Sky Gold and Diamonds (NSE:SKYGOLD) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to SKYGOLD AND DIAMONDS LIMITED Q1 FY twenty seven Earnings Conference. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to miss from MUFG InTime. Thank you and over to you, ma'am. Thank you, Sumit. On behalf of MUFG InTime, I welcome you all to SKYGOLD AND DIAMONDS LIMITED Q one FY twenty seven earnings conference call. From the management side, we have mister Mangesh Chohan, managing director, and mister Siddharth Sapani, chief financial officer.

0:51 I hope everyone had an opportunity to go through our investor deck that we have uploaded on Exchange and the company's website. I would like to mention a short disclaimer before we begin the call. This call may contain some of the forward looking statements, which are completely based upon our belief, opinion, expectations as of today. These statements are not a guarantee of our future performance and involve unforeseen risks and uncertainties. With this, now I hand over the call to mister Mangesh Chuan. Over to you, sir. Thank you so much. Good afternoon, everyone. On behalf of SKYGOLD AND DIAMONDS LIMITED, I extend a warm welcome to all the participants to the q one FY twenty seven financial results earning calls. Along with me is Sudar Shivani, our CFO.

1:37 We have uploaded our investor deck and earning press release on the stock exchanges and the company website. I hope everybody had an opportunity to go through them. Before I begin, I am delighted to share an important development in our leadership journey. We are pleased to welcome mister Akash Kalvesha as the CEO of SKYGOLD AND DIAMONDS LIMITED. Mister Akash brings over two decades of his his appearance across the jewelry industry with deep expertise spanning jewelry sales, merchandising, business development, and market expansion. Over the course of his career, he has successfully led growth initiatives, strengthen market presence, and build high performing teams across both domestic and international markets.

2:31 At SKYGOLD, we have always believed that capability is built not through promises, but through consistent delivery. Over the last several years, we have established a track record of setting clear goals and executing against them and returning to our stakeholders with results and results that validate our commitments. When we first outlined our growth road map, it reflected our confidence in the long term potential of the business and the opportunities we saw ahead. Over the subsequent quarters, our team has consistently delivered on key milestones, reinforcing our confidence in both our strategy and execution capabilities.

3:20 One of the strongest validation of our execution capabilities has been has been our ability to consistently increase our long term targets while remaining on course to achieve them. Our current FY twenty seven revenue target of INR 6,100 crore is meaningfully higher than the outlook we had communicate... Communicated nine months ago. This upward revision reflects the expansion of our capabilities, deeper customer relationships, and the significant opportunities we continue to see across the market. Our business today stands at the interaction inter... Intersection of three powerful capabilities, lightweight jewelry manufacturing, advanced production technology, merchandising excellence.

4:10 Over the last few years, we have made substantial investment in building differentiated capabilities across three d printing, laser cutting, stamping, and lightweight plastic jewelry jewelry manufacturing. At the same time, we have significantly strengthened our design and merchandising infrastructure by doubling the size of our team and establishing dedicated product development and diamond design studios. Many... More importantly, we increasingly see ourselves as a design led company rather than just a b to b only manufacturer. Our focus, Efan, extends beyond manufacturing excellence to create compelling market relevant jewelry concept that help our retail partners differentiate differentiate themselves in an increasingly competitive environment.

5:04 Our combining advanced manufacturing capability with strong design, merchandising, and our product development expertise, we are able to deliver innovative collections that drive faster selling through in... Improve inventory productivity and clear value for both our customer and end consumers. This evolution has fundamentally transformed the way we engage our customers. Unlike traditional manufacturing partners who primarily offer standard cut... Catalogs, SKYGOLD increasingly works alongside the retailers as a product development partner. We study the product mix, understand their competitive environment, analyze consumer preference, create teams, develop prototypes, and collaborate closely until products are finally finally...

5:55 Finalize our launch... For launch. Ultimately, our success is measured not simply by the number of design we showcase, but by the number of designs selected by our customer and more importantly, how quickly those products sell through to through to consumers. This collaborative model has generated significant benefits for our retail partners. It has helped reduce unsold inventory, improve inventory productivity, and strengthen consumer confidence, leading to increase our share of high value added business. Also, what what makes me proud of our team is not merely about ability to achieve revenue targets, but the quality of the growth we have delivered. You will you will recall that our the...

6:41 Our last few quarters have consistently emphasized our focus on building a stronger and more efficient business rather than pursuing growth at any cost. I am pleased to share that we have achieved 70 per... 70% sales on advanced model, significantly ahead of our expectation of 15% of advanced model for FY twenty seven. In addition, majority of our new orders are being booked today, carry considerably shorter shorter receivable cycle, reflecting... Improving our quality of our customer mix and order book. As a result, we are closing this quarter approximately sixty days of our net working capital cycle. At at that time, many questions whether there is a working capital below sixty days was achievable.

7:28 Today, we are demonstrating that it is not only achievable, but also sustainable sustainable disciplined execution and strong operational. But the natural diamonds currently contribute approximately 2% of our overall business, presenting significant headroom for future growth. The company aims to increase this contribution over the coming years while simultaneously expanding its presence in the rapidly growing lab grown diamond segment, backed by strong round term demand trends and continued focus on both natural and lab grown diamond is expected to strengthen the company's position in the diamond jewelry market and drive successive sustainable revenue growth and margins. The increased share of natural and lab grown diamond strategy is expected to enhance the premium product mix, thereby supporting higher gross margin.

8:24 In parallel, the company is reinforcing its advanced board business as a strategic growth growth pillar, leveraging its asset light and capital efficient operating model. The approach is expected to improve returns on capital employed and by enabling scalable profitability and long term business growth. The continued expansion of our premium product portfolio coupled with our capital efficient growth strategy reinforces our confidence in delivering sustainable and profitable growth with strong tailwind across natural diamonds, labral diamonds, and advanced gold. We remain firmly on track to achieve our aspiration of INR for 8100 gold by 05/27 and 18,000 to 19,000 code by FY twenty.

9:13 Returning to profitability. Over the past few quarters, I have spoken of factors driving our gross margin improvement. At that time, I had also emphasized that our profitability is not dependent on movements in gold prices because we follow strict back to back hedging policy. In recent quarters, heightened volatility and gross prices has created margin pressures across various retailers and manufacturers within the jewelry industry. Despite these challenges, SKYGOLD has successfully maintained its margin profile, demonstrating the end of our operating model. This performance validates our disciplined approach to risk management.

9:59 We are not into the business of speculating on gold prices, nor we depend on gold price appreciation to drive profitability. Instead, our focus remains on factors that are within our control and enhancing profitable efficiency, expanding our portfolio of value added products, driving product innovation, strengthening manufacturing excellence, and delivering great value to our customers. The consistency of our margin during period of significant commodity price volatility reinforces our confidence in the sustainability of our business model and the effect... Effectiveness of the system and processes we have built over the years. Another important commitment we need to invest in investor was the future growth would be funded predominantly through internal generated cash flows.

10:51 At the time we have guided q four FY twenty six, we would be close to cash flow neutral That we have expected to begin generating cash flow operating... Positive cash flow operating close towards last quarter of FY twenty seven. I'm pleased to report that the billing quarter, the company has generated approximately INR 30 crore of operating cash flow, making an important milestone in our journey towards building a stronger and more self sufficient business model. I would also like to reiterate a commitment. He said a commitment that I have previously made to an investor. If the sales process were not made... Completed within the simulated time frame work, the promoter then would send... Would purchase this property.

11:38 That committed... Remains fully intact. A notable highlight highlight during the quarter was the continued strength of our internal business... Internet... Sorry, international business, reflecting the success of our efforts to diversify revenue streams and expand our global team... Footprint. As a part of this strategic focus, we participate in the Asia Asia... Asiana UK India Jewelry Expo in London. We were focused on... We... Where we focused our diversified product portfolio to the broad base of international buyers. The response was highly encouraging, resulting in strong initial interest and helping us to build a prospective order pipeline of approximately 30 to $45 across The UK and European market.

12:25 While this opportunity are currently at different stages of conversion, they provide meaningful validation of our product offerings, manufacturing capability, growing acceptance in international geographies. The momentum business in our export business reinforces our confidence in the long term potential of international market as a key growth driver for the company. Building on this early traction, we remain focused on trending strategic partnerships, enhancing market penetration, and expanding our distribution channel across 30 regions. These initiatives supporting our differentiated product portfolio and operational capabilities are expected to further accelerate our export growth and diversify our revenue mix.

13:15 We believe that our international expansion strategy will progressively become a significant contributor to sustainable growth and value creation over the coming years. Equally important is our continued commitment to the highest standard of corporate governance and strong alignment with shareholder interest. Beginning with financial year, the company's financial statements are being audited by MSK associate LLP, which is video in India. Being one of the largest global accounting firms, this this represents significant milestone in our ongoing journey to further strengthen governance, transparency, and financial oversight across the organization. The appointment underscore our commitment to adopting global best practices in financial reporting, compliance and risk management, and corporate governance.

14:10 As we continue to scale the business, we remain focused on building a robust international framework that enhance account... Accountability, strengthen stakeholder countries, and support sustainable long term value creation. As promoters, we are also taking a significant step to further strengthen the alignment between management and stake stake... Seller's interest. Beginning FY '27, we will adopt a zero salary promoter compensation model. Going forward, promoter remuneration will be linked entirely to dividends, and dividends will be declared only from operating cash flow generated business. This reflects a simple philosophy. Promoter rewards should grow only when shareholder value is created.

14:57 At the same time, we remain committed to prudent capital allocation of our priority. As I said, we remain committed to our prudent capital allocation. Our first priority will always be debt reduction and balance sheet strengthening. Dividend distribution will follow only after this objective has been appropriately addressed. Now as we look ahead, I would like to briefly discuss our long term strategic roadmap, which we refer to as vision 2030 or five point three point o. The vision... This vision is not about aggressively changing large numbers. Rather, it is about building a business, and that is fundamentally stronger and more disciplined. By 2030, our experience is complete. That is net debt free.

15:43 Operations with a highly efficient balance sheet, maintenance industry leading working capital metrics, and consistently converts a significant portion of the learning into sustainable operating cash flows. Further, we would like to implement world class ERP platform and digital system across both front end and back end operations. This initiative will strengthen operation controls, improve visibility, enhance scalability, and support the next phase of complete growth journey. Moving to the financial of q one FY twenty seven, I will ask our CFO, mister Sudhak Devaney, to run down through the financials for the quarter. Over to Sudhak. Thank you., hi. I would like to begin by highlighting that '27 has been a very strong quarter for SKYGOLD, with healthy growth across both our top line and profitability.

16:49 Importantly, this growth has been accomplished by a meaningful improvement in margins, driven by the continued shift towards advanced gold and the highest contribution from value added products. Before discussing the detailed financial performance, I would like to highlight three key takeaways for the quarter. First, our consolidated revenue for q one FY twenty seven stood at 2,013 crores, registering a strong 78% year on year growth. On an annualized basis, this translates into a revenue run rate of approximately 8,050 crore, which is already very close to our FY twenty seven revenue guidance of 8,100 crore.

17:37 Second, we are seeing a clear improvement in the quality of our revenue and profitability. Our consolidated gross margin increased to 9.3% in Q1 FY twenty seven versus 9.1 in q four FY twenty fifth... 56, an improvement of 27 basis points. This improvement has been made primarily driven on account of two major factors. First, share of non 22 kt jewelry has increased from 10 and a half percent to 14% in q one FY twenty seven due to structural shift in customer trends towards lower KT jewelry.

18:27 Share of studied jewelry has also increased from 1.65% in Q4 'twenty six to 2.1% in Q1 'twenty seven on account of management's focus of on better margin products. This gross margin expansion is translating strongly into the bottom line. EBITDA increased 2.57 crores to 7.8% for the quarter. Operating path for the quarter crossed 100 crore mark for the first time. We are getting a lot of q and a on the gross margins. So I would like to spend some time giving up the breakup of our 9.3% gross margin. First, the advanced gold contributes to close to 9,200 bps in revenue and gross margin since the advanced gold revenue flows into the gross profit.

19:32 Secondly, non k t... Non 22 k t products. Lower k t products like 18 k t, 14 KT, nine KT has been gained gaining market share due to gold price appreciation. They now contribute close to 14% of of volume and has gross margin contribution of close to 1.4 to one and a half percent. Third, studied jewelry. Natural and lab grown studied jewelry is currently at 2% of revenues, and it contributes to close to point 3% in gross margins. Finally, if we look at 22 k t gross margins, it comes to close to six, six and a half percent.

20:22 Even here, we have 70% of our products being CV study jewelry. While the the balance close to 30% is the plain gold jewelry products having a a gross margin of five, five and a half percent. Due to above, we are confident that the margin improvement seen in Q1 is not a one off, but a reflection of the underlying transformation in our business mix. At the same time, we are seeing a meaningful improvement in our cash flow generation. Our cash flow from operations turned positive at close to INR 30 crores in Q1 FY 'twenty seven compared to negative operating cash flow till end of 'twenty six.

21:15 This improvement is particularly encouraging given the strong growth in our business during the quarter As the contribution from advanced growth continues to increase, we expect working capital intensity of our business to moderate further, supporting stronger operating cash flow generation. Together with the significant improvement in profitability, this gives us greater confidence in our ability to progressively reduce debt and interest cost. Our objective of moving towards a net debt free balance sheet remains firmly on track, which should provide an additional structural tailwind to our past margins going forward. Importantly, we remain focused on ensuring that our growth is supported by disciplined working capital management, continued deleveraging and a higher contribution from advanced gold and value added products.

22:14 With our Q1 performance already putting us close to our FY twenty seven revenue guidance on an annualized basis, we remain confident in our ability to deliver sustainable growth while continuing to improve the quality and profitability of our business. Now I request the moderator to open the floor for q and a. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the interest of 10. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use ten minutes while asking a question. Ladies and gentlemen, we will wait for a moment while the question is assembled.

23:02 The first question is from the line of Deep Shah from Equities Securities. Please go ahead. Hi, sir. Congratulations on good set of numbers, and really good to see the positive operating cash flows. So great work. Thank you, sir. So just couple of things from my side. So suppose that on the guidance side, we have been guiding 8,100 of of top line this year along with some 10 and a half percent of EBITDA margin. But when I see the first quarter run rate, I I think we... I really see SKYGOLD surpassing that number. So don't you think there's a significant upside risk and... Don't you think it's prudent, it's it's good to, say, revise the guidance any color on this, sir? So we will... We we... We'll evaluate our target after Diwali. We'll analyze one more quarter, and we will give a new guidance for Diwali.

23:53 That's our plan. Okay. Okay. Secondly, sir, I just wanted to check-in when three days have increased compared to the fourth quarter. Anything over here? Anything... Any any specific reason over here? So on the working capital days, this was fifty nine days as of March is at sixty days as of June, per se. So from a overall strategy side, we are focusing on increased advanced gold, plus the export business has also increased if you look if you look at from a quarter on quarter perspective. So in the previous quarter, the export was close to 14 and a half percent, which now is at close to 18% more.

24:43 Plus, our focus is now on on focusing on the highest margin products, which is mainly on the on the side. So the cash flow relation with the business is having, we are deploying some part of it into the study business as well, which has a higher margin. So so that our margins and profitability could improve on a long term basis. Further, as as we have told in the SKYGOLD three point o vision that we are trying to balance all three, sales growth, profitability growth, as well as positive operational cash flow, and we are working with this this in our mind.

25:40 I need to add that when we update our revenue guidance only if we get a greater share of credit and. Okay. So I'll get on the more... On the working capital side. I just wanted to check on the inventory because when I see that on a sequential basis, inventory days have gone up. Is it the... It for the festive season? I just wanted to check any any specific reason over here or not. So so basically, as I informed that we are saying that we are going from a negative cash flow, operating cash flow zone to a positive cash flow zone. Further, our free cash flow even after we exclude the CapEx, that is also at a plus. So so we are utilizing the funds which the gold business is generating into the started business. So since the started business has a higher margin and a better ROC, but it needs a a slightly higher working capital as well.

26:47 So the current strategy is to put some... The funds generated from the gold business into the started business and have a better overall margin per se. Okay. Got it. So one last thing from my side, if you can just highlight the volume performance for this quarter and also the CapEx plan for the for the years to come. Because last quarter, I think that we are sitting with some 5055% sort of a utilization. What will be the CapEx plan? What will be the CapEx outlay for the for the coming years? So as you have informed in our speech that we continue to be on the asset light model. Currently, the capacity utilization is close to 55, 57 odd percent.

27:37 And so we have current... Looking at the current production number, we are good till 2028. And Okay. For that, we are we are... We may look at a a new facility, but that we will continue on the lease model per se, and CapEx will not be very big. It will be close to 8,200 CR. It will be just 20 to 25% of the fact that we will generate at that point of time. Since we have we have already built the world class facility and we have already invested in the capacity and infrastructure, so we we we are... So so the... Now the the major focus is that how to balance all three levers for us in in the SKYGOLD 3.2 version.

28:34 So then as we are at 60% utilization right now, and we have a a room of 40%. Okay. Got it, sir. Done. Thank you so much, and all the best for the future quarters. Thank you. Ladies and gentlemen, to ensure that every participant gets an opportunity, please restrict your questions to two per participant. The next question is from the line of GOLDISH GOLDAND from. Please go ahead. Yeah. Thank you for the opportunity, sir, and congratulations for a very good set of results. First question is on... Sir, is there any reason for rising table debt, and is it sustainable going forward? Table debt. Since... Yeah. So from the last quarter onwards, we have started to give the breakup of the working capital table.

29:24 So... But from our overall business, what you're asking is right. From our overall business, we look at the the total working capital, which has been deployed in the business. But since lot of a lot of analysts and investors look at our business from a net working capital base, That's why we have given the breakup of the the working capital cycle as well as the net working capital days that we have for the respective period. So... But, sir, will it be sustainable going forward, the payable date that that is rising? Yeah. Since we are looking at increasing our higher margin product, So in gold, credit available is virtually new.

30:16 While in the diamond segment and all, we are getting or it is a market practice to get the credit. And that's why the number that you are seeing on the credit register is a sustainable number. But overall, in terms of the working capital days, we are at close to sixty days. And in terms of strategy, we are looking at reducing or improving on the working capital days by two days year on year per se with the overall target to reach to fifty two days by 2030 in the SKYGOLD vision 2030 that we are looking at. Okay, sir. Okay. Thank you for that. Is that what is the potential for UK... From UK market? And, I mean, how big can it be for us?

31:05 So we are just entered into the market. We are running for the division, and we have got a first initial order of 25 to 30 k g. So UK is about total studied and more of margin based business. So we are looking forward, and we have got good response in the division for our production. We are achieving good sales as well as we have guided that we'll go to 20% exports in coming years. So we are in... But I said we want to diversify the export. Right now, we are... Actually, the 6% is coming from UAE, 2% from Singapore, 2% from Malaysia. So we are expecting three to 4% sales come from Europe market, and we have started order... Already started going... Getting the order. Let's see how it is convertible, and what... It's more about salad and mix of golden salad.

31:52 Yeah. Perfect. Perfect. And one thing that that I would just like to highlight or just put across or explain it to you that even one day improvement in our operating cycle needs to close to $92.95 crore of impact in the operating cash flow cycle. So that is why our vision and our approach is balancing both balancing growth, the working capital days, as well as being in the positive zone in the operating cash flow cycle. Okay, sir. Thank you for that. Thank thank you so much. Just last question, what is the gross the gross debt level by... After the end of quarter?

32:44 Gross debt level for this quarter is 540 crores. Okay, sir. Thank you. Thank you so much. That's it from my side, and all the best for the upcoming quarter. Thank you so much. Thank you. The next question is from the line of from. Please go ahead. Thank you, sir, for the opportunity, and congratulation on the great numbers. So just a couple of questions from my side. One is, like, quarter one typically benefits from and also varying season. So how much of this quarter's strength is seasonal with the with the structural step up in demand? And what should we expect for the seasonally softer q two? Second is with the appointment of mister Akash as CEO, what specific priorities have you set for him where he will be focusing on and drive over the next twelve to eighteen months?

33:40 Right. So, again, you can see in q one, the activity is... There's a major season of the jewelry industry, but half a portion goes in March month also. The delivery in every month also, the activity delivery is going in March and April also. So you can see from q one q two is better because, Nava, actually, the only orders are in q two, and q three is better than that because tomorrow season fall is q three. So we follow by q one is better... Q two is better than q one, then q three is better. And, again, the fourth quarter of March is better than that because, obviously, this major delivery goes in March and, essentially, the part... Approximately twenty twenty two, fifteen minutes. So that's again, call... Question on across the list of the new target to develop the market and one good business much from the full last quarter we have onboarded.

34:34 We have a few eight... 18% advanced good business, and we we are joining the target of this year to be average of 15%, next year 20%, and third year of 2525%. In 2013, we will achieve 30 of advanced good business, which we have given him the target. Then again, we have given the... Him the target of Europe market to extend with lab grown diamond and Europe is more about lab grown and study of natural diamond jewelry. So we have now tell him to focus on diversity of our export business and to to give a target of three to 5% from UK market. So, again, advance more business is a priority given to him and explain more about the date of climate and large one diamond duty. Understood. Thank you so much, sir, and all the best for future purpose. Thank you.

35:25 Thank you. The next question is from the line of from. Please go ahead. Yes. Thank you for the opportunity, and congratulations, sir, for the solid set of numbers and signing numbers, actually, the four driven and the cash flow. To start with the first question, I just would like to understand about, as you said, there would be a remaining nine months, although there would be a targeted of almost more than 8,100 crores would be the guidance that's already about to surpass, like, 25 percent of those guidance you achieved earlier. So if possible, can you give me the guidance or at least give us the guidance for FY twenty eight if possible? So because this q one has given a very promising year almost, like, the estimates more that earlier expected around 5,000 close to 8100.

36:19 So is it possible if you can give a brief guidance of FY '28, if possible? So, basically, in the SKYGOLD 3.2 vision, our strategy is to balance all three, the sales, the profitability, and the positive OCF. Considering these and my ROC is close to 35, 36%, we have we have... We expect that it will close... Go to 30 to 35% in terms of the the sales increase. And we will continue to to monitor our sales performance. And post September, we plan to give an estimate that what we would expect it by '27 and by '28 further.

37:15 But our plan is that overall, we are now targeting to have a operating cash flow to back conversion of close to 20% that we have also we have also provided in the... In our IP as well. And our overall PAT margin will be close to 5% approximate first. Okay. Okay, sir. Got it. So... Okay. And, sir, about... As you said, Q1 growth is the volume rate, not the both sides that both sides are not in with this as we are already doing the vision. So can you share a tiny moment growth if possible for the separately to identify and understand about the...

38:10 So specifically about the Yeah. I can understand your question. But previously, SKYGOLD was predominantly a 22 k t company. But now with the with the market trend and the customer preference and gold prices going up, the 18 k t, 14 k t, nine k t started and all has is also increasing. That's why in the last quarter of February twenty six March, we have a... That we have indicated that the volume guidance that we used to give will not be the right number to be provided. But overall, I I can say that we have grown by seven to 9% in the volumes in this quarter.

39:01 Okay. Okay. Got it. So very soon, and then we can expect there will be a tenant and the volume can be decided into the numbers and the units for the first... Specifically with every caret that we can get the segregations if possible. Sure. We will update, and we will try to. Okay, sir. So then the last question, it is about the current utilization rate for q one at 05/27. Can you also give us the realization what is the order that you consider for q one? If if the... Since the volume number is is is not being provided, so I think from a further resultant realization number will also not be available. Okay.

39:55 Okay. So with data, current utilization rate for q one, which must be around any or or guidance for the q two, if you can care about because the capacity utilization is expansion. Okay. You are saying, okay. From the capacity utilization utilization. Ah, okay. Okay. Sorry. I I understand something. That's okay. So the current capacity utilization is close to 60 odd percent per se, and we expect that the capacity utilization should improve by seven to 8% q one q per se every time. As the volume will increase, that's why the the overall capacity utilization will also also increase. So when we do that in our capacity to produce, and we are at 60% of last utilization in this quarter... In the last quarter.

40:46 Okay. Okay, sir. Okay. Thank you so much, sir, and all the best for the upcoming quarter. Thank you so much. Thank you so much, ma'am. Thank you. The next question is from the line of from Capital. Please go ahead. Hi. Thank you for the opportunity and congrats for a very good set of numbers. Sir, I think when we spoke about, you know, FY thirty reason, the revenue guidance was kept given the volatility in gold prices, the volume guidance and... Sorry. Revenue guidance was kept as a as a moving part because it it... Underlying underlying gold prices also determine how how the value will pan out over the course of the period. Right? So our focus largely was on delivering on the volume while while keeping a of improving profitability, given by the mix and what what about the efficiency you you guys are working on. Right? Project we are working on. So we like to understand 60% is what you mentioned, the utilization level. If you can split that between your stand alone and the consolidated, how how was the volume performance has been for the quarter, that would be, I think, the right judgment for b two b player like yours, given that the volatility of gold prices is not in our hands, and we don't play around gold price. Right?

42:15 Yeah. Perfect. And then a couple of points into it. First is, I have what we have been indicating that in this SKYGOLD three point o version, we are balancing all three of them, the sales growth, the profitability growth, as well as having achieving the net debt free position by 2030. So considering that, we are balancing this and we again stand at this point of time with the numbers that you have given for 2030. But since our ROC is more than 30%, so you you can you can you can can that the overall sales growth will be at least closer to to that number. Because if we try and do a higher sales growth, again, the operating cash flow will go into the negative zone.

43:09 This we have worked very very hard and we have come to the level of the operating cash flow per se. So the... So in terms of the revenue projection number, the 18,000 to 19,000 crore is what we are targeting. We are targeting how how sooner can we reach the target of thousand crore of pack. Because this is the first time we have reached thousand... 100 crore of pack in three months. This is the the first time. But our estimate goal or target is to cross thousand crore impact. And and this is to go in marketing and having the vision of operating cash flow and becoming the net debt free company by 2030, we are executing this entire strategy.

44:03 Okay. Because why... If it... Because I I believe our stand alone unit was operating at a higher utilization. Right? Versus the subsidiaries, Sparkling, SKYGOLD DENNA? They're operating at sub 50% utilization. So is there any change or the... Should we assume both were operating at 60% level or there is there is a marked improvement in stand alone utilization while subsidiary also has seen an improvement this quarter? So broadly, the stand alone utilization is close to... So across, it is closer to to 55 to 65% is the overall utilization.

44:52 Somewhere it can be 55, somewhere it can be 62, 63. But at a but at a blended rate, we are close to 60 odd percent of your price. Okay. And second question was on on the on the disclosure which you have rightly given to exchanges in the in the month of July, July 16, that that incident will will have any p and l impact in in in our q two number, given that we have disclosed the amount? Yeah. So so out of that... Since 10.7 crore was the total amount involved, but such incidents have unfortunately become increasingly prevalent across many organizations which are listed on the BSE and and NFC and including CB has come up with the circular warning the companies to take a note of this issue which has happened.

45:54 We have acted promptly. We have initiated the legal proceedings, and they've also got available order as well. And close to 3.5 crore has already came back to our bank account per se. And for, you know, balance also, the the work is... The efforts are underway to maximize the money that has gone out that how how that how maximum we can get the same. While this is the update, while we... I would also like to just inform that as of the matter is currently under legal and investigative process, we will not comment specifically on the No. On this matter first. No. Correct. Yeah. Got it. And last question was on the g...

46:46 Advanced loan. I think four q, we closed at 20%, and this quarter is at 17%. Right? That is correct? Okay. Yeah. It is reduction sequentially? No. No. So it's not a reduction. Overall, in terms of volumes, it is the same. But since my Okay. Overall volumes has been as a percentage, you are seeing a downward trend. Okay. Got it. Got it. I'll jump the thing. Thank you for answering. Again, to close this, expanding the facility is not an issue for us. We are not a factory which has long lead times. So our key competitive advantage is design. So so we are main focus on design, and we can... Anytime we make a facility in ninety to one twenty days with... You get a rental fee period after 2020 as we need.

47:33 Right. And continuing on that design aspect, I had one question on the, you know, merchandising. Given the prices of gold is so... Is rising, you know, the entry level pricing of your products, typically, we started over... Our US is in entry level entry level jewelry. Right? Given the lightweight and and and designs we have. Do we feel the goal... Because of the increased gold prices, it it becomes a little difficult thing in terms of of meeting that entry level price points or or the lowering of damage or lowering of the caratage is the only way to to to meet that entry level price point.

48:22 So, again, we have a large largest three d printer in our facility, and we have the expertise from last twenty years to lead the market. And what are the changes in the market? What... How good prices are changing? How should be the inventory rate? And what should be the entry point on the customer? So we have the merchandising designer team keep on inventing new new products, keep on lighting of the inventory, bringing up the new new products to... For all the sectors, all the different customers. So you can see we are uploading our customer feedback on our YouTube channel also about our live inventory managing the ticket size of the customer, managing the flow of the design, look of the design. It's not about managing the ticket size. It's about this look should be the same, please. Flow should be the same. The... I just see our feedback is larger of our largest. Mean, the market is our largest customer in Dubai. A moment in...

49:11 It does have to put the feedback. So it's about teamwork, and we... That's our expertise coming. We have a design led company and managing the inventory ticket size about the flow, design, characters. We keep on working on that and come up with the proper design and the and the and the ticket size and the character of the sales. So everything is available on the YouTube channel. Also, you can see our customer feedback how we are come up with the designs and as for the goal that has gone up, we have coped up with the design and come up with them with sales in this gold price also. Got it. Got it. Thank you. Thank you for answering the question. We'll join it. Thank you. The next question is from the line of from IIFL Capital Asset Management Limited. Please go ahead. Nothing. Yeah. I think congratulation on good quarter from work.

49:59 Sir, I have two questions. First one is on the margin. But if I look at the fact market, that was somewhere around 5.2% in the first quarter, and the long term vision that we have shared is around 5.25. Right? But the initiative that we have found about audio, we think we can advance more business, increasing the digital business as well as moving towards net debt for the debt. Sir, all these initiatives are indicating towards increasing margin. Right? So, sir, what is the rapid product to adding for this 5.25% How should we look at it? So then you are right that evolve will will increase our gross margins also. And, again, the expected mix will also increase. And it's about... Blendedly, we have, you know, the mix of a range of eight to 9% of gross margin, guidance of 8.5% to 9% gross margin we are doing. Because in the journey of business, in... You can see if 22 ks, somebody is taking volume, you have to pass on some point to 5.5 discount also to the customers whenever they are taking a huge volume.

51:02 So it will get diluted between just high margin products, diamond and lab roll. And again, that's why we are guiding our guidance of 8.5 to 9%. Again, we are focusing on diamond to expand to ten percent and one goal. 100% will improve on the margin, but our guidance remains the same from between 8.5 to 9%. I mean,. Yeah. Perfect. For the... Just to take a step back, this entire guidance was... The projection was prepared somewhere in the end of twenty twenty five. And we... Since we are projecting five years forward, So that is is is why we have tried to put in a number which we see is we are confident of achieving it.

51:50 Apart from giving the guidance to the street, we continuously work and endeavor on how to improve our margins, and that's why the the positive fund flow which is happening from our gold business, we are trying to deploy it in a smart way into the target business, which has a better margin process. So, yes, from the overall guidance to the speed, 5.5% of the past margin is still hold while we we plan and aim that how can we reach the magical number of thousand crore of that going forward and the and the and the... And that's why whatever steps we are taking it, we are proactively telling to the investors as well so that you can understand the implication of the same in your respective financial model.

52:48 Got it, sir. Just to conclude this point, we guided on the paper side and then our probability of that being improved. Is that correct? You can take on... You can take it on that model. Okay. And the second question is on the CapEx side. You mentioned that we are good enough. So our capacity is good enough by effectively, and around 8,202 of CapEx will be required. Right? So, sir, what is the lead time for the capacity to come back specifically? And second, I think you mentioned earlier that that will be around 15 to 20% of the. So just more clarity on that on this one. Sir, so it will take one twenty days of... Lastly, we made this upgrade in ninety days, so we have the amount. And it will take one twenty days to develop the factory to go to 1.10 to 2.410, and 100%, it will take 8,200 crore of CapEx. So when we we will be at a path, I think, 64 to 100. 64, whatever the number is done. And it's approximately approximately 10... 15% or 40% of the path. So we've made it in after 2028, and it's a hundred days to make. So approximately twenty five to hundred crore of CapEx of machinery, additional machine, then 25 which have been... So there will be no use CapEx because we are not going for making our own constructive factory. We are in a supply model. We'll go in a model.

54:11 And, normally, we we will get twenty days of rental fee cleared from the parties for those who go... Given that. And it will be approximately 10... 12 to 15% of the path of FY twenty eight eight, March. Perfect. Perfect. Thank you so much, and let's let's make sure for the future. Thank you. Thank you. The next question is from the line of from Credit Capital PMS. Please go ahead. Yeah. Team, congratulations on the robust q one. So first question is on the client edition. We have, you know, added a few clients in last fifteen to eighteen months to the likes of PNRGOLD and. So how is the ramp up happening with those certain new clients that we have added?

54:59 And second is, you know, how many new clients that are in pipeline whom we have not served in past? So that is my question one. So let's so let's just step back into this. Basically, we have onboarded Akash, who is currently designated as CEO. So he was onboarded at a fixed salary plus a model. And the target that was given to him was to onboard all the large customers that were not in our client list. And he has successfully done it and that too at a much faster pace than we have actually anticipated anticipated that he would have done it in close to twenty four to thirty six months, which he has done in fifteen to eighteen months per se. So now...

55:47 And our forte is the gold jewelry. So now with all of these customers being onboarded and our gold jewelry being sent to them on a regular basis, now we are trying to cross sell and upsell both, and that is the current strategy that we are working on. Because I would say that we are few countries few companies in the world who service to its top 15 large customers of its sector. So in terms of customer acquisition, we are broadly there. The strategy is now how how we can increase the wallet share with them, how we can do the cross selling, and how we can do the upselling.

56:32 That is... That that that is to the standard business. That's the current study that we are working. So when you can see to the addition, we were into mass GOLD brands like,, GRT,,,,, we... Two years back, the brand was slowly slowly moving. And now from last two years, we are seeing seeing us traffic sales in this brand. So Ziva,, and many youngsters have come this in this exhibition also coming up with nine karat store online b two c sales, national diamond channel stores. Somebody has opened the national diamond channel store. So we are seeing the... You... Good sales from coming three years from this brand stores also, which we were not counting it two years back.

57:32 Again, your question, we are increasing the volatility we have... Yeah. We have good increase of volatility also in Terexin also. So so we are... I mean, still not added. We have onboarded all the customer, and we are expecting to come up with the new Ziggy brands that's coming in with start up funds and all. Let's see. And we we are onboarding them also. Yeah. Great. Thank you for that. Yeah. I have one more question. Are you witnessing any further shift from, you know, organize to organize given the, you know, the gold volatility that we have seen in recent past that might be potentially benefiting you? So any thoughts on that? Yeah. So from the unorganized to organized, that is... That under current team is playing out in the sector in a big way.

58:18 Currently, only 40% of the sector is organized and 60% sector is unorganized on the b two c side. While on the b two c b side, only 20% is organized and 80% is unorganized. So that it gives a very big runway for any b two b design led manufacturer to progress further, and we are in the sweet spot of that growth at this point of time, which we expect that it should continue at least for next four five years going forward as well. So, as per exposure, we are expecting by 2030, 75% market will be organized and 25% will be unorganized. Oh, okay. And this 19,000 crores of revenue target by FY thirty, does this include any potential acquisition?

59:12 So I think we have done with the product equation and the client equation. So I think we are on a sweet spot and having all the... We have we have to just utilize our facilities, which is we are we are full facilities to utilize, and we are focusing on the product. So as of now, there is no such... Anything on the table for the question. Yeah. And the last question, since the advanced gold share is rising and, you know, under this model, we'll be booking the the making charges in the revenue, and thus the full gold sales won't be into the, you know, into the sales, into the revenue. So due to this continuing shift, is that one of the reason why you are not upgrading the revenue target?

59:57 So, again, we have not added that and one full business revenue in that 18,000 quarter mark. If you calculate, if we are at thirty percent and one for business, it will be 27,000 for business, but that non sales and growth cannot be counted in the business because it does not come in the revenue. So excluding advance of business, we have given a guidance of 18,000 for on the... That we make on the sales more message. If you Yeah. Just one thing to add. I have just explained on this feature here that the advanced gold model has an infinite ROC. The revenue percolate down till the gross margin level. And since it has a significant infinite ROC, it adds to our overall objective of cash flow positive, and it also helps in in our path.

1:00:46 That is is why we are focusing on it. The overall in terms of the the absolute number, it is very less. It is less than 1% of the sales in terms of the absolute number purchase. So it will not be so significant in the overall scheme of things per se, the... Especially in terms of the projection that we have given for 2030. Understood. Thank you so much. Thank you. Ladies and gentlemen, due to time constraint, that was the last question. I would now like to hand the conference over to the management for closing comments. Thank you so much. Before I conclude, I would like to like to sincerely thank everyone for joining us today and taking time to participate in our q one FY twenty twenty one earnings calls. I would like to thank all our investors, customers, employees, business partners, and stakeholders for their continued trust and support. We have listened carefully to the feedback we have received from the investment community over the last several quarters.

1:01:53 Many of the improvements you see today across operations, working capital management, governance, profitability, and cash flow generation have been influenced by that constructive feedback. We value this engagement immensely. While we are quite proud of the progress we have made, we recognize that our journey is far from complete. We remain open to suggestions and commit... Committed to continuous improvement as we build SKYGOLD into one of the India's most admired jewelry manufacturing companies. Thank you for your continued convenience in SKYGOLD AND DIAMONDS LIMITED. We look forward to create sustainable value for all stakeholders in the years ahead. Thank you. Thank you so much. Thank you. On behalf of SKYGOLD AND DIAMONDS LIMITED, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.