Deepa Jewellers reported a strong Q2 FY27 with revenue reaching Rs 626 crore, up 25% YoY, and a 37% jump in PAT. The company is betting on a massive 45% revenue CAGR through FY29, supported by a new Hyderabad manufacturing facility and a strategic shift toward high-margin studded jewellery. While margins faced temporary pressure from startup costs and product mix, management's decision to forgo salaries and clear growth targets highlights long-term expansion plans.
Deepa Jewellers Q2 Profit Surges 37% Amid Strategic Expansion
Revenue reached Rs 626 crore in Q2, while PAT stood at Rs 37 crore for the quarter.
Reader Takeaway: Strong revenue momentum and ambitious growth targets contrast with short-term margin pressure from product mix shifts.
What just happened
Deepa Jewellers delivered a robust financial performance for Q2 and H1 FY27. For the first half of the year, the company clocked a 30% increase in revenue to Rs 1,057 crore and a 32% rise in PAT to Rs 64 crore. Operationally, the company successfully commissioned a 6,700 sq ft manufacturing facility in Hyderabad in September 2026, aimed at scaling in-house production.
Why this matters
Management has issued aggressive guidance, projecting a 40-45% revenue CAGR for FY27 through FY29. To achieve this, the company is doubling down on high-margin studded jewellery, aiming for a 75% sales mix within the next year. Furthermore, the promoters have demonstrated significant conviction by drawing no salary since October 1, 2026, signaling alignment with shareholder interests during this capital-intensive expansion phase.
Operational Performance
Total operating volume for H1 hit 1,327 kgs, a 12% rise. Notably, job work volumes spiked 51% YoY. The Hyderabad facility is central to the firm's strategy to move production in-house, targeting a 65% in-house and 35% outsourced mix. Future growth is also tethered to geographic expansion, with new offices planned for Chennai in December 2026 and Bangalore by April-May 2027.
Risks to watch
Margin volatility remains the primary concern. Q2 EBITDA margins were pressured at 7.24% due to a shift toward plain gold jewellery and initial depreciation/employee costs from the new facility. Investors should closely monitor whether the company can successfully pivot its product mix toward studded jewellery and realize the projected 80-120 bps margin expansion over the next 4-6 quarters.
What to track next
- The successful integration of the Hyderabad manufacturing plant.
- The execution of sales office openings in Chennai and Bangalore.
- Progress on shifting the sales mix toward the 75% studded jewellery target.