D.P. Abhushan drops explicit revenue guidance, pivots to volume target
In May CEO Vikas Kataria guided ₹4,800 cr for FY27; in July the same CEO would only say 10% volume growth, leaving value to gold prices.
What's new
- Q1 revenue ₹854 cr, up 58% YoY; EBITDA ₹94 cr, up 70%; margin 11%.
- Same-store sales growth of 52%, but underlying gold volume grew just 1-2%.
- Gold exchange contribution dropped to 25% from 35-40% in prior quarter.
- Plan for 51 stores by FY30, with Dahod COCO and Jabalpur FOCO underway.
Themes from the call
Demand
Volume grew only 1-2% in Q1; value growth came from gold prices and inventory gains. Wedding (62% of sales) and Akshaya Tritiya drove footfall.
Margins
EBITDA margin expanded 80 bps YoY to 11%, aided by scale benefits and price-led mix. One-tenth to one-sixth of growth was inventory gain.
Capital allocation
New stores (COCO/FOCO) capex break-even in 6-9 months. Gold inventory turnover targeted at 3x after 2-3 years, 8-9x for mature stores.
Guidance watch
- FY27 gold volume growth target of 10% – but no revenue target after May's explicit ₹4,800 cr figure.
- 51 stores by FY30 (from 12) via COCO and FOCO; 5-6 stores in FY27.
- Studded mix target of 12-15% by FY28 from current 6-7%.
Risk flags
- Revenue guidance replaced by a non-committal volume target – valuation uncertainty.
- Gold exchange share dropped to 25% without reconciliation – could signal demand shift or data change.
- Volume growth of 1-2% in Q1 suggests the 10% annual target may be ambitious if gold prices stay elevated.
- Working capital remains tied to inventory (95-98% of assets), constraining cash flow.
Key quotes
-
"We are aiming for 10% volume growth. Value growth will depend on gold prices. Internally, we focus on volume... That is what matters most to us."
— Vikas Kataria, CEO -
"So FY27 and FY28, the revenue we are planning around like 20%, 25% growth. So INR4,800 crores, and the next year will be INR5,500 crores."
— Vikas Kataria, CEO (May 2026 call)
The brief
D.P. Abhushan’s Q1 was a revenue blitz – ₹854 cr, up 58% – but the fine print was less reassuring. Same-store sales surged 52%, yet underlying gold volume rose just 1-2%. The entire value growth came from higher gold prices and inventory gains, not from selling more grams. Management attributed 10-15% of quarterly growth to inventory gains alone.
That backdrop makes the guidance change more consequential. In May, CEO Vikas Kataria gave the street clear revenue targets: ₹4,800 cr for FY27 and ₹5,500 cr for FY28. In July, the same CEO pivoted to a volume-only target of 10% and said value 'depends on gold prices.' The earlier revenue numbers weren't reaffirmed. The open question is whether those targets are off the table or just deferred.
The shift is part of a pattern. Gold exchange, which had contributed 35-40% of sales in May, dropped to ~25% in the July call – a material decline that management didn't explain. It might be seasonal, definitional, or a real shift in customer behaviour. Without a bridge, it’s just a question mark.
Store expansion remains the growth narrative: 51 stores by FY30 from 12 today, with Dahod COCO and Jabalpur FOCO. The studded mix target of 12-15% by FY28 also adds optionality. But these plans depend on volume execution, and Q1’s 1-2% volume growth doesn’t yet support the 10% annual target.
For now, the stock trades on the Q1 revenue beat. The guidance revision says management isn't as confident as they were.
D.P. Abhushan traded the clarity of revenue targets for the hedging of volume guidance. That’s a downgrade for investors.