Sky Gold MD Expects Ebitda Margin To Cross 5% In Next Four Quarters, PAT To Rise
Addition of two new clients and the company's gold loan foray were among factors that Mangesh Chauhan said will lead to improvement of Ebitda margin and PAT.
Sky Gold's Managing Director Mangesh Chauhan believes that the company is well-poised to achieve a 5.75% Ebitda margin in the next three to four quarters, as a well-designed plan for future growth is in the works.
Chauhan told NDTV Profit that both Ebitda margin and PAT (profit after tax) levels will rise in the next three to four quarters.
“We are expecting to grow by 0.5% to 1% of our Ebitda margin in the coming 3–4 quarters and at PAT level also we will improve as we are going to gold metal loans slowly, which will reduce our interest or borrowing cost,” he said.
In the quarter ended Sept. 2024, the jewellery manufacturer had posted an Ebitda margin of 5% compared to 3.9% in last year's similar period.
The company’s Ebitda jumped 154% year-on-year to Rs 38.8 crore in Q2 against Rs 15.3 crore a year ago.
Net profit skyrocketed 405% to Rs 36.7 crore in the quarter under review as compared to Rs 7.3 crore in the year-ago period. The company’s profit margin rose 300 basis points YoY at 4.8%.
On the company’s strategy to increase its Ebitda and PAT levels in the upcoming quarters, Chauhan revealed, “For that, we have introduced rose gold and white gold jewellery of 18 carats where market share is going up. Nowadays, we have 12% market share of our 18 carat and 88% is 22 carat. We introduced studded jewellery last year in the March quarter.”
The top executive added,"Now, we are accelerating with the fundraise amounts in both segments, which will bring up margins. We are expecting the Ebitda margin to be 5.5–5.75%.”
Chauhan pointed out that the company has onboarded two new clients—Caratlane, a subsidiary of Tata Group’s Tanishq, and PN Gadgil Jewellers. And, the addition of the two new customers, he feels, will result in the rise of the company’s revenue and profit margin.
“We have added two prime customers, Caratlane which is a 100% subsidiary of Tanishq and PN Gadgil we have added as well, this will add to our revenue and profit margin,” Chauhan said.
On Monday, shares of Sky Gold Ltd. remained locked in at the 5% upper circuit limit of Rs 3,419.95 apiece on the NSE, while the benchmark Nifty 50 closed 0.34% lower at 23,453.8.
