Gold Standard: The Lalithaa Jewellery Mart IPO

_{The following article is for educational purposes ONLY. Each and every piece of information used henceforth in this article is sourced from the RHP.}

Lalithaa Jewellery Mart is going for an IPO after a stalled roadshow since last year. The company makes and sells premium gold, silver and diamond jewellery in South India, and accrued a revenue of ~₹410 Cr per store last year.

The import duties on gold are very volatile. In May 2026, the government raised import duty on gold back to 15%, raising the overall tax burden on gold to about 18.4%.

The average price of ten grams of gold rose from ~₹60K in FY24 to ₹1.15 lakh in FY26, a rise of 91% in two years.

Lalithaa Jewellery Mart Limited sells gold, silver and diamond jewellery under the “Lalithaa” brand from 61 stores across Tamil Nadu, Andhra Pradesh, Telangana, Karnataka and Puducherry. It opened its first store in Chennai in 1985.

They’re now raising ~₹1,700 Cr through an IPO consisting of a Fresh Issue of ~₹1,200 Cr and an Offer for Sale of ~₹500 Cr.

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Lalithaa sells authenticated BIS-hallmarked gold/silver, and diamond jewellery through 61 stores in five south Indian states and is designed to cater to regional preferences of the southern Indian jewellery markets.

Gold jewellery makes up ~92% of revenue, while silverware makes up ~7%, and diamond jewellery the remainder. The company targets the mass and value conscious buyer rather than the premium end of the market.

A customer buying a gold item is paying for three things:

• the weight of gold at the prevailing rate,

• making charge for the labour that shaped it, and

• wastage charge to cover gold lost in the shaping.

Lalithaa Jewellery Mart buys gold on invoice from suppliers and carries the price risk on its own book, relying on fast inventory turnover to limit the damage. This is fine when gold prices hold steady. It magnifies both gains and also losses when prices move quickly, as they did through FY26.

Lalithaa manufactures in-house. It runs two facilities in Tamil Nadu, at Thirumudivakkam and Maraimalai, staffed by 1000+ total Karigars. These Karigars made ~79% of Lalithaa’s products in FY26.

Lalithaa also runs two savings schemes, Dhana Vandhanam and Free-yo-Flexi, that let customers pay in monthly installments.

• Revenue per store rose from ₹317 Cr in FY24 to ₹410 Cr in FY26, even though the company added only eight stores in that period. Most of the increase tracks gold price appreciation, not a wider store base or higher footfall.

• The cost of materials, stock purchases and inventory movement consumed between 90% and 92% of revenue per store across the three years. This is normal for a business whose main input is a costly, price volatile metal.

• Adjusted EBITDA per store more than doubled, from ₹13 Cr in FY24 to ₹27 Cr in FY26.

• Adjusted EBITDA more than doubled in FY26, rising from ₹740 Cr in FY24 to ₹1,674 Cr in FY26. The FY26 jump came from a wider EBITDA margin, 7% against 4% in FY25.

• Finance Costs grew by 46% from ₹136 Cr in FY24 to ₹198 Cr in FY26.

• Profit After Tax grew at a CAGR of 68% between FY24 and FY26, from ₹360 Cr to ₹1,010 Cr. Most of the profit gains came from Margin expansion as costs grew slower than revenue growth.

• Revenue per store being on the rise on a broader scale is one of the most important indicators of a strong business, and this rose from ₹317 Cr in FY24 to ₹410 Cr in FY26. In fact, Lalithaa boasts the highest operating revenue per store among key jewellery players in India.

• Advances from Customers include those advances collected via monthly jewellery schemes. Such schemes provide interest-free funding, which secures a recurring customer base and drives store loyalty. These grew from ₹1,943 Cr in FY24 to ₹5,043 in FY26.

• Tamil Nadu alone made up 54% of FY26 revenue, more than the other four states combine., Andhra Pradesh, Karnataka and Telangana add another chunk combined, and Puducherry has just a single store, accounting for the smallest percent share.

• Lalithaa’s revenue of ₹25,024 Cr is the third largest behind Titan’s jewellery division and Kalyan Jewellers, and more than double than PN Gadgil Jewellers, the next largest peer.

• Lalithaa’s EBITDA Margin of 7% sits in the middle of the group, below PC Jeweller’s 20% and Senco Gold’s 11%, but ahead of PN Gadgil’s 6%.

• Lalithaa’s PAT Margin of 4% is at the bottom of the group with Kalyan Jewellers, Thangamayil and PN Gadgiland much behind PC Jeweller’s 21% and Senco Gold’s 7%.

• Lalithaa’s D/E Ratio of 0.53x times is the second lowest in the group, behind only PC Jeweller at 0.22x.

Gold price risk without a hedge: The average price of gold rose from ₹6062 per gram in FY24 to ₹11,600 in FY26, ~91% in two years. Most Indian jewellers manage this swing using gold metal loans, forward contracts or options. Lalithaa uses none of these. It buys gold on invoice and carries the price risk itself, relying on fast inventory turnover to limit the damage.

Geographic concentration: Tamil Nadu alone accounted for 54% of FY26 revenue, and Lalithaa majorly deals in South India. A geographic downturn, whether from weather, local politics, or a shift in regional gold-buying habits, will hit Lalithaa harder than a jeweller with a national footprint like its peers.

Lalithaa Jewellery Mart sells jewellery to the price-conscious South Indian, and offers a range of savings schemes to bring in cash ahead of the sale. Its revenue has compounded at ~22% a year, and its profit at 68%. Set against that, all of its stores sit in one region, and none of its gold price risk is hedged.

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_{This content is based on publicly available information contained in the Red Herring Prospectus (RHP) and is intended solely for educational and informational purposes. It should not be construed as investment advice, recommendation or solicitation to invest.}

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_{Source: Red Herring Prospectus (RHP) of Lalithaa Jewellery Mart Limited}