D. P. Abhushan Limited Q1 FY25 Earnings Conference Call Summary
Date and Submission
• Date of Call: July 19, 2024
• Submission to Exchanges: July 23, 2024
Management Representatives
• Key Participants:
• Anil Kataria (Whole-Time Director)
• Vikas Kataria (Promoter)
Company Performance Highlights
• Revenue Growth: 7% year-over-year to Rs. 504 crores
• EBITDA Increase: 51% to Rs. 38 crores
• Profit After Tax: 60% rise to Rs. 25 crores
• Gold Demand: 15% decline due to seasonal factors
Future Plans
• Store Expansion: Increase from 8 to 20 stores by FY28
• Diamond Jewelry Revenue Share: Target increase from 6% to 15%
Margin and Sales Strategy
• Target Margins:
• PAT margin over 4%
• EBITDA margin of 6% to 7%
• Focus on Diamond Jewelry: Increase studded jewelry ratio to 10-15%
• Sales Contributions:
• 20-25% from old gold exchange program
• 3-5% from monthly savings schemes
Operational Insights
• Inventory Management:
• Turnover ratio of 5x
• Average carrying period of 70 days
• Expansion Model: Exploring franchise model alongside company-owned stores
• New Showroom Developments:
• 12,000 sq. ft. showroom in Ratlam
• Three-story expansion in Ujjain
Capital Expenditure
• Planned Investment:
• Rs. 6-8 crores for three new stores
• Rs. 100 crores for inventory
Market Focus
• Target Areas: Emphasis on Tier-2 and Tier-3 cities due to lower competition
• Long-term Strategy: Expansion into Maharashtra and Mumbai considered
Investor Inquiries
• Expansion Plans: Over 20 locations identified for new stores within three years
• Profit Margin Clarification: Increase from 5% to 8% attributed to gold prices and inventory cost methods
Conclusion
• Commitment to Stakeholders: Assurance of transparency, quality, and strong performance from management.