PNGS Reva Diamond Jewellery IPO

It’s been growing in a steady, healthy way. Revenue from operations moved up from ₹198.85 crore in FY23 to ₹258.18 crore in FY25. Profit after tax also increased from ₹51.75 crore to ₹59.47 crore in the same period, which suggests it’s not just growing, it’s growing profitably.

It runs a pretty smart “shop-in-shop” setup, where 33 out of its 34 stores are inside existing outlets of its corporate promoter, PN Gadgil. In simple words, it can sell from good locations without spending heavily on building full standalone stores upfront. That lighter cost structure helps explain the strong return on equity at 34.08% in FY25.

It benefits a lot from the long-standing name of its corporate promoter, P.N. Gadgil & Sons Limited, which has been in jewellery for 190+ years. It uses the “PNGS” trademark and also gets walk-in customers (footfall) from promoter stores, and importantly, it doesn’t pay any royalty for this. So customers see a familiar name, and trust tends to come faster.

Profitability looks strong at the operating level, with an adjusted EBITDA margin (a profitability measure before interest, tax, depreciation, and amortisation, adjusted for one-offs) of 30.83% in FY25 and 28.70% in FY24. A big reason is its focus on diamond and precious stone jewellery, which typically carries higher margins than plain gold jewellery.

More people are buying from it, and you can see that in the number of sales bills (basically, total purchase invoices) rising from 22,907 in FY23 to 30,378 in FY25. Alongside that, revenue grew at a CAGR of 13.95% between FY23 and FY25.

Right now, the business is heavily tied to one state. In the six months ended September 2025, about 97.54% of its revenue (₹152.87 crore) came from Maharashtra alone. That’s a risk because if Maharashtra faces a slowdown, new regulations, or even events like floods or other natural disruptions, the company’s sales could take a direct hit.

It keeps a lot of stock compared to how quickly it sells. Inventory turnover days were 360 days in FY25, which basically means inventory is sitting for about a year on average before it gets sold. As of September 2025, inventory stood at ₹313.07 crore. The downside is that this ties up cash and also increases holding costs like storage and insurance.

There are signs of cash pressure. For the six months ended September 2025, cash flow from operating activities (cash generated from day-to-day business) was negative at ₹54.67 crore. On top of that, total borrowings jumped from zero in FY24 to ₹130.25 crore by September 2025, which means higher interest costs and a heavier repayment load.

The company depends a lot on its corporate promoter for its store network. 33 out of 34 stores operate inside promoter premises under a franchise agreement. So if there’s a dispute or if the agreement ends, it could disrupt nearly 97% of its retail presence almost immediately.

It plans to use ₹286.56 crore from the IPO to open 15 standalone stores, but today it has experience running only one such exclusive store. Shifting from the relatively “supported” shop-in-shop model to standalone stores (which usually have higher rent, staffing, and store-running costs) is a big execution challenge, and profits from these new stores aren’t guaranteed.