✨ At a glance
In just five years, Utssav CZ Gold Jewels Ltd turned from a ₹120 Cr player into a ₹646 Cr revenue machine. Net profit jumped 12.5x to ₹25 Cr in FY25. But while the jewellery dazzled, the debt piled up like wedding gifts in a Big Fat Indian Shaadi — touching ₹130 Cr. Now the question is: multibagger magic or margin-trapping mirage?
🧵 About the Company
- Incorporated in 2007, Utssav CZ Gold Jewels Ltd (UCZGJL) designs, manufactures, and wholesales Cubic Zirconia (CZ)-studded gold jewellery.
- Specializes in 18K, 20K, and 22K casting jewellery in both yellow and rose gold.
- Focus: lightweight, export-friendly CZ jewellery — ideal for customers who want the look of diamonds without breaking the FD.
💼 Key Metrics Snapshot
| Metric | FY21 | FY25 | Growth |
|---|---|---|---|
| Revenue (₹ Cr) | 120 | 646 | 5.4x |
| Net Profit (₹ Cr) | 2 | 25 | 12.5x |
| Operating Profit (₹ Cr) | 4 | 39 | 9.75x |
| Reserves (₹ Cr) | 8 | 103 | 12.9x |
| Borrowings (₹ Cr) | 30 | 130 | 4.3x |
| OPM (%) | 3% | 6% | 🔼 |
🧑💼 Key Management
- While the company keeps a low profile, its board recently approved issuance of 1.18 million convertible warrants, suggesting insider confidence in future growth.
- Promoter holding stands at 70.52% (steady), with FII stake declining from 2.98% to 1.34% in Mar 2025.
💸 Financials Breakdown
📊 Revenue & Profit
| Year | Revenue (₹ Cr) | Net Profit (₹ Cr) | OPM (%) |
|---|---|---|---|
| FY21 | 120 | 2 | 3% |
| FY22 | 123 | 3 | 5% |
| FY23 | 238 | 7 | 5% |
| FY24 | 340 | 13 | 6% |
| FY25 | 646 | 25 | 6% |
🔍 Observation: Operating margin improvement is steady but still tight at 6%. There’s scale, but margin remains CZ-thin.
💰 Balance Sheet Highlights
| Metric | FY21 | FY25 |
|---|---|---|
| Equity Capital | 4 | 24 |
| Reserves | 8 | 103 |
| Total Borrowings | 30 | 130 |
| Total Assets | 44 | 270 |
🧾 Concern: Debt-to-equity rising faster than your EMI on a gold loan. ROE at 31% cushions the concern… for now.
🧮 Working Capital Efficiency
| Metric | FY21 | FY25 |
|---|---|---|
| Debtor Days | 65 | 62 |
| Inventory Days | 32 | – |
| CCC (approx) | 96 | 62 |
| Working Cap Days | 100 | 109 |
🛑 Interpretation: Cash conversion cycle improved, but working capital needs are increasing — possibly to service expanding order book or just glitzy showroom expansion.
📈 Growth Outlook
- 3-Year Revenue CAGR: 74%
- 3-Year PAT CAGR: 96%
- ROCE: 21.5% in FY25 (solid for a jewellery business)
👀 With the EGM clearing new warrants issuance, expect equity dilution but also future CapEx or working capital inflow.
🧠 EduInvesting Take
Utssav is that cousin at the wedding who wears a ₹5 lakh sherwani… and has 3 EMIs running on it.
While the revenue and profit chart is every SME investor’s dream, the ballooning ₹130 Cr debt and zero dividend policy might dull the bling a little.
However, if the company can maintain margins and not over-leverage itself like PC Jeweller 2.0, this might just become a surprise Titan challenger from the SME lane.
🚨 Risks & Red Flags
- Zero Dividend Policy: ₹25 Cr profit, yet not a rupee shared.
- Debt Load: 4x increase in 5 years. Looks a little shiny on the outside, but risky if interest rates rise.
- EPS Drop: EPS fell in FY24 due to equity dilution. With more warrants coming, shareholders may get further diluted.
- SME Volatility: Listed on NSE SME — low float, low liquidity, high mood swings.
🎯 Fair Value Estimate (Edu Range)
Based on SME jewellery comps (Kalyan, Senco, PNG) and factoring:
- Current PAT = ₹25 Cr
- Assuming stable 15% PAT CAGR
- 20x–25x PE band (avg for jewellery midcaps)
📉 Edu FV Range = ₹225 – ₹280 (long-term)
CMP is ₹250 — right in the middle. Not cheap, not expensive. Just like a ₹799 Amazon “diamond” ring.
📦 Final Thoughts
Utssav’s journey from ₹2 Cr to ₹25 Cr profit in 5 years is impressive. The jewellery might be CZ, but the results are pure gold. That said, SME stocks are a different species altogether — high-risk, high-sparkle.
So before you fall in love with the dazzle, ask yourself:
Is this multibagger… or just CZ masquerading as diamond? 💎
Author: Prashant Marathe
Date: 8 June 2025
Tags: Utssav CZ Gold Jewels, Jewellery Stocks, SME Stocks, Multibagger Watch, FY25 Results, Debt Analysis, NSE SME
