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India Ratings & Research upgrades ratings of P N Gadgil Jewellers to 'A+' with 'stable' outlook

07-Mar-26 16:32 Hrs IST

The agency has affirmed the company's short-term rating at 'IND A1'.

India Ratings & Research said that the upgrade reflects PNGJ Group's strong retail revenue growth through healthy same store sales growth (SSSG) and ramping-up of operations at its newly opened stores along with EBITDA expansion, translating into improved credit metrics in FY25 and 1HFY26.

The rating also reflects the group's improved financial flexibility post an initial public offering (IPO) by PNGJ in FY25.

Furthermore, India Ratings expects the group's scale as well as profitability to continue to improve over the medium term, on the back of a strong brand recall and customer acceptance in Maharashtra, and prudent expansion in the non-core markets.

The ratings also reflect Ind-Ra's expectation of a sustenance of PNGJ Group's credit metrics in the medium term, owing to the stabilisation of operations of the newly opened stores while benefitting from the established brand and experience of the promoters in the jewellery retail business in western India with a strong legacy of over 190 years.

The ratings, however, are constrained by the regional concentration, although the company has been diversifying its presence and has opened stores in central (Madhya Pradesh) and northern India (Uttar Pradesh) in FY26.

India Ratings believes that penetrating into non-core markets meaningfully in the targeted breakeven period will be critical for store economies and profitability at the group level. In addition, the high regulatory oversight, gold price fluctuations and intense competition expose the company to margin pressures.

The agency further notes that company has capex plans over FY26-FY28 to expand the number of stores to 80 stores by FY26 and 100 by FY27. With the exhaustion of IPO proceeds, the agency believes that a judicious funding mix for capex and growth working capital and scaling up through the franchisee model will be critical for maintaining the overall credit perspective.

P. N. Gadgil Jewellers is an Indian jewellery company. As of September 2025, it had 63 retail stores including one outlet in the US (47 owned and 16 franchise stores in India).

The scrip had advanced 2.46% to end at Rs 540.80 on the BSE today.

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