Khazanchi Jewellers Limited

Consumer Cyclical — Luxury Goods · BSE

₹731.75+₹10.15 (+1.41%)

DalalBaazaar Score

66 / 100

🟢 Good

Verdict

NEUTRAL

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Khazanchi Jewellers Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Khazanchi Jewellers Limited engages in the wholesale and retail of jewelry products in India.

IndustryLuxury Goods

SectorConsumer Cyclical

Employees86

Annual revenue₹2,049 Cr

How does it make money?

Turns over ₹2,049 Cr a year. Of every ₹100 of sales, about ₹4 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 86 employees supports ₹23.83 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin6.2%

Net margin4.4%

Revenue / employee₹23.83 Cr

Who are its competitors?

The closest listed comparisons in its industry are TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 39.4%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 32.5% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE39.4%

ROE32.5%

Peer median ROE25.9%

What has been driving growth?

Growth has come mainly from selling more, rather than from keeping more of each sale. Over 3 years revenue moved +326% while net margin moved +177% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+326%

Margin effect+177%

DalalBaazaar Score

66/ 100

Good

Weighted across six categories. Every point is explained below.

✓ Beta of -0.15 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

70/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

71/ 100

Cheap

What you are being asked to pay, ignoring how good the business is.

A good business currently available at an undemanding price — the combination this framework is built to look for.

Historical Valuation

Current P/E

17.8x

3Y Median

50.9x

40 monthly readings · mean 59.8x · range 19.8x–150.4x

Sector Median

69.2x

median of 4 sector peers

🟢Current valuation is approximately 65% below its 3y median of 50.9x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 74% below the peer median of 69.2x.

vs. its own history

Cheap

50.9x median over 40 months · -65%

vs. sector peers

Cheap

69.2x median of 4 peers · -74%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

17.8x

P/B

5.67x

EV/EBITDA

15.1x

PEG

0.14

Dividend Yield

0.07%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 3.4% to 6.2% over 3 years.
Return on equity is rising
ROE has improved from 21.0% to 28.0%.
Return on capital is rising
ROCE has improved from 18.9% to 39.4%.
High return on capital employed
ROCE of 39.4% is the mark of a business that converts capital into profit efficiently.
Valuation below its historical average
At 17.8x the stock trades 65% below its own median of 50.9x.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 30% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 998% against revenue growth of 326% — customers are taking longer to pay.

Red Flags

4 items require attention · 3 high · 1 watch

🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 998% against revenue up 326% — sales are being booked faster than they are collected.
🟡Debt is increasingFinancial
Total debt is up 30% over 3 years.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 39.4% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 3.4% to 6.2%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 65% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 74% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 998% against revenue up 326%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
3 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 47% a year✓ 62.1% CAGR
Latest reported year was -18.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 4%✓ 6.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹42 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.9x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 36%✓ 39.4%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

7 / 11 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✗ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

5 good · 3 neutral · 3 weak

Market Cap

₹1,811 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

17.8x

Fair

Fairly valued against the generic band

P/B Ratio

5.67x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹41.14

Profitable

Profitable on a per-share basis

ROE

32.5%

Strong

Strong capital efficiency

ROCE

39.4%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.35x

Low

Conservative leverage

Revenue Growth (YoY)

-18.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

103.9%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.07%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

-₹63 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹731.75

ROA

20.2%

Good

Assets are working hard

Operating Margin

7.1%

Average

Average margins

Net Margin

4.4%

Average

Average bottom-line conversion

Current Ratio

3.03

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

-0.15

Defensive

Steadier than the market

52W Range Position

61%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

717.8 / 749.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

54.0

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹481 Cr	₹821 Cr	₹1,772 Cr	₹2,049 Cr	+62.1%
EBITDA	₹16 Cr	₹42 Cr	₹65 Cr	₹127 Cr	+97.5%
EBITDA Margin	3.4%	5.1%	3.7%	6.2%	—
PAT (Net Profit)	₹8 Cr	₹27 Cr	₹45 Cr	₹89 Cr	+127.8%
EPS	₹3.06	₹11.04	₹18.18	₹36.1	+127.7%
ROE	21.0%	14.6%	19.4%	28.0%	—
ROCE	18.9%	21.4%	27.2%	39.4%	—
Total Debt	₹85 Cr	₹55 Cr	₹65 Cr	₹110 Cr	+9.3%
Free Cash Flow	₹5 Cr	-₹86 Cr	-₹3 Cr	-₹42 Cr	—

🟢 Revenue has grown at 62.1% a year over 3 years.

🟢 EBITDA has grown at 97.5% a year over 3 years.

🟢 EBITDA Margin has risen from 3.4% to 6.2% over 3 years (+2.8 pts).

🟢 PAT (Net Profit) has grown at 127.8% a year over 3 years.

🟢 EPS has grown at 127.7% a year over 3 years.

🟢 ROE has risen from 21.0% to 28.0% over 3 years (+7.0 pts).

🟢 ROCE has risen from 18.9% to 39.4% over 3 years (+20.6 pts).

🔴 Total Debt has grown at 9.3% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹5 Cr to -₹42 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹466 Cr

Total Liabilities

₹146 Cr

Total Debt

₹110 Cr

Cash & Equivalents

₹4 Cr

Operating Cash Flow

-₹36 Cr

Capex

-₹6 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

78.3%

Corporate Actions

Dividend Rate

₹0.5

Ex-Dividend Date

03 Aug 2026

Peer Comparison

Company	P/E	ROE
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

2 positive1 mixed3 general

Compare with

Equitymaster, 15 Oct

Khazanchi Jewellers holds investor meet, shares no UPSI

scanx.trade, 29 Jun

Khazanchi Jewellers Q1 Net Profit Rises To 278M Rupees As Revenue Reaches 5.86B

Sahi, 13 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Compare with

Equitymaster, 16 Oct

Khazanchi Jewellers Q3 Results FY26 Preview: PAT to rise 14.16%

Univest, 13 FebResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Khazanchi Jewellers standalone net profit rises 83.70% in the June 2026 quarter

Business Standard, 13 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Watch Items

Revenue growth is negative (-18.3%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate12.4/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong14.9/20

🟢ProfitabilityStrong10.6/15

🟡ValuationFair9.1/15

🔴RiskHigh4/10

Attractive on both counts

A good business currently available at an undemanding price — the combination this framework exists to look for. The work left is qualitative: whether the advantage the numbers imply is one you can identify and expect to last. 3 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 47% a year62.1% CAGR
✓EBITDA margin holds above 4%6.2%
✗Free cash flow remains positive-₹42 Cr
✓Debt / EBITDA stays below 2x0.9x
✓ROCE stays above 36%39.4%