Operator
Ladies and gentlemen, good day and welcome to DP Abhushan Limited Q2F527 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ajit Mishra from E&Y Investor Relations. Thank you, and over to you, sir.
Good evening. Thank you for joining the call. I am Ajit Mishra from Ernst & Young Investor Relations. Before we proceed to the call, let me remind you that the discussion may contain forward-looking statements that may involve known or unknown risk, uncertainties, and other factors. It must be viewed in conjunction with our business risk that could cause future results performance or achievement to differ significantly from what it expressed or implied by such forward-looking statements. Please note, the Prestonese financial results and investor presentations have already been circulated via email and are available on the stock exchange as well as on the company's website. In case anyone has not received the documents, please feel free to reach out to us and we'll be happy to share them. To take you through the Q2 F527, H1 F527 results, and business performance today, we have with us Senior Management Team of DPA Abushan Limited, represented by Mr. Anil Kataria, full-time director, Mr. Santosh Kataria, chairman and managing director, Mr. Vikash Kataria, promoter, and Mr. Manish Ladda, chief financial officer. We will begin the call with the management's opening remark on the company's performance for the quarter and the half year financial year, followed by question and answer session. With that, I would now like to hand over the call to Mr. Anil, sir. Over to you. Thank you.
Thank you. Thank you. Thank you. Thank you. Thank you.
Good evening, everyone. This is Vikas Katariya. I will briefly take you through our recent retail expansion and our plan for the coming quarters. During FY27, we have continued to expand our retail footprint in a disciplined manner. We open our Dhar showroom in Madhya Pradesh in end of... March 2026 with approximately 3,000 square feet of retail area. This was followed by our entry into Gujarat through the opening of our Dahod showroom in September 2026. The showroom has approximately 3,200 square feet of retail area and is strategically located close to the Madhya Pradesh-Gujarat border. More recently, on 30th October, we inaugurate our first four-core showroom in Jabalpur, Madhya Pradesh. This is an important milestone for us because it is our first operational showroom under the franchisee-owned company-operated model. The Jabalpur showroom has approximately 3,750 square feet of retail area. Under this structure, the franchisee partners fund the showroom capital, expenditure, and inventory. Day-to-day operations are handled by D.P. Agushan under our established system and operating framework. With Jabalpur, our network has now expanded to 14 showrooms, comprising 13 COCO showrooms and 1 FOCO showrooms. Our expansion strategy going forward will continue to be discipline and market specific. Our core strength remains Central India where we have operated for several decades and have a deep understanding of customer preference, local market and purchasing behaviour. Looking ahead, we plan to add approximately 3 to 4 additional showrooms by March 20, 2027, subject to execution timeline and business consideration. We are progressing with a new Cocoa showroom in Jodhpur, Rajasthan, with approximately 5,200 square feet of retail area, which is expected to be inaugurated by December 2026. We have also finalized two additional COCO locations in Madhya Pradesh, Mansoor with approximately 3,500 square feet and Sagar with approximately 5,800 square feet of retail area. These locations are expected to become operational by the end of financial year 27. Over the long term, our focus remains on expanding across Madhya Pradesh, Rajasthan, Gujarat, Chhattisgarh and Maharashtra. Our approach remains very clear. We do not want to expand simply for the sake of adding store. We want to enter market where we understand the customer, see sustainable long-term demand, and believe that the DP jewelers' brand can build a strong position. Our successful execution across Rathnam, Dhar, and Dahod under the COCO format Together with Jagalpur under the FOCO format, strengthen our confidence in our ability to scale the network in a disciplined manner. There are 30 factors supporting our confidence. First is the demand environment. The festival season has given us a strong start to Quarter 3 and we now move into the important wedding period. Second is store contribution. The store that we have added to our network will progressively contribute as their ramp-up, while our established store continues to provide a strong base for the business. And third is expansion. We are entering the next phase of growth with a clear pipeline of new location and significantly greater financial capacity to support this expansion. With that, I would now hand over the call to Sankosji, who will take you through our recent festival performance and some of the key operational developments. Thank you.
Thank you, Vikashi. Good afternoon, everyone. आज मैं आपको हमारे बिजनेस में कुछ प्रमुक बदलाओ और फेस्टिव सुजन के दोरान कंपनी के प्रदर्शन के बारे में जानकारी लेना चाहूंगा. जैसा कि अनिल भाई ने बताया, इस वस फेस्टिव दिमान के समय में इस पस्ट बदलाओ देखने को मिला है और म Thank you. This was the first time of the year, when we started the year, when we started the year, we had more than 1.8 crores. When we started the year, the year was more than 1.8 crores. Good morning, everyone, and welcome. Good morning, everyone, and welcome to the call. Good morning, everyone, and welcome to the call. Thank you. Thank you. Thank you.
Thank you, Sandozji. Good afternoon, everyone. Let me briefly take you through the financial performance of Q2 and afterly of FI27, followed by an update on our funding and capital position. For Q2 FI27, total income stood at 761 crore, EBITDA was 61 crore, and the PED was approximately 40 crore. As explained earlier, The quarterly comparison needs to be seen in the context of the shift in the festive calendar. Therefore, happily, H1 provides a more comprehensive and representative picture of our underlying performance. For H1 FY27, total income increased by 7% year-on-year to approximately 1615 crore. EBITDA grew by 18% to approximately 155 crore, with EBITDA margin improving to 9.61% from 8.68% in FI26. Profit after tax increased by 19% to approximately 104 crore, while the pet margin improved to 6.45% from 5.82% in the corresponding period last year. As we prepare for the next phase of growth, inventory funding and capital efficiency remains a key area of focus. We follow multiple mechanisms to manage gold procurement and gold price exposure, including the customer gold exchange and gold metal loans, and of course the hedging mechanism. See, gold received through exchange is particularly important because it reduces our dependence on incremental fresh gold procurement. And effectively forms part of natural housing mechanism within the business. Going forward, increasing the contribution of the exchange-linked gold and structured gold accumulation program should further support the capital efficiency. Another important strength to our business model is our established presence in the central India. This is relevant not only from a revenue perspective, but also from an operating cost perspective. We already have a strong sourcing framework, operating infrastructures, employee base, brand recall, logistic network, and understanding of these markets. Therefore, as we expand further within our core markets, particularly in the Madhya Pradesh and adjoining geography, we believe we can leverage much of the existing infrastructure. This would allow us to grow without a proportionate increase in our underlying fixed cost base. I would also like to briefly address you guys about our recently announced fundraising initiative. This is our first investor call following the decision to undertake the fundraise, and we believe it is an important step in our preparing to the company for the next phase of growth. We propose the preferential issue of equity share and fully convertible warrants aggregate to approximately 558 crore, of which approximately 513 crore is intended toward expanding our retail network, funding the inventory requirement for the new store and showroom, and with the remaining amount proposed for the general corporate purpose. For us, this fund Rage is not simply about strengthening the balance sheet. It is about creating the financial capacity required to pursue the business opportunity we see ahead in a disciplined manner. We believe BP Abhuzhan has several strengths that provide confidence in our underlying potential of the business. The combination of internal accruals, our proposed capital raise, efficient inventory management mechanisms, and selective use of COCO and FOCO formats gives us greater flexibility to pursue this expansion while maintaining the financial discipline. Our objective is therefore not only to grow the showroom network. But to do so while protecting return on capital, maintaining healthy profitability, and building a stronger platform for sustainable growth over the coming years. With that, I conclude my remarks. I would now request the moderator to open the floor for the questions. Thank you very much.
Operator
Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Isha Shah from Malhotra Family Office. Please go ahead.
Hi, sir. Thank you for the opportunity. I have two questions. So firstly, on the Jabalpur FOCO store, could you please help us understand the economics of the model and the franchisee partner? And how does the company earn under this arrangement? Is it through revenue sharing, operating fees, product margins, or is it a combination of all of these? And also, if possible, could you please quantify D.P. Abhushan's share on earning potential under the FOCO model?
Thank you for asking. So, you want to understand the FOCO matrix, basically?
Yes, the FOCO matrix, the economics model, and also how does the company own under this arrangement? Is it through revenue sharing, operating fees, product margins, or it's a combination of these?
So, yeah, basically, in our FOCO model, the franchisee, or the inventory, and the capex, so both. This is done by the franchise owner and then we will share them with the revenue. So we decide the different category because we are selling the three four categories. So we have a gold jewelry, we have diamond jewelry and the silver jewelry. So according to the jewelry categories, we are sharing some revenue with them. So this kind of the model, especially we built with the Foco model.
And so, secondly, on the upcoming Cocoa stores at Jodhpur, could you please provide the expected capital expenditure and the opening inventory requirement of these stores? And also, what kind of revenue potential and payback period should we expect on one of these stores?
So, ideally, we are expecting the break-even is the 6 to 9 month for the new stores where we are going. And approximately, the Jodhpur, the inventory requirement is somewhere around 60 to 70 crores is the requirement for the inventory. And the capex will be somewhere around 3.5 to 4 crores, the capex require.
Okay, so thank you. That's all from my side.
Operator
Thank you. The next question is from the line of Atisha Jain from Tikshavild. Please go ahead.
So, firstly, thanks for the opportunity, and congratulations on the fundraise. Sir, I have two questions. Firstly, regarding the fundraise, the price at which we raise the funds. So, it is quite substantially lower than the closing price of the day, first. And second, recently we gave a update regarding the safety season sales. So, can we please expect more such updates in the future, like other players in the industry also do?
Okay. So, at the end. Let us take first question about the pricing mechanism, which you were asking. So, there is a dedicated formula available, which is given by the SEBI for calculating this price. And when we decided that we need to raise this fundraise, so this is that there is a reverse working happens for last 90 odd days about the pricing and taking that as an average, then we decide the final pricing. Basically, that entire understanding happened. Okay.
Sir, I'm not asking all of the legal and regulatory fights. I'm being a minority shareholder or analyst from that perspective. If a minority shareholder acquires within last week, he's acquiring between 1500 to 2000 or 2100. But we are allocating shares to the institutional investors. Lower price.
No, that's not the case. That's not the case. When we deal with pretentious deals. So, of course, it has to happen with the close vicinity of the investors who are keenly interested to invest into the company. And being a listed company, it always has to be at par of the market price and the necessary formula given by the SEBI. So, this is that only one can pursue and can apply for the PREF. First, As an individual or as a minority, of course, when we look at the price of today, then definitely everybody will be like, but it is not like an open for sale kind of mechanism. It is a preferential allotment. So, of course, it has to be within the close vicinity of the investor only. But yes, the pricing is as per the market formula given by the SEBI. And the second one was about the festive season, which you were asking about. See, definitely, as all our promoters and Andy and Anilvia, whatever, told that the season got shifted from the second quarter to the third quarter, basically. So, of course, now the season has started for festive as well as for the wedding, and we have seen a phenomenal response in our first month of this particular quarter, and hope so that the same momentum will remain continuing. We will keep on posting all the updates to our stakeholders.
Okay. Thank you and best wishes. Thank you. Thank you.
Operator
Thank you. A reminder to all the participants, you can press star and want to ask questions. The next question is from the line of Divya Dagar, an individual investor. Please go ahead.
Hi, sir. First of all, congratulations for such numbers. I have a couple of questions. My first question is, can you bifurcate the data in GML and non-GML?
Good morning, everyone, and welcome to the call. Let us understand that we have a banking funding with all the banks with the understanding of the entire limit, which is a fungible between GML and the non-GML. GML always being an opportunity we look at from the market perspective, we compare with our international pricing, with the sports market, and then this is that we always look for availing GML. And from an overall limit perspective when we look at, then of course around 60-65% is our GML dedicated limit available with us from our total limit. So whenever we get opportunity, we do fungibility and can avail that GML.
My next question is, I want to know the how much of the asset is from advancing customers this is quarter.
So, see, we have several schemes riding on our company's platter. In first quarter, we introduced one scheme with the name called Gold Swan Plus scheme. So, when we look at that scheme, then definitely we got a wonderful response. That is, Gold 1 Plus scheme is nothing but a scheme where a customer comes and enroll in that scheme and making payment on monthly basis. Besides that, we, being a company, provide a dedicated gold weight line to that particular EMI of every month. So, customer gets an advantage here of price fluctuations. So, it is like averaging its pricing with regard to their weights. So, whenever a customer makes payment, on the same day, we apply the gold rate, and then the dedicated gold is being, like, aligned to that particular customer in our system, so that after 9 or 10 months, whatever scheme is there, then this is that customer can come and buy jewelry from our store. So whatever balance lying in that particular scheme, we adjust that particular gold with that particular invoice and remaining, if any, available, then customer makes payment of that additional amount only. And when we look at on an overall basis, then around from this particular Goers 1+, around 50 crores, we have already got a contribution in last almost 5 months. And the remaining other schemes of 9 plus 1 and 10 plus 1 is also available in that place.
Okay, that's good. I have this last one question. And can you tell me the rate of inventory that you have as on date?
Rate. Rate of inventory. See, we follow.
So, we follow weighted average cost concept. Okay. So, what happens that whenever we buy any new jewelry that is being adding to our existing jewelry and the new weighted average comes on that particular line item. So, broadly, we are categorizing our entire inventory into gold, silver, and studded mix. Okay, and as on today, when we look at, then, Around 1,250 CR of inventory as on 30th of September that was available with us. And broadly, when we predominantly bifurcating these inventory into the three segments, of course, the 90% around inventory is from gold segment only, and remaining 5 to 6% is dedicatedly For studded mix and the remaining is for silver and gift article. This is how we have allocated. And basically that only cells are getting generated also.
Okay. That's all. Thank you so much, sir.
Operator
A reminder to all the participants, to ask questions, you can press star and one. The next question is from the line of Saurabh Patel from Purnartha Investment Advisors. Please go ahead.
Hello, sir. Hi. So, I have one question to ask and one request to make. So, my request is to can you just publish the store-wise revenue and bold volume of each quarter basis because that will be very sufficient, very useful for the investor.
Okay, so Saurabh, actually what happened as of now, so we have only 14 showrooms. When the list will gradually increase, then it would be very difficult to publish the store-wide revenue on our presentation event. But yes, we will consider this, that how we can provide you geographical information. But yes, from our industry perspective, it is not like that we take decision basis, our store-wide revenue. We always look on an overall picture, like how the company is selling and how much the company is like arranging their inventory. Because it is like geographically somewhere, some festive comes in some period and some festive comes in a different period. So the inventory gets resuppled on periodic basis to that. But yes, we'll definitely look into this and we'll provide geographically also.
Yeah, thank you so much. And my question is again on the inventory part. So, how much of the gold price risk do you actually carry today? And how much of it reaches the profit, actually?
Profit. So, basically, gold value appreciation, inventory gain, basically. How much of the total inventory gain, which is actually booked on the pay and then?
So, see, frankly, there is no specific formula which can be given with regard to when we are applying weighted average cost. But yes, on an overall basis, when we look at then the price which is available as on today and the price at which we are selling to the market around 18 to 20 percent, not more than that because the gold prices are keep on the higher side. So 18 to 20 percent might be the inventory gain available in that available profit.
Okay, so, and what about the balance 80%?
It is, of course, from the making charges only. It is pure making charges. Reason being, we are charging making charges based on the present gold rate and not the historical price. Okay, the mechanism works like that way. So, whenever gold prices may remain high, of course, the making charges contribution will remain high only. So, the rest of the profit is 100% from the making charges. Okay. Thank you. Good.
And one more question, sorry about that. So, you have disclosed the specific revenue for this quarter, for this period. So, how much of this is the price growth and volume growth? Can you probably buy for that?
See, when they look at our HaapYalli number, Because the season has got shifted from one layer to another as we have discussed also that this is a seasonal business and of course whenever these kind of seasons remain shifted from second quarter to third quarter, it is always like when we look at numbers, then everybody gets confused why this is coming slow or why this is coming less. But this is not the case. Definitely, when all these numbers put together, when we look at, then happily performance should be visible and should be seen in a proper way. So, if we look at the halfway performance put together, then the gold component from that overall perspective. Of course, as compared to the last year halfway number and the current year halfway number, when we compare, then from amount perspective, we have received almost 8% of growth in the gold. In silver, we have received almost 68% of the growth in the value. And diamond, yes, it is not yet fixed. So we are lacking on it and we are working on it. So definitely the big contribution is going to come from the diamond being a good revenue factor.
Okay. Okay. Thank you. Thank you so much.
Operator
Thank you. Thank you. The next question is from the line of Mayhul Parikh, an individual investor. Please, go ahead.
Thank you, Mevil. Thank you.
Thank you, Mevil. Thank you for asking for an open story in Indravaaz. We have entered the Gujarat. Our plan is to get back to the rest of the country. We have entered the Daos. Soon, we will be able to get back to the country.
Operator
Thank you. The next question is from the line of Nani Sharma from Malhotra Family Office. Please go ahead. Yes, ma'am.
Thank you for the opportunity, sir. Sir, I have just a question that several district rugby players reported double-digit revenue growth during this quarter, whereas our company reported a revenue decline of 21% year-on-year. So, while there is a shift in the festive season, I understand, from Q2 to Q3, can you please explain the key reasons for this divergence versus peers? And also, was this decline entirely due to the timing of festive and wedding demand, or were there any other regional differences due to demand?
So, see, as I said that we should look at from the half yearly perspective, which will give the true and the fair view. When we look at the half year, then definitely there is a growth of approximately 7% on compared to the last half year and this half year. Number one. Number two, see, our main core revenue is coming from wedding and festive season. When you look at our presentation also, it is very well mentioned there around 75 to 80 percent is constituting from wedding and festive. Unfortunately or fortunately, they have fallen in the quarter three. So, definitely when we will look the number of quarter three and put together all three quarters, then certainly the dynamics will get changed. There is no doubt about that. The reason when we look at from others' perspective or peers' perspective, they have some geographically different presentation as well as they have product mix categorically different, like some of them are getting more diamonds, some of them are not like predominantly situated where our geography is there. So, this might be the reason only. But yes, from put together all three quarters, then the dynamics will be at par what others are carrying.
Sure, sir. Thank you for your explanation, sir. So, just one more question. What percentage of the current sales is supported by the gold, old gold exchange? And how has this changed compared with the last quarter and FY26?
So, what happened that from the first quarter, then our Honorable Prime Minister conveyed some message to all the public not to buy any gold, etc. Then people were taking time to understand what was their intention, because he was trying to say that we need not to go for the import of the gold. When people understood this in a proper intent manner, and then all the dwellers, you might have observed that all the dwellers have started the exchange program. Which actually flourishing their cell, reason being when the gold prices are high, it is always advisable to use your old gold and exchange that. It will be cheaper also and it will be beneficial also. But yes, whoever has a wedding dedicatedly in their family that is a purpose-led wine, they will not look for the exchange perspective. But definitely this exchange program has given an additional room to our business also and around 28 to 30 percent of our business is from exchange program and hope so that this may remain continue for over some of the quarters also because of the instability in the gold prices. The more the gold prices will be fixed, people will start again investing with the fresh buying.
Understood, sir. Understood. Thank you for your explanation, sir. This is really helpful. Just one last question from my side. Considering that we had a very strong base in the second half of the last year, that is FI26, so how confident are we about maintaining a growth, healthy growth in second half of FI27, that is H2 of FI27? And like, if you can provide any ballpark guidance for FI27 revenue, considering the contributions from all the new stores, sir.
So, in general, what we have seen, the trend of the entire industry works, like in the first quarter, every dwellers give between 30 to 40 percent of their total contribution or total revenue, and the remaining comes in the second half because of the, you can say, festivities, weddings, and all. It is like a seasonal kind of thing. Okay, so in our case also, it has been like a case between 28 to 35% comes in the first half and the remaining comes in the second half. And we are definitely firm and we have got good response also wherever we have opened our upcoming and recent showrooms. The market is definitely very good in those geographies, and we'll get a good growth as anticipated and as conveyed earlier.
Okay, sir. That is very helpful, sir. Thank you for your assurance. Thank you, sir. All the very best.
Operator
Thank you. Thank you. A reminder to all the participants, you can press star and 1 to ask questions. The next question is from the line of Mehul Parekh, an individual investor. Please go ahead.
Thank you very much, sir.
Operator
A reminder to all the participants. Thank you. That was the last question for today. I now hand the conference over to the management for closing remarks.
Thank you, everyone. Today's call, you all have to take care of your questions for the Q&A. We will try. We will come to you. It's very good for everyone. Today's call, you all have to take care of your questions for the Q&A. Thank you.
Operator
Thank you. On behalf of DP Abhushan Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
