacturing and retailing of gold, platinum, and diamond jewellery
- Headquarters: Rajkot, Gujarat
- Market Position: Dominant in Saurashtra region with deep B2C roots
- Listing: NSE & BSE (Symbol: RADHIKAJWE)
- No. of stores: One flagship mega store; future expansion on the radar post IPO
This isn’t a pan-India chain like Titan or Kalyan. It’s Rajkot royalty that’s trying to go national.
🧑💼 Key Managerial Personnel (KMP)
| Name | Designation |
|---|---|
| Ashokkumar M. Zinzuwadia | Managing Director |
| CS Sandip Nadiyapara | Secretarial Auditor |
| Panchal S K & Associates | Statutory Auditors |
✅ Audit Status: Unmodified opinion — auditors didn’t find any diamonds hidden in inventory or under Ashapura temple carpets.
📊 Financials (FY25 vs FY24)
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) | Change |
|---|---|---|---|
| Revenue from Operations | ₹610.11 | ₹544.06 | 🔼 +12.1% |
| Other Income | ₹0.50 | ₹1.56 | 🔽 -67.9% |
| Total Income | ₹610.68 | ₹545.63 | 🔼 +11.9% |
| Total Expenses | ₹503.97 | ₹478.70 | 🔼 +5.3% |
| EBITDA (Est.) | ₹106.71 | ₹66.93 | 🔼 +59.4% |
| Net Profit (PAT) | ₹84.31 | ₹61.01 | 🔼 +38.2% |
| EPS | ₹5.09 | ₹4.20 | 🔼 +21.2% |
💰 Profit grew faster than revenue = good margins. The EPS jump shows operational discipline is paying off.
💸 Forward-Looking Fair Value (FV)
Let’s apply a little EduMath™:
- EPS: ₹5.09
- Jewellery sector average P/E: ~25x
- FV Estimate: ₹5.09 × 25 = ₹127.25
📉 CMP: ₹92
✅ Discount to FV: ~28% upside potential if re-rating happens
But hold the champagne — the balance sheet has a few chunky karats we need to verify first.
📦 Balance Sheet Review (FY25)
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Equity Share Capital | ₹23.60 | ₹23.60 |
| Other Equity (Reserves) | ₹299.05 | ₹241.30 |
| Total Assets | ₹375.84 | ₹321.01 |
| Inventory | ₹304.14 | ₹308.09 |
| Trade Receivables | ₹25.58 | ₹32.65 |
| Cash & Bank Balances | ₹6.29 | ₹8.55 |
| Trade Payables | ₹46.75 | ₹56.43 |
| Total Borrowings | ₹50.86 | ₹52.71 |
⚠️ Observations:
- Inventory is massive: ~81% of total assets!
- Receivables have improved (✅)
- Cash is thin (🚩)
- Borrowings stable but still notable — they paid ₹2.22 Cr in finance costs
🚀 Growth & Industry Outlook
Positives:
- Jewellery demand in Tier-2 cities is steady
- Radhika has regional brand equity
- Diamond margin contributions have improved
- Asset-light expansion could unlock serious RoE
Challenges:
- Zero segment diversification (unlike Titan)
- Litigation cloud from pending IT search ops
- No new store announced despite IPO buzz
🤡 EduInvesting Take
The good:
- Profitable ✔️
- Growing ✔️
- EPS improving ✔️
- Low float ✔️
The bad:
- Inventory monster still lurking
- Market cap doesn’t reflect earnings power
- Still seen as “Rajkot-only brand” despite IPO
The hilarious:
The stock listed at ₹78… hit ₹122… then drifted to ₹92, while gold went to ₹74,000/kg. Either someone’s hoarding karat-karat wealth off books, or Mr. Market hasn’t discovered this one yet.
⚠️ Risks & Red Flags
- 📜 Pending IT litigation: ₹112.75 lakh in disputed tax matters
- ⚖️ Management claims confidence — but legal clouds = valuation cap
- 🧊 Working capital intensive due to inventory-led model
- 📉 No dividend despite cash profits — reinvestment over reward strategy
📈 Cash Flow & Capex
| Metric | FY25 (₹ Cr) | FY24 (₹ Cr) |
|---|---|---|
| Cash from Operations | ₹-13.38 | ₹8.19 |
| Capex (PPE & intangible) | ₹-1.88 | ₹-1.95 |
| Net Borrowing Change | ₹-3.59 | ₹-4.22 |
| Dividend Paid | ₹2.36 | ₹2.36 |
| Net Cash Position | ₹1.91 Cr | ₹2.56 Cr |
🔧 Despite profits, cash flow is negative due to working capital drag. Not alarming, but needs monitoring.
📜 Final Verdict
Radhika Jeweltech is not your typical bling stock. It’s a profitable, growing, regionally dominant jewellery business that deserves more investor love — but legal clouds and inventory baggage are holding it back.
💡 Think of it as a small-town Titan wannabe — with the upside of a re-rating and the risk of a tax officer knocking again.
Author: Prashant Marathe
Date: May 24, 2025
