Broker’s call: PN Gadgil Jewellers (Buy)

Target: ₹950

CMP: ₹758.45

PN Gadgil Jewellers is the second-largest jewellery retail chain in Maharashtra, with a total store count of over 48 stores as of now (12 additions in FY25YTD). The company reported ₹6,100 crore revenue in FY24, with a total store count of 36 (including two stores in Goa and one in the US).

Based in Pune, PNG has a rich brand legacy that dates back to 1832 and maintains a presence in numerous cities (21) across Maharashtra. The company, during the last few years, has been focusing more on enhancing unit economics, increasing its mix of make-to-order offerings, and improving its product mix. However, following a consistent shift toward the formalised market, the company is now aiming to expand its store network, starting in Maharashtra before venturing into other States such as Madhya Pradesh, Chhattisgarh, Bihar, et al.

The company is anticipated to deliver 23/31/36 per cent revenue/EBITDA/PAT CAGR during FY24-27 fueled by: a robust 30 per cent store CAGR; a favourable market presence in Maharashtra, characterised by a strong trend toward formalisation and a high proportion of studded jewellery; and an improving product mix, enhanced sourcing strategies, and debt reduction, which are likely to expand the PBT margin to 4.6 per cent in FY27 from 3.4 per cent in FY24.

We initiate coverage on the stock with a Buy rating and a TP of ₹950).