P N Gadgil Jewellers

Investment Highlights

• Established regional presence: The company operates 48 stores covering 1,45,211 sq. ft. across 25 cities and is described as the second-largest organized jewellery player in Maharashtra.
• IPO proceeds: ~INR 393 Cr. is to be used to set up 12 new stores in Maharashtra during FY25 & FY26, while ~INR 300 Cr. is to be used to reduce short- and long-term debt.
• Product range: Its price spectrum ranges from INR 6,500 to INR 20,00,000, and the company is developing an in-house design team.

Key Risks

• Geographic concentration: Maharashtra contributed over 95% of revenue in FY24.
• Scaling beyond the core region: The report notes that several loss-making subsidiaries were closed, indicating difficulty scaling the business beyond Maharashtra.
• Working capital and gold prices: The business must display varied designs, and profitability is exposed to gold-price volatility; the report cites a stud ratio of <8%.

Standard disclosures

• Research Analyst has served as an officer, director or employee of subject company(ies): No
• We or our associates have received compensation from the subject company(ies) in the past 12 months: No
• We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
• We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months –No
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• Nature of financial interest in subject company, if any –Nil
• We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
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Regulatory disclosures

Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).

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Rating rationale

Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.

• Buy:> 15%
• Hold: -5% to 15%
• Reduce: -15% to -5%
• Sell: <-15%