Brokerage house Motilal Oswal Financial Services (MOFSL) reiterated its BUY rating on PN Gadgil Jewellers (PNG), projecting a 40% upside from current levels with a target price (TP) of INR 825, valuing the stock at 30x its estimated FY27 earnings.
As per the report, Motilal Oswal sees a strong retail growth trajectory, robust profitability outlook, and a well-structured expansion strategy that could unlock long-term value across multiple geographies. This comes despite a sluggish demand environment in Q1 FY26, triggered by a sharp 30-35% YoY rise in gold prices, which breached the INR 100,000 mark per 10 grams in retail markets in June 2025.
Retail Rollout and Revenue Outlook
PN Gadgil Jewellers, which went public recently, is ramping up its retail expansion efforts, targeting the addition of 22–25 stores in FY26. The rollout will include both company-owned (COCO) and franchise-operated (FOCO) outlets, along with an aggressive push of its LiteStyle format, a boutique-style store model aimed at younger, design-conscious consumers.
In FY25, the company opened 16 COCO stores that contributed approximately INR 550 crore in revenue within just four months. These same stores are expected to generate INR 1,500 –1,600 crore in FY26. The new set of 13 COCO stores planned for FY26 is projected to add INR 500 – 700 crore in incremental revenue. Retail revenues overall are forecasted to grow by over 35% in FY26, while franchisee and e-commerce channels are projected to expand by ~45% and ~35%, respectively.
PN Gadgil LiteStyle: Targeting the New-Age Consumer
The LiteStyle model, a cornerstone of PNG’s retail evolution, is tailored for the millennial and Gen Z demographic. These outlets, ranging from 1,500–2,000 sq. ft., focus on lightweight, trend-forward jewelry in 14K and 18K gold, promoting design-led impulse purchases under the tagline: “Though it’s light, it’s serious fashion.”
In FY26, PNG aims to open 12–13 LiteStyle stores, backed by internal accruals with a modest capex of INR 8 –9 crore per outlet. The company launched its first two LiteStyle stores in Pune in Q1 FY26 and expects each outlet to reach breakeven within 12–15 months, supported by higher gross margins of 15–16%.
Expansion Beyond Maharashtra
While PN Gadgil holds dominant brand equity in Maharashtra, the jeweller is now widening its geographical footprint. New store launches are planned in Lucknow, Kanpur, and Indore in 1HFY26, followed by entries into Patna and Muzaffarpur in Bihar in 2HFY26. A flagship 5,000 sq. ft. store in Dadar, Mumbai, is also expected to open soon, marking a significant milestone post-IPO.
From 36 stores in FY24, PN Gadgil expanded to 53 stores by FY25 and is expected to scale this up to 93 by FY27, translating to a store addition CAGR of >30%.
Financial Highlights and Projections
Despite near-term softness in jewelry demand, PNG’s fundamentals remain strong. The company has repaid INR 300 crore in debt using IPO proceeds, strengthening its balance sheet. It also fully hedged its Gold Metal Loan (GML) obligations by March 2025, with GML rates now down to ~4%, improving cost-efficiency.
Financial Estimates (INR Cr unless specified otherwise):
| Metric | FY 2025 | FY 2026E | FY 2027E |
| Sales | 7,693.5 | 9,307.0 | 11,505.3 |
| EBITDA | 353.8 | 476.3 | 602.2 |
| PAT | 218.3 | 289.9 | 372.7 |
| EPS (INR) | 17.4 | 21.4 | 27.5 |
| RoE (%) | 22.6 | 17.1 | 18.4 |
| P/E (x) | 34.8 | 28.3 | 22.0 |
| EV/EBITDA (x) | 22.0 | 15.9 | 12.3 |
From FY25 to FY27, Motilal Oswal estimates a CAGR of 22% in revenue and 30% in EBITDA. EBITDA margins are expected to expand from 4.6% in FY25 to 5.2% in FY27, driven by better product mix, operating leverage, and cost optimization.
The shareholding pattern as of March 2025 shows a robust promoter holding at 83.1%, with DIIs at 5.5% and FIIs at 0.7%, indicating potential institutional interest as the business scales.
Near-Term Challenges: Gold Price Volatility
The sharp spike in gold prices during Q1 FY26 negatively impacted consumer sentiment, particularly in June 2025. With fewer festivals compared to the same period last year (only Akshaya Tritiya this time), discretionary purchases declined, and buyers postponed purchases. However, segments like polki and studded jewelry remained resilient, buoyed by stable diamond pricing.
Demand is expected to revive from Q2 FY26, with upcoming festive triggers such as Raksha Bandhan and Ganesh Chaturthi.
Valuation & Investment View
Motilal Oswal concludes that PN Gadgil’s calibrated expansion, margin tailwinds, and digital-led retail push provide a solid investment case. With consistent breakeven across new stores, growing studded jewelry contribution (from 4% in FY21 to 8% in FY25), and LiteStyle’s early traction, the company is poised for scalable and profitable growth.
BUY is the call, with a 12-month TP of INR 825, reflecting a 40.44% potential upside from the current market price of INR 587.40 as of 11 July 2025. For more details related to IPO GMP, SEBI IPO Approval, and Live Subscription, stay tuned to IPO Central.