Release Date: April 21, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- International Gemmological Institute (India) Ltd (BOM:544311, Financial) reported a 15% growth in revenues and a 29% growth in EBITDA compared to the previous quarter.
- The company achieved a 27% increase in reported volumes across its business segments, including natural diamonds, lab-grown diamonds, jewelry, and colored stones.
- The company has recruited over 130 gemologists to support volume growth, representing around 14% of its overall employee strength.
- The company is embarking on a digital transformation initiative to enhance service quality and reduce turnaround times.
- International Gemmological Institute (India) Ltd (BOM:544311) maintains a strong market position, being the largest independent accreditation and certification service provider in India with over 50% market share.
Negative Points
- The company had to take a one-time price correction in its lab-grown diamond certification services due to a drop in wholesale prices.
- There is potential disruption from global trade policy changes, including recent tariff impositions by the United States.
- The company faces challenges in maintaining profitability as the mix of jewelry certification, which has lower realizations, increases.
- The company is experiencing pressure to ramp up infrastructure and personnel to meet growing demand, which could impact operational costs.
- There is uncertainty regarding the impact of tariffs and trade policies on the company's international operations, particularly in the US and China.
Q & A Highlights
Q: Could you provide guidance on revenue growth and EBITDA margin for CY 2025 for both consolidated and standalone businesses?
A: Ishwar Rayer, CFO, stated that the company expects to grow between 15% and 20% in revenue for the consolidated level this financial year. The performance in India, which represents over 75% of the group's revenues, is expected to mirror the consolidated group performance. EBITDA margins are expected to improve from last year's 57%, potentially reaching between 57% and 64% for the full year.
Q: With the mix of jewelry certification increasing, does it have any implications on profitability?
A: Ishwar Rayer, CFO, explained that despite the increase in jewelry certification, driven by lab-grown jewelry, margins have remained strong. The company sees significant potential in the lab-grown jewelry segment, which is expected to drive accelerated growth in the future.
Q: Can you provide insights into the impact of tariffs and any potential disruptions in the near term?
A: Tamas Printer, MD and CEO, mentioned that while tariffs are a global disruptor, the company has not seen any immediate impact on numbers. With 50% of certifications for domestic consumption and China contributing 10% to revenues, the tariff impact is expected to be minimal. The company is prepared to adapt to any changes.
Q: How do certification prices and realizations for lab-grown diamonds (LGD) look over the past three quarters?
A: Tamas Printer, MD and CEO, noted that certification prices have stabilized, and the size of certified diamonds has increased, leading to better realizations. The company offers different certification formats, but pricing is linked to the size and weight of the diamond rather than the format.
Q: What is driving the growth in the Netherlands business, and how does it compare to Belgium?
A: Ishwar Rayer, CFO, highlighted that significant traction in China and Dubai is driving growth in the Netherlands business. The strategic interventions in key geographies are showing positive trends, and the company expects sustainable margins in the range of 15-20% for international operations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
