Uday Jewellery FY26: Revenue doubled, profit soared — but the margins took a detour
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1. At a Glance
FY26 was a year of clean contradictions. Sales grew 153% to ₹726 Cr; net profit ballooned 229% to ₹36 Cr. The order book and capacity expansion are real. Yet the operating margin compressed to 6.8% from 7.5% in FY25 — classic scaling pain, or something else?
Borrowings doubled to ₹162 Cr (from ₹25 Cr). Cash generation flipped negative: operating cash flows fell ₹18 Cr after dumping ₹107 Cr into working capital — mostly inventory that swelled from ₹53 Cr to ₹205 Cr. The merger with Narbada Gems (effective Apr 2024) inflated the top line; strip out the merger contribution, and organic growth is still solid.
P/E sits at 14.8x — below the peer median of 17.3x. Debt-to-equity is 0.78. The market has priced in the growth, but has it priced in the working capital trap?
2. Introduction
Uday Jewellery, part of the Sanghi Group since 2011, pivoted from an e-commerce relic (Hifunda.com) into a B2B maker of stone-studded gold jewellery and cubic zirconia (CZ) pieces. The company exports through UAE, Qatar, and Singapore.
In FY24, the company was sleepy — ₹173 Cr revenue, ₹9 Cr profit. Management shuffled: Sanjay Kumar Sanghi became CMD in Apr 2026 (after running it as Joint MD). A preferential issue brought in ₹10 Cr. The Narbada Gems merger consolidated production and amplified scale.
Q4 FY26 delivered ₹226 Cr revenue (up 113% QoQ) and ₹11 Cr net profit (up 489% QoQ). Price referenced is ₹156 as of 9 Jun, not live.
3. Business Model: WTF Do They Even Do?
Uday makes handmade gold jewellery studded with CZ and colour stones (rubies, sapphires, navratnas). Two units in Telangana. 87% domestic (Andhra Pradesh, Telangana, Kerala); 13% exports (Dubai 73%, Qatar 2%, Singapore 6%, USA 19%).
Revenue is 100% from studded jewellery sales. No wholesale, no retail stores — it’s a manufacturer-exporter model. Major clients are Kalyan Jewellers and Malabar Gold. Customer concentration is intense — top 5 = 70% of sales. That’s both a moat (sticky, large-scale buyers) and a cliff (one walks, you’re hollowed).
Capacity rose from 20 kg/month (FY20) to 125 kg/month (FY24). Actual production in Sep 2025: 20 kg/month — utilization still below 20%. ₹12 Cr was sunk into machinery. The plant is built; the excess is parked.
