Whalesbook
BlueStone Jewellery reported strong fourth-quarter results for FY26, with standalone revenue jumping 49.1% year-on-year to INR 681.5 crore. For the full fiscal year, the company's revenue reached INR 2,441 crore. Same-store sales growth (SSG) remained robust at 34% in the fourth quarter, driven by broad consumer demand.
The company concluded March 2026 with 340 stores across 134 Indian cities. Management highlighted the effective use of vertical integration to manage pricing amid sharp gold price increases. This gold price volatility, however, previously led to a tactical slowdown in store additions and impacted inventory valuation.
BlueStone is also launching exclusive stores for men's and kids' jewellery to broaden market reach. Crucially, management plans to phase out the franchisee model by FY27-FY28. This move aims to improve capital structure and operational oversight by focusing on company-owned stores and larger formats.
These strategic adjustments are key for navigating industry cycles and bolstering long-term profitability. The pivot towards company-owned stores and larger formats signals a focus on enhanced operational control and efficiency, crucial for reinforcing market standing.
Historically, BlueStone expanded its retail presence by adding 65 stores in FY26, reaching 340. This pace, however, fell short of earlier projections of adding over 290 new stores in FY26-FY27, largely due to volatile gold prices influencing expansion decisions. The company has traditionally emphasized an omnichannel approach, blending digital discovery with physical retail, and focused on design-led, non-wedding jewelry.
Looking ahead, BlueStone aims for an annual store footprint increase of about 20%, prioritizing company-owned outlets. Mature stores, aged 3-4 years, are expected to generate INR 14 to 15 crore in revenue at peak capacity, suggesting enhanced store productivity, and are anticipated to achieve inventory turns between 1.7x to 1.9x. The company plans to keep advertising and promotion (A&P) spend around 6% of revenue, while increasing absolute spending for brand building. A move towards larger store formats, roughly 2,000 sq ft, is underway to reduce relocation costs tied to smaller outlets.
Key risks persist, with gold price volatility remaining a primary concern. Inventory turnover compressed to 1.13x in FY26, a notable decline attributed to the revaluation of closing inventory following gold price spikes. The product mix has shifted, with studded jewellery sales falling to 55% as consumers favored plain gold items during high gold price periods, potentially affecting gross margins.
In peer comparison, market leader Titan Company reported robust Q4 FY26 growth of 46% year-on-year, with its jewelry division reaching 3,603 locations. Kalyan Jewellers India Ltd posted a significant 64% year-on-year revenue jump in Q4 FY26, driven by strong domestic growth and approximately 45% SSG across its 507 showrooms. BlueStone's 49.1% revenue growth places it strongly against some peers, though its store expansion faced greater constraints from gold price volatility than some competitors.
Investors will be watching the execution of the franchise model phase-out and the transition to company-owned stores. Key factors to monitor include the pace of store expansion against the targeted 20% annual increase, the impact of gold price movements, revenue realization from mature stores, efficiency gains from larger formats, and signs of normalization in inventory turns and the studded jewellery segment's performance.