Buy P N Gadgil Jewellers; target of Rs 825: Motilal Oswal

Motilal Oswal's research report on P N Gadgil Jewellers

Jewelry demand was subdued in 1QFY26, particularly in Jun’25, due to a ~30-35% YoY surge in gold prices (crossed INR100,000 mark in retail market). Consumers started postponing shopping, which is a typical trend during such steep inflation. Besides, there were two festivals, Akshaya Tritiya and Gudi Padwa, in 1QFY25, whereas 1QFY26 has only Akshaya Tritiya (Gudi Padwa was on 30th Mar’25, company recorded sales of INR1,235m). Demand in the studded and polki segments remained resilient, supported by stable diamond prices. Demand recovery is expected in 2QFY26, driven by the onset of festive occasions (Raksha Bandhan and Ganesh Chaturthi) and anticipation of stable gold prices.

Outlook

The company has so far successfully rolled out new stores and achieved breakeven for all new stores opened in FY25. We will keep an eye on its entry into new states and its success in those markets. We reiterate our BUY rating with a TP of INR825, valuing the stock at 30x Mar’27E EPS.

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