Buy P N Gadgil Jewellers; target of Rs 950: Motilal Oswal

Motilal Oswal's research report on P N Gadgil Jewellers

PN Gadgil Jewellers (PNG) delivered consolidated revenue growth of 24% YoY to INR24.4b (est. INR23.4b) in 3QFY25, led by strong festive demand during Navratri and Diwali. Retail revenue surged ~42% YoY, while E-commerce and Franchisee revenues grew by 97% and 87% YoY, respectively. The Average Transaction Value (ATV) increased by a strong 22% to INR86,000. Lower bullion sales impacted reported revenue. PNG expanded its network footprint with nine new store openings in 3Q, bringing the total to 48 (37 COCO, 11 FOCO) across 25 cities. The company targets to reach a count of 53 stores by the end of 4QFY25 (two already opened in Jan’25, three planned for Mar’25). Additionally, it plans to add 25 more stores in FY26, with eight COCO stores, seven FOCO stores, and 10 stores under the ‘LiteStyle by PNG’ brand (small-size stores with a focus on youth/modern design).

Outlook

We model a CAGR of 23% in sales, 31% in EBITDA, and 29% in APAT over FY24-27. With the successful execution of store rollouts, an effective gold hedging policy, and margin expansions, we reiterate our BUY rating on the stock with a TP of INR950 at 35x Dec’26 EPS.