About Khazanchi Jewellers
Khazanchi Jewellers Ltd. was founded in 1971 and incorporated in 1996 in Chennai, Tamil Nadu. It sells jewellery and bullion through retail, wholesale and bullion channels; its retail showroom is in Sowcarpet, Chennai, while its wholesale business serves 2,000+ clients. The company has a 5 Lakh + design library across gold, diamond and fusion jewellery, spanning 25+ product categories. It holds a BIS Hallmark certificate and is certified for bullion transactions on India International Bullion Exchange (IIBX).
Investment Rationale for Khazanchi Jewellers
- Retail expansion: The company plans a 10,000 sq.ft. flagship showroom in Sowcarpet, Chennai. It expects the store to contribute INR 550 Cr. annually, with retail operating margins potentially reaching ~11% to 13% compared with the current ~9% to 10%.
- New product lines: Vajraa Diamonds by Khazanchi is a premium natural diamond jewellery line. Management expects diamond jewellery sales to contribute 5% to 10% of total topline sales over 2-3 years; fine silver jewellery is another initiative.
- Established presence and experience: Minerva highlights the company’s 51+ years of experience, Tamil Nadu brand presence and craftsmanship. Promoter and Managing Director Mr. Tarachand Mehta has over five decades of experience in the jewellery industry.
- Wholesale customer base: The report notes 2,000 active B2B customers, pointing to acceptance of the company’s designs, fulfilment and customer service.
- Improving H1-FY26 margins: The report attributes the margin improvement to higher inventory efficiency and a greater contribution from premium categories. H1-FY26 EBITDA margin was 5.6% and PAT margin was 4.1%.
- Market and listing developments: The note cites expected Indian jewellery market growth of 16% CAGR from FY24 to FY28 and says the company will be eligible to migrate to the mainboard in Aug’26 after completing 3 years of listing.
Khazanchi Jewellers Key Financials
| Particulars | FY23 | FY24 | FY25 | H1-FY26 | FY26 (P) | FY27 (P) | FY28 (P) |
|---|---|---|---|---|---|---|---|
| Op. Revenues | 481 | 821 | 1,772 | 952 | 2,091 | 2,614 | 3,267 |
| Rev. Growth % | 87% | 71% | 116% | 26% | 18% | 25% | 25% |
| EBITDA | 16 | 41 | 64 | 53 | 98 | 141 | 185 |
| EBITDA % | 3.2% | 5.0% | 3.6% | 5.6% | 4.7% | 5.4% | 5.7% |
| PAT | 8 | 27 | 45 | 39 | 68 | 95 | 127 |
| PAT % | 1.6% | 3.3% | 2.5% | 4.1% | 3.3% | 3.6% | 3.9% |
FY26, FY27 and FY28 figures are marked (P) in the report.
The report projects revenues of 2,614 in FY27 and PAT of 95 in FY27. Its valuation table uses INR 95.1 Cr. as the FY27 base-case PAT.
Valuation and Target Price
Minerva values Khazanchi Jewellers at ~24.15x FY27 PAT, described as a ~15% discount to the industry PE of ~28.5x. The base case assumes FY27 PAT of INR 95.1 Cr. and gives a target price of INR 928, with stated upside of ~25% from the CMP of INR 742.50/-. The report does not state a Buy, Hold or Sell recommendation.
- INR 742.50/-
- CMP (05-Dec’25)
- INR 928
- Target price
- ~25%
- Stated upside
- INR 1,837 Cr.
- Market capitalisation
Key Risks
- Outsourced manufacturing: The company relies on outsourced manufacturing and its relationships with artisans to introduce new designs.
- Showroom execution: Topline growth and margin expansion depend on the new flagship store, which has experienced delays compared with timelines previously indicated by management.
- Working capital: The upcoming store will require inventory of INR 150 Cr. as indicated by management, making optimal working-capital utilisation important.
- Related-party transactions: Purchase and sales of goods to Pathik Sales Pvt. Ltd., a related party with common directors and relatives of Directors, represented ~48% of FY25 annual turnover.
- Industry demand and competition: Demand could decline amid rising gold prices, or larger players could adjust making charges amid high competitive intensity.
Business and Growth Initiatives
The company’s FY25 retail sales were INR 88.59 Cr., or 5% of total sales. The planned showroom’s puja was scheduled for 12-Dec’25, with a grand launch planned for mid-January’26 around the Pongal festival. The company expects total retail sales to account for ~20% to 25% of total sales after the expansion. The report also cites management’s expected diamond jewellery margins of 10% to 12% for B2B and 16% to 18% for retail.
Industry Context
The report expects the Indian jewellery market to grow by 16% CAGR from FY24 to FY28, supported by a rising share of organised jewellery retail. It notes that southern states contribute ~40% of the Indian gold jewellery market.
Our View
The report’s valuation case links earnings growth to the new showroom, improved margins and newer product categories, and sets a target of INR 928. Delivery depends on the flagship store and working-capital management, while related-party transactions are also a material stated risk. The note does not print a Buy, Hold or Sell rating.