PNGS Reva Diamond Jewellery Limited (PNGSREVA) Q3 2026 Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to the PNGS Reva Diamond Jewelry Limited Q3 and 9-month FY26 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 this conference call, please signal an operator by pressing star then zero on a touchstone phone. Please note that this conference has been recorded. I have with us today the senior management team of P&GS Reva Diamond Jewelry Limited, Mr. Amit Modak, whole-time director and CEO, and Mr. Aditya Modak, non-executive director, who will represent P&GS Reva Diamond Jewelry Limited on the call. The management will be sharing operating and financial highlights for the quarter and nine months ended December 31st, 2025, followed by a question and answer session. Please note, this call may contain some of the forward-looking statements which are completely based upon the company's beliefs, opinions, and expectations as of today. These statements are not the guarantee of company's future performance. The company also undertakes no obligation to update any forward-looking statement to reflect developments that occur after a statement is reached.

I now hand the conference over to Mr. Amit Murduk.

Thank you and over to you, sir.

Yes, good evening, everyone, and thank you for joining us on this call today. I welcome you to the maiden earning call of PNJS Rewa Dimensions Limited to discuss our third quarter and nine month ending for FY26 performance. I am delighted to speak to you all for the first time after the successful listing. I hope you all have gone through the results which are available on the Stock Exchange website and Stock Exchange portal as well as on our website. As this is our first earning call, I would like to take a few minutes to take you through the business model and journey of our company and our promoter group. Our promoter group is a PN Gargill and Sons Limited as a corporate promoter, along with Govind Gargill and Renu Gargill as an individual promoter. Govind Gargill has got 45 plus years experience in the jewellery segment. And P. N. Gadigal name and company as such has got 190 plus years legacy. It was started in 1832 in Sangli, subsequently came to Pune. And after that, in 2012, three brothers who came to Pune got started with their successor, the business separately. One of them is a P. N. Gadigal son's team. PN Gadigal Sons Limited established in 2012, and our promoter has got, corporate promoter has got 34, their showrooms, mainly in Maharashtra, 32, one in Gujarat, and one in Karnataka, so total 34 stores are there. They have got, whatever their turnover and all these things, you can get it from their website. So, I will not give up the time for that. This is all available on their website regarding their financial performance and financials. This, our entity is a card out entity out of the total PN Gardening funds limited. It was card out basically for giving the attention and giving the focus development to the studded jewellery. That is a diamond and real stone studded jewellery. Studded in the gold, it may be a 14 karat, 18 karat, or the platinum as the choice of the customers. Regarding corporate restructuring, it was restructured. I will not say restructured. It was card out in February 25. Through the slum cell transaction and business transfer agreement. Through that agreement, we took over the entire HR or the manpower who was working earlier with the PN Guaduil Slums for their diamond division. So, we got the ready, knowledgeable people available for the diamond jewelry segment. Generally, diamond jewelry segment requires a specialized people who know about the diamond, assessing, then classification on QC and all these things, but we got that ready thing. At the time of carving out, we got all their 33 SIS, which were there at that time. As our SIS, because their corporate shops, we use as our SIS, we sell our products in their stores on the SIS basis, and those SIS are run either on a FOCO basis or a FOCO basis. One location is on FOFO basis, another 33 locations has on date because just one week back one SIS was added and so those 33 become 34 and out of this 34, 33 are FOFO and one is a FOFO. FOFO is a franchise-owned, franchise-operated and that is in a mall because in mall generally two GST numbers are not allowed to be used under one roof and that's why we need to carry it out as a FOFO. We also have got one store on a COCO basis. That is our basic aim to get it separated out, to start an exponential growth through the COCO model. Because of the lower capex is required for the staking of the independent diamond jewelry store, rather than along with the plain gold jewelry and silver jewelry, the capex is very high. So, if we remain depending on our corporate promoter and their stores, then our passive growth will have limitations. But when we separate out it and started thinking about the cocoa, It is faster than the passive growth, and that's why we have obtained this route, which is well explained in our RHP, DRHP. Our one Cocoa store is in Phoenix Mall, Pune, at Walker. And herein after, there will be a mix. Few SIS may get added if corporate promoter adds their store. And cocoa will get added as described in the RHP, DRHP, where we have said that in the next 24 months, we are planning to expand with 15 cocoa model stores, which are catered in Maharashtra as well as Pan-India. More precisely, we are thinking to cater the north part of the India, and when it will be outside Maharashtra, it will be mainly in the mall. And Tire One City because mall has got generic football and it is easy for us to create a brand awareness in the area where we are not at presently present. So that is regarding the things and very soon in another, say, eight days time, we will add one Cocoa model standalone EBO. Thank you. The growth strategy for us is a... Expansion through the cocoa model stores in next 24 months as described in RHP, DRHP to the extent of 15 locations. For that, the out of total IPO proceeds 287 crore precisely will be the proceeds invested in 15 stores in their infrastructure as well as inventory. All models will be asset-like models because only inventory will be the major investment. Entire other things like pre-noises will be rental. Infrastructure will be created by company through their own spending. Other than that 287 crore rupees capex, we are set aside 35 crore rupees for 15 locations for exclusive branding of those locations because those will be the standalone store and that standalone store will require more attention to get created from the people through the marketing effort. And that 35 crore or say 2 crore rupees approximately per shop will be spent during the period of 8 to 18 months after getting that location started. I am not saying after 8 months I will start marketing. It will be scattered, that spend will scattered between 8 to 18 months from the date of start. So that will add to the brand value. It will be beneficial for the existing sales also, as well as the new location sales and creating awareness about the people, people's awareness about the new location, which is a standalone location. Out of total IPO proceeds at 380 crore, 30 crore will be roundabout IPO expenses, which are very well mentioned in our prospector, and rest around 28 crore will be the GCP. The coming financial... For our current business, jewellery is a seasonal business, first of all. So it cannot be hard and fast compared with Q1 to Q2, Q3 or Q3 to Q4, or H1 to H2. Because in H1, there are less festivals as compared to the H2. H2 has got India's busiest festival, that is Navratri and Diwali, which is almost a 45 days festival. Then, as far as diamond industry is concerned, diamond industry is related with the Christmas, diamond industry is related with the year in New Year, then Valentine's Day, and subsequently coming that godipadwa, which generally comes in the last part. H2 is the busiest period for the diamond or the studied jewellery or the fashion jewellery kind of the industry because there are festivals other than our Indian culture festivals which are relating to that business. Generally studied jewellery business relates to the Gen Z because they like the colors, they like the design, they like the jazzy thing, they like the pocket friendly thing. And corporate working woman, because she also has got aspiration to have different designs, different colors, and different make, and that too along with the brand. Because generally, their social status get maintained if they pronounce some brand while telling to their colleagues from where they have bought the product. If they will say, then it doesn't create a value for them in the society. So they generally, that corporate working woman generally prefer to go to the branded shops. And that is also a very main reason why we have carved out this entity and created brand for the diamonds. Because otherwise, if somebody is buying from the traditional jewellery or the family jewellery house, How they can pronounce or she or her, he can pronounce that from which brand, because that shop's name will be based on the family jeweller name. And if she or he pronounce that brand name, it may not be very much relevant or known to the common people. So instead of that, if it is a specific brand to the product, it is easy for them to protect them in their society. We have got traditional business also simultaneously because we are from the 190 plus years legacy. And their legacy is getting continued help for us for selling our product with more reliability to the society. Because there are many startups in the market who are coming with the diamond jewelry, but for creating awareness about their reliability. Or telling people repeatedly that we will be there, when you are there, there will be buyback or the exchange opportunity for you. We will be there to create that confidence in the investor mind or the customer. They need to spend heavily on that, that we are lucky, that we are already known in the society, that we are there for last 190 plus year. And very important USP for us, that not our single shutter is closed down or pulled down at any point of time in past. So people have got that pay. If I will come for buyback or the exchange. The shop or the brand from where I am buying, they will be there at the time when I will be having Icchha, I want to buy back value or the exchange to the new product. I will go to the now financials, which you must have got through our disclosure, which is made on the BSE site as well as our website. Revenue from operation for only quarter three was 144.18 crore, with EBITDA of 33.71 crore and PAD of 23.11 crore. It is only for quarter three. If you go with the quarter 2, Quarter 2, revenue was 102 crore, EBITDA was 19.32 crore, and PAD was 12.70 crore. So, on a Q over Q, I personally, at first, only I have told that Q1 to Q2, Q2 to Q3, it is not hard and fast comparable, but still, Q2 to Q3, growth in revenue was 40%, EBITDA was 74%, and PAD growth was 82%. Summary for 9 months ending December 25, also given in the hour result, which says that revenue from operation are 300.90 crore, EBITDA is 64.90 crore, and PAC is 43.23 crore. Our 95% sale get contributed from presently from the Maharashtra location. And around 5% sale gets contributed from Gujarat and Karnataka. But as we will start setting up stores outside Maharashtra, this cocoa store, this contribution other than Maharashtra will grow. Q3, our footfall as compared to Q2 increased by 66%. And we are very satisfied with this performance of the growth. Regarding the same stored work, presently we are operating on the 33 SIS, which were there earlier also, and right now also, and only one COCO which has first added. Late September, and one SIS is added, but that is not added in last quarter, which we are discussing. So those 33 SIS, which we are operating, where earlier also was there, so whatever growth is there in the business, you can take it as a same store growth also. So, what is the same store growth? We are not presently having any separate data that new stores have got so much same store growth and old stores have got so much same store growth. So, current period, all same store growth is from the earlier business one. I think that I have given you the reasonable idea. I will open the forum for the discussion, question and answer. I would like to reply as far as possible without disturbing the forward-looking statement limitation to answer all the questions. Thank you for listening.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants, you are requested to use answers while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. A reminder to all, you may press star and 1 to ask a question. We have the first question from the line of Dasha from Sapphire Capital. Please go ahead.

Hello. Am I audible, sir?

Yes, we are very much audible.

Yes, okay. So, thank you so much for the opportunity. So, firstly, sir, you mentioned that we are planning to open 15 stores in the next 24 months. So, can you give us a breakdown in terms of how many are we planning to open in FI 27 and how many would be in FI 28?

Since it is a 24-month, that is a 2-year period, it will not get separated out in exact financial advice.

But, uh, principally we are thinking that 628 stores will get open FY27.

Sorry, I couldn't hear that.

There is no hard and fast distribution regarding the year-wise thing, because, uh, getting the location, good location, starting the business and all these things, there are subjectivity, but still one store is getting opened in next week. One thing. Secondly, 8 stores will get open in FY27, so it will be 9, and remaining 6 will be in FY28.

Okay, and we are expecting...

But again, as I said, there may be 1 or 2 plus or minus because of the limitation regarding the availability of the space and location.

Right, okay, yeah, understood. And you are expecting 2 CRKPX per store, right?

No, no. Truth we are marketing capex per store. Otherwise, capex per store, if you go with the average of 288 crore or 287 something figure. So, on that basis, capex is around 19 to 20 crore on average prices. Basically, stores will have three type of stores, small, medium and large. So, larger stores may have capex of around 25 to 30 crore. Medium-sized store may have capex of around 18 to 17 crores, or small even have capex of 15 to 17 crores.

So, I was asking about the marketing capex would be 2CR, right?

Yes, yes. Marketing capex will be 2CR, and it will be spent from first day to 8 months or 18 months. It will get scattered well. It will not be only a burning of the cash. It will be well settled kind of the market. Thank you.

Okay, okay. And so what sort of geographies are we looking at? Because currently I think majority of our sales come from Maharashtra. So what sort of geographies are we targeting?

Basically, there are nowadays dwelleries houses in India and two categories are there. One are the regional player or the regional brand and another is the national brand. So, as a PN Gargill brand as such, it's a regional brand, Maharashtra, Maharashtra thing. But we also have got one in Gujarat, one in Karnataka. And in future, also almost 60% will be in Maharashtra and 40% will be other than Maharashtra. And this other than Maharashtra, as I said, those will be mainly the top part of the India.

Okay, okay. And in general, sir, what sort of timeline do we see for these stores to break even because these are newer geographies? So, what sort of timeline are you seeing for the break even of these stores? When are we expecting the break evens to happen?

If it is within state, it will take around 12 to 18 months for the getting break even. If it is outside Maharashtra, it will be somewhere 18 to 24 months.

Okay, okay. That's very clear, sir. And this quarter, we are around, I think, 23% sort of EBITDA margin. But given that we're going to be expanding and that requires a lot of KPEX and spending on marketing, what sort of margins are you seeing going ahead?

For initial period of two or, preferably saying, 30-month period, you can say. There may be that dent to the extent of the marketing cost, but at the same time, there will be increasing the business. So, on the percentage basis, there may be some dent of the 100 or 200 points, but otherwise, in absolute value or absolute rupee term, it will be higher than the current.

Correct, correct. And what sort of growth should we look at for FR27 and FR28?

See, right now, I have got a hard and fast comparable figure for the previous figure. So, once I close the year, and I will have 2123 for everything done in this present company, I will be more prepared to speak on this question when we will have annual army call. That will be sometime in May.

Okay, yeah, sure, sure. Fair enough, sir. And, sir, just this quarter, because this quarter is almost at the end, so how has this quarter been in terms of the footfalls, and how has the quarter panned out so far?

Q3, I told you that 66% higher as compared to Q2, but again, in a jewelry industry, I have got more than 25 years experience of this industry. I have seen that this industry is a very seasonality kind of industry, and so all Qs are not hard and fast comparable with any other Qs, Q1 to Q2, Q2 to Q3, or Q3 to Q4. Again, Q4 to Q1, that kind of change is not possible because festivals are getting shattered in different quantities. Secondly, regarding the current period, we are progressing satisfactorily and in line with what we have progressed so far in last night.

Okay, okay. That is it from my side. Thank you so much, sir.

Thank you.

Thank you. A reminder to all the participants, you may press star and 1 to ask a question. We have the next question from the line of Rajdeep Mehta from Philippe Capital, India. Please go ahead.

Hi, Mr. Mollard. Good evening. Would it be possible to repeat the Q3-SY26 EBITDA number and the PAC number for Q2?

No, I don't get there, sir.

Please.

Okay, sir. Thank you.

Hello. Hello. Please ask again. I am not getting your voice clear.

Hi, sir. Am I audible? Yes. Sir, I wanted to ask you if you could repeat the EBITDA number for Q3 and the PAC number for Q2.

Yes, Gita for Q2 is 19.32 crore, and Tag is 12.70 crore, and for Q3, Vita is 33.71 crore and fat is 23.11 crore. And for 9 months, okay.

Thank you. We have the next question from the line of Shubanu from 3Head Capital. Please go ahead.

Hello, sir. Hope I am audible.

Some disturbance is there. Air is there. We are travelling. Sorry, sir. Can you help me? No. Air voice is coming. Can you help me now? Yes, you are very well, but there are several. You ask the question. If I don't get it, I shall ask you.

Okay, okay. Sir, currently we are only focusing on studded jewellery. What is our current studded jewellery mix? Hope this will be, hope, 50%?

No, right now, studded jewellery is total studded jewellery we are handling with. We are not selling gold jewellery, and platinum jewellery we are selling, but that is less than 5% of our total total.

Okay, then who are our major competitors?

Major competitors are all corporate brands which are there in the market. I have got some limitations, so I cannot pronounce the names directly, but you know where they are working in the pan-India basis, in all malls, all those are present, so we will be there along with them.

I think Caroline and Bluestone will be our major competitors in this line of business.

No, they have got some product line which is comparable or matching to our product line. But we, again and again, I am saying that we have got no spin to necklace and that to bridle, this kind of thing. So our product line is that kind of thing. It is not only the fast move. So we have got no spin, which is 10-15,000, and necklace, it is of 12-15 lakh, that kind of thing. So, whoever is in this ring, they are all my comments.

Understood, understood. Sir, my next question is, what is our average revenue per Cocostore?

Cocostore is just now started in last week of September. And in this Q3 result, it was operating, but it was a newer store, and for this one quarter, it has performed around

2.5 share, 2.5 share in one quarter. It was a first part. Okay, okay. But you said average becky-bill time around 12 to 18 months in Morasta. That means are you thinking around 12 to 15 car revenue for becky-bill?

It is generally linked with the inventory which we are keeping in the stock. Generally in the diamond industry, the stock ton is low as compared to the plain wool jewelry. So, it depends on how much you invest there, how much inventory you keep there, and what is the location and what is the area of servicing to that location, how much population is there, surrounding population, but it may be near to what we are expecting in a period of 18 to 24 months.

Okay. Thank you, sir, and wish to luck. Thank you.

Thank you. Before we take the next question, a reminder to all, you may press star and 1 to ask a question. We have the next question from the line of Sachin Mistry, an individual investor. Please go ahead.

Hello. Hello. Good evening.

Good evening, everyone. Yes, sir. My question is, we are operating through the 24 stores. How many stores under the Cocoa model and Focoa model?

We are operating at present total 35 locations as on date, but in last quarter for which we are talking, we were operating in 33 SIF and one Cocoa store.

Okay, sir. And may I know the margin per store under Cocoa and Focoa model? Per store margin?

First, our margin is not separately calculated. So, as an entity, margin is calculated. All the POCO or POCO stores, which are the SI, they were in existence when we took over that division or that card of business. So, those are not new. Those are existing. If you refer to our DRC, you will find that last year's surplus or more. Including 2 months separately operated and 10 months operated in the earlier entity on that basis that we stated things are there which are around 258 to 259 crore something. So that was a turnover already which was there. So and there was a profitability of around 58 crore tax there.

Sir, my another question is, as we are working under the organized players, so the Maharashtra organized market is near about 37 to 38 percent. So, do we have direct competition by any unorganized players?

No, every corporate or organized player has got competition with unorganized players, not only us. So, entire organized sector has got competition with unorganized. But moreover, nowadays, it is looked at organized sector is growing faster. I mean, if 5 years back, the size of organized sector versus current organized sector. So, organized sector is growing, and disciplined organized sector is a major competitor for the unorganized sector. Because quality assurance and service assurance and customer relations. And product variety and all these things are better with the corporate and organized player. So, they are actually the threat for the unorganized player.

Okay, sir. And my other question is, yes, we are, we will open the 15th store. So, may I know the where we will open that store, in which state?

It will be around 55 to 60 percent in Maharashtra. And remaining will be in North part of the India. As a business, it is very difficult to pronounce outright the locations and all these things because there is a competition and first more advantage required to everyone. So everyone try to move first in some territory where other competitors have not reached. So it is very difficult to detail about these things.

Yeah, that is on my side. Thank you, sir, and all of you. Thank you.

Thank you. A reminder to all the participants, you may press star and 1 to ask a question. We have the next question from the line of Prashant Shivdar, an individual investor. Please go ahead.

Yeah, thank you. I would like to know what is the operating margin that we are trying to look at going forward.

This industry has got operating margin of around 30 to 40 percent kind of the level, and we will be near to that only, that our gross profit margin on the jewelry sale will be around 30 to 32 percent.

Okay. Thank you.

Thank you. A reminder to all the participants, you may press star and 1 to ask a question. We have the next question from the line of Vedant Roshi, an individual investor. Please go ahead.

Hello, I am Audible. Yes, yes, very much. Yeah, hi, sir. So, first of all, congratulations on a successful listing on the median call. Yes, thank you. Yeah, so most of my questions are answered, but some of the basic questions which I would like to get clarity on is, can you elaborate on the store expansion strategy? I think we are moving to a cocoa model now. So what is the strategy behind this change?

The mainly if, as I said at my earlier statement, that if I want to remain with my corporate promoter and as they grow, I will keep on expanding through their shops in a size basis, then their expansion has got limitation because that single shop, if they want to set up, it costs around 65 to 75 crore rupees then. To set up the plain gold jewellery, and plain silver, and for structure, capex for the inventory and all these things. So, it was a limitation for the expansion. So, we thought it fit to separate out that entity and create a diamond jewellery brand. And to cater to the customers through the standalone shop on the cocoa basis that company operated, company owned, and exclusively for the diamond jewelry, which required capex in the range of small size of the shop around 18 to 20 crore, medium size shop 22 to 25 crore, and large size shop around 30 crore. So, it requires lesser catech, and so expansion is likely to be faster as compared to the plain gold jewellery as it is.

Okay, okay. And, sir, my second question would be on the line of lab-grown diamonds. So, do we see any impact from this segment? What is the consumer sentiment and demand regarding this?

See, in India, we like design. In India, we like design because we sell mainly the bracelet with many stones studded in it. Or even our finger rings are also having studded many smaller stones. We are not using generally studs. That are the, what do you say, solitaire kind of the stones. 30 cent, 50 cent, 1 carat, 2 carat kind of them. That is a fashion mainly in Europe and US side. And lab-grown has impacted that studs or that solitaire kind of the stone rather than the small stones which are getting used for creating designs in the necklace of the facelift and cum runs or the ear rings or the finger rings. In our books also, we deal with the designs mainly, and book content almost more than 95% from the star mille or the smaller kind of the diamond, minus kind of the diamond. So, those smaller diamonds doesn't have that much thread from the lab-grown diamond, and that thread is mainly for the pointers or the polytears.

Hello. Hello. Yes.

Yes. So, seeing the healthy performance is quite hard.

Sorry to interrupt in between Vedant, your voice is not audible.

Hello.

Your voice is breaking in between Vedant.

Hello, am I audible now?

Yes, please proceed.

Yeah, so, sir, considering the healthy quarter of financials which we have reported, what can we take as a sustainable EBITDA margin going ahead? On a percent system, you are talking or what? On a sustainable basis, because if we see, the margins seem to be elevated compared to other jewelry players on a historic trend. Like some of the competitors, they report around a higher single digit, and we have reported in the line of 20 odd percent. So what can we take as the sustainable EBITDA margin going ahead?

If I differentiate in quarter and quarter, so in Q1, the EBITDA margin was around 22%, Q2, it was around 19%, Q3, it is around 23%. So, that also changes with the top line contribution because there are some fixed costs which are getting divided on the top line. Regarding the competitors' financial percentage and my financial percentage, I said very precisely that we are not cash burning, any cash burn is there for creating awareness to the people regarding our reliability, because in diamond business, reliability is very much required. In gold, you can go and exchange or encash that gold anywhere because it has got fungibility. Just put it to the character meter, check the purity, produce the documents of your purchases, and you can exchange or encash. But in diamond, you need to go to the same dweller that is who are catering to you for that ornament. And we or that entity only can exchange those ornaments for the new purchase or buy back those ornaments. And for that, you need to be there in market. And as I said, we are there having 190 plus years legacy. And we are there in the market with the DSP that we have not shuttered down any of our shutter after once it is opened. So spending for that reliability, there is no spend from our side. New startups who are coming in this business, they need to spend, because they need to show the people through the spend or through the more and more locations open, irrespective whether they are profitable or not, to create awareness to the customer that yes, we will be there whenever you will have option for the exchange or buy-in. That spend is not with us, and that is improving our margins as compared to the competitors. That is the main difference between us and competitors.

Right, right. And on the seasonality basis, sir, do we have any preference, I mean, seasonality like H1 or H2 performing or something like that?

Generally, H1 will have around 35% and 60 to 65% free H1. Because H2 has got many festivals. In India, busiest festival will be always in Q3. That is Navratri and Diwali. Like this year, 10 days were in September and 10 days were in October. But generally, it is in Q3. And for diamond jewelry industry, there is a Christmas, there is a year eight, there is a Christmas, there is a Valentine's Day. So, these are the added festivals in Q3 and Q4, that is the H2. So, H2 is always better as compared to the H1.

Right, right. Yeah. So, yeah, thank you, sir. Thank you for the elaborative answers. Most of them got answered, and all the best for the upcoming results. Thank you. Yeah, you are most welcome.

Thank you. We have the next question from the line of Prashant Shivdar, an individual investor. Please go ahead.

Yeah, thank you. Just one thing I wanted to ask, like currently the war situation which is going on, do you see any challenges in supply chain or a business model that we are working on?

Generally, in diamond industries, stock turn is very slow. As compared to the plain gold gel. Secondly, even though there is a war, there is no scarcity in Indian market for the gold. And secondly, diamond, many diamonds are getting recycled by the manufacturer, which they are purchasing from the market, or they are importing it and cutting, polishing it. But right now, there is no such kind of scarcity or anything in the market, except little bit price upward movement may be there for the diamond due to the exchange rate, rupee dollar exchange rate. Otherwise, base rates are not getting changed just like a gold, which is moving every minute. Diamond prices are not moving every minute. But yes, to the extent of that currency depreciation or appreciation of the USD, a very small impact may be there. And scarcity is not there, means availability is not there.

And any change in the footballs or something like that.

Right now, we are not finding anything, but I don't know after, means escalation of the situation, if anything happened on the employment or anything happened on the spend or the spends of the people or the availability of the conveyance like scarcity of petrol, that's why people are not in position to move or scarcity of the electricity. There are many things, such kind of the unforced circumstances. For that, we cannot estimate or imagine something in so much in advance, because no one was knowing that war will start, so no one is knowing that when it will cool down or end. So, it is very early to say anything about it.

Thank you.

Thank you. We have the next question from the line of Rahul Kumar Paliwal from Shepa Family Office. Please go ahead.

Good afternoon, sir. Good afternoon. Congratulations for great listening.

Thank you.

Thank you. I have to, yeah, I have to, one interesting observation. And another question followed by it. It is very interesting that both of the, you know, high margin business verticals. Of P&G Group, listed at very early phase of growth, like post Gargi, which was listed around, I think, 25 CR, tiny market cap. Now, Rewa is being listed with just a one Cocoa store, if I'm not wrong. So, that is one store being operated, and that too, with a peer discount of around 30% less. And just for growth capital, that is another thing, not for exit of TE or promoters or something. So, is this planned that way or what is your thought process or strategy behind it? That's question number one.

Yes. And question number two, you will follow afterwards. First, I will reply to you on this question. Is it okay? Yes, sir. So, yeah, asked me a very interesting question, and we have a philosophy in our group that instead of PE, the retail and general investors who are coming and responding to our IPOs are our, means PE, private equity. Instead of giving benefits to private equity participants, we are giving those all benefits to the retail investors or the investors who are participating in the IPO. That is our thought process. Because PEA has got limitations as against you people who invest, gives us love and affection because we reward you and in return you love to us and our performance. And since you have pronounced the name, I will pronounce that name, that Gargi, people have got that experience. It was a very tiny 25 crore market cap. Yes, I do agree that the PE in which discounting we have listed of the studied jewelry business, I don't think that any studied jewelry business is there, diamond business is there, with such a lower PE at the time of the listing. I hope that market will give the justice in due course and market will get rewarded itself through the justice. That's very interesting because, you know... And one more line I want to add, sir. You said that only one COCO is there and I came out with the IPO. It is not like that. I am servicing to the 33 SIS at the time when I have gone to the IPO or the quarter for which we are discussing. And that time only one COCO is there. And we planned COCO in future for the faster expansion. And for that purpose, only this IPO was made. So, set up the 15 cocoa stores. This model is a very interesting model, sir. Vanilla kind of the thing. The existing profit-making business is also there, and growth business is also there. Growth business takes some time to generate the profit, but existing this SIS business, which is already profit-making, gives organization always a profitable organization. So, that is the beauty of this model.

Fair point, fair point, because that is the entire purpose of equity market otherwise, you know, which is right now kind of become an engagement. tool for PE people, actually. So, very interesting, and congratulations to the, you know, entire family and the team for putting value on table for the all investors. My second question is, sir, how are the margin of leader in the segment? And while Reva being in growth phase, will our margin will be maintained or will take a little, you know, downturn initially and then shoot up? As the operating leverage play out when the business scales up in SCOCO and other models and through the growth capital you are acquiring.

So, in a real question also, I said that because of the higher spend on this new upcoming 15 locations for which we have planned 35 crores, and with this current index system, we cannot capitalize these revenue expenses. Again, in GAP system, we could have capitalized and equally debited in three years' time. But now with index, that is not possible. So it will require to charge to the P&L directly. And due to that charging, there may be some 200-300 basis point difference in the profit margin. That is what I am estimating. I am not committing something, but that is what I am estimating. But it will be for an initial period. Once those cocoa goes get settled in 24 months time, that pain will also get. Got it. I will get back into it.

All the best. Thank you.

Thank you. We have the next follow-up question from the line of Subhano from 3 Head Capital. Please go ahead.

Yeah, thank you for follow-up. Seth, could you help me to understand more about our product category? I am asking this simple question because majority of revenue as of now currently come from SIS model and from our corporate store. They also have started jewelry mix, and we are also only focusing on started jewelry. What is the category of product we are focusing in our store? Because customer will come to our SIS stores when we will offer more different type of product in an affordable range.

See, if you see the product range, it will be same which is there in SIS as well as in Cocoa model. Cocoa models are not going to be set up next door to the corporate promoter store, where our SIS is existing. So, it's the only thing earlier we were catering to the SIS, but this was just like a print-led store. And now we'll get started. In a store, where only diamond jewellery is stored, and our corporate promoters are not at all interested in introducing their own studied jewellery or they are not likely to start any studied jewellery business competing with us. Secondly, the area of any city is very big. Like in Pune, if we see 30 to 50 square kilometer kind of the radius is there. And for that main corporate entity, it is not possible to pack all the areas of the pudding. But with lower capex, we can pack those areas where their plain gold jewelry store is not there. And so Coco's model store will be there. And it will cater to the customer because they are believing our brand. But there is no availability for servicing to them because full-fledged store is not in there. That is the same for the other cities as well as north part of the India. We cannot go with the plain gold jewelry store of the corporate entity that our corporate promoter entity, but we can go on the poco basis for the studied jewelry store which has got lower capacity cost.

Okay, understood. Sir, as you said, our average capex per store is around 18 to 30 CR, depends on store size. Out of that, how much is only used for inventory?

Only for?

Inventory.

Inventory? Inventory consists almost 70% of our production.

Okay, 70% of people are prepared for inventory. Sir, my last question is, currently we have around 34 SIS model. How much store FOPO and how much FOCO?

Only one is a FOCO, which is in mall, that is Wimann Miller Phoenix Mall, and other are FOCO, which are on the standalone high street store. Okay. Thank you, sir.

Thank you.

Thank you.

Thank you very much. Ladies and gentlemen, as there are no further questions from the participants, but that concludes the question and answer session. I now hand the conference over to Mr. Amit Mutham for closing comments.

Thank you for everyone for joining this, our maiden earning call and first interaction with the investor after the listing. I hope you got the clarity about your question, and we are always open to reply to investors' question. So, do keep in touch, and thank you, everyone, and good day, and good weekend. Thank you.

Thank you, members of the management. On behalf of PNGS Reva Diamond Jewelry Limited, that includes this conference. Thank you for joining with us today, and you may not disconnect your lines. Thank you.