International Gemmological Institute India Ltd (IGIL) Q2FY27 Concall Transcript - Sep-2026 Qtr
Moderator (MUFG Entime): Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY '27 Earnings Conference Call of International Gemmological Institute India Ltd, hosted by MUFG Entime. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after
Moderator (MUFG Entime): has concluded. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sumit Khaitan from MUFG Intime. Thank you, and over to you, sir.
Sumit Khaitan (MUFG Intime): Yeah. Good evening, everyone. I welcome you all to the earnings conference call to discuss Q2 and H1 FY '27 results of International Gemmological Institute Limited. To discuss the result, we have from the management Mr. Tehmasp Printer, MD and CEO, Mr. Ishwar Iyer, CFO, and Ms. Natasha Kedia, Head of Investor Relations and Public Relations. They will take you through the results and the business performance, which will be proceed for Q&A session. Before we proceed with the call, I would like to mention that some of the statements made in the today's call may be forward-looking in nature and may involve risk and uncertainties. For more details, kindly refer to investor presentation and other filings that can be found on the company's website. With this, I now hand over the call to the management for their opening remarks. Over to you, sir.
Ishwar Iyer (International Gemmological Institute India Ltd): Tehmasp, you can start.
Moderator (MUFG Entime): Sir, kindly unmute your line and go ahead, please.
Moderator (MUFG Entime): We lost the connection from Mr. Printer, just give us a moment while we have them online.
Moderator (MUFG Entime): We have Mr. Printer again with us on the line. Sir, please proceed.
Tehmasp Printer (International Gemmological Institute India Ltd): Yeah. Good evening ladies and gentlemen and thank you for joining the IGI's quarter two, half yearly FY 27 earnings call. I trust that you had the opportunity to review our results and present investor presentations, both of which are available on the stock exchanges as well as on our website. I will cover the two things today. First is the quarter, what we have been seeing in the market, and in lab grown diamonds in particular. Ishwar will take you through the numbers in detail later on. This has been the best quarter in IGI's history. Our volumes, our revenue, our EBITDA, and our profits were all the highest we have ever reported. We issued 4.35 million reports in the quarter. That is 26% more than the same quarter last year. In India, the volumes grew 19% on a year-on-year basis. Revenue from operations grew 31% to INR 3,980 million. For the first half of the year, revenue grew 27%, EBITDA grew 34%, and profit after tax grew 37%. The great the growth has come from all parts of the business. Lab-grown grew the fastest. Natural diamonds also grew, even though the natural market did not. Colored stone growth has been led by AGL. And again, Ishwar will give you the segment numbers later on. Let me start by saying a few words about the market. In India, the festive season has started. Diwali is on the 8th of November this year. Last year, it was on the 20th October. And so some of the festive stocking that happened in September last year is happening in October this year. Even so, demand through the quarter was healthy and the trade has stocked up well for the season. The initial trends in October driven by the festive demand are also seeing good traction. Gold prices have been high and volatile. The buyers of the natural diamond jewelry are taking a little longer to decide as a results of as such the results of natural dia- jewelry certification grew only 3% in this quarter. Lab-grown is not seeing this hesitation at all. At our Investor Day in August, we spoke about lab-grown diamonds under three heads: supply, retail, and buyer. Let me take you through each one briefly so that we can see what we saw in this quarter. On supply, large Indian growers are adding reactors and are prob- and are doubling their capacity in three years. Supply is at its base and not at its peak. In the quarter, lab-grown loose certification grew 37% signaling a robust supply ramp up. On retail, certification demand is created at the retail end. The certificate costs less than 2% to 3% of the retail price, and it is the very reason why consumers buy with confidence. In India, lab-grown chains are opening up stores and established jewelers have also launched their own lab-grown brand. In the United States, more than 50% of all bridals are now lab-growns and other markets are likely to follow this trend. Our lab-grown jewelry certification grew 47% in this quarter as retailers stock up for the season. On the buyers, for many families, lab-grown diamond is the very first diamond that they buy. With increase in household income, they buy more pieces, bigger stones, and over many years, over the coming years, they will move to natural diamonds. We certify natural diamonds, we certify lab-grown diamonds, colored
Tehmasp Printer (International Gemmological Institute India Ltd): and to the same standards. It is the IGI certificate that makes the lab grown diamond a diamond and it is the same certificate that also protects the value of a natural diamond. Furthermore, last month in Bombay, the Union Home Minister, Shri Amit Shah, asked the industry to keep the entire lab grown diamond chain in Indian hands, from machines to the showrooms. He said the lab grown market could grow many times over its current size. We welcome this. IGI was the first international laboratory to certify lab grown diamonds way back in 2002 2005. A market of this size needs an independent standard that the whole world will accept. That is what IGI provides, and that is the role that we intend to keep. Our priorities continue to be focused on one, accelerate the natural diamond growth and gain market share. The aim is to grow faster than the market and gain market share. In a market that did not grow, our natural loose certification grew 8% where our share is the highest in the industry. Second point, continued leadership in lab grown diamonds. I have covered the numbers. What matters now is the capacity ramp up and the service to the festive peak, for which we are well prepared. Scale up on gemstone acquisition through the integration of AGL. AGL has been part of the IGI group since January. We are building color stone capabilities in our other laboratories using AGL methods and we have started offering the services to our jewelry clients. The IGI colored gemstone strategy is being shaped in collaboration with AGL, with technical review of IGI process and reporting along with review and standardization of testing equipment. Excuse me. While we have seen some green shoots, we are working to build a continuous continued momentum in this space, including dedicated setups of large customers. AGL itself is ready for a growth charter and expansion into the key gemstone markets. The colors continuous investment on the brand. We are taking IGI from a name that the trade trusts and recognizes to the consumer who will ask for it. We initiated our B2B2C marketing initiatives in the first quarter through an IPL partnership. We have further expanded in those initiatives through targeted media campaigns consistency in each quarter across geographies, results of which are indicated below. The marketing ROI, we have created clear KPIs to call out. Brand research volume, IGI is up by 66% since March '26. Reach, we are reaching 20 million unique audience every quarter consistently, overall, 150 million plus views on our campaigns on a year-to-date basis. We have upped our ante on facilitating key joint campaigns to accelerate festive sales for retailers. For example, Puja campaign in West Bengal for natural diamond jewelry, V1 in the NCR with consortium of LG jewelers. We are building capabilities to create regional content and strategy both within India and across the key global geographies to build brand rest salience with the end customer. The fifth point is leveraging AI and machine learning for operating effectiveness. AI-based work allocations and schedules scheduling is now in the use of our labora laboratories. The same team is grading more stones more efficiently and faster. The grading standards itself always remains constant and do not change. Our network also keeps growing. We started operations in Italy this year. Saudi Arabia is being prepared. In September, we set up a company in Botswana. In our overseas laboratories certification revenues grew by 31% with that
Tehmasp Printer (International Gemmological Institute India Ltd): and the business is increasingly profitable. With that, I would now like to invite our CFO, Mr. Eswar Iyer, to take you through the financial performance for the quarter and the half year. Eswar, over to you.
Ishwar Iyer (International Gemmological Institute India Ltd): Thank you, Tehmasp, and thanks everyone for taking the time for joining today's conference call. I will start with an update for the quarter, followed by an update for the first half, and then we will also talk of some balance sheet matrices. I'm talking about the consolidated group performance for the quarter. The company has reported strong quarterly results: 4.35 million reports, which is a 26% growth year on year. Total revenues from operations at INR 3,980 million is up 31%. Certification revenue at 3,875 million, up 32%. EBITDA for this quarter clocked in at 2,445 million, growing 39%, with margins at 61.4%, which is 340 basis points above the same time last year. PAT at 1,858 million is up 43%. This was primarily driven by robust revenue growths across all our segments, namely, LGD, which grew 37%, LGD jewelry growing 47%, gemstones and other certification growing 331%. This quarter has also seen a strong performance from our subsidiaries. Revenue growth during this quarter clocked in at 49%. If we were to exclude the AGL consolidation, on a like-to-like basis, the subsidiary business for this quarter has grown 31%. The AGL acquisition enabled an incremental 3% revenue growth. I mentioned about certification revenue growing 32%. If you were to discount the AGL consolidation, our base business delivered 29% revenue growth for the quarter. The ARP for the quarter reported at 891 rupees, registering a 4% improvement versus the previous year. The AGL consolidation gave us 2 percentage points gains, and the base business ARP has grown 2% on a higher LGD loose stone mix. On a sequential quarter basis, realizations, the business has grown around 8% with EBITDA growing at around 9% for the sequential quarter. Employee, coming to the EBITDA performance at 2,445 million, reflecting a growth of 39% compared to the previous year. EBITDA margin for the quarter stood at 61.4%, an improvement of 340 basis points on a year-on-year basis. The AGL acquisition has contributed 2% of the incremental growth to the EBITDA. Consequently, PAT reported at 1,858 million, growing 43% to previous year. PAT margin stood at 46.7% for the quarter, which is up 400 basis points over the previous year. I will now cover the India stand-alone results for the quarter. In terms of revenue, certification revenue for the period stood at 3,040 million, growing 28%, supported by strong volume growth of 19%. This was primarily driven by strong revenue growth across our core segments, namely LGD growing 40%, LGD jewelry at 29%, gemstones and other certification grew 343%. Total revenue from operations for the quarter stood at 3,056 million, registering a growth of 27%. ARP for the quarter reported at INR 827 versus the previous year of 773, which is up 7%, driven by an increased mix of LGD stones, which is up 6%. EBITDA reported at 2,123 million, reflecting a growth of 21% compared to the previous year. EBITDA margins stood at 69.5% versus 72.8 in the previous year. It is down 340 basis points. Obviously, this has been driven by certain investments that we made from an employee leadership standpoint, plus additional marketing plus commission expenses, which we have talked about in the previous quarter as well. Consequently, PAT reported at 1,697 million, growing 22% compared to the previous year period. PAT margin stood at 55.5% for the quarter is versus 57.8% in the previous year. I am now covering the H1 results summary. As part of group performance, the first half has delivered an exceptional revenue growth of 27% from a revenue standpoint and an EBITDA growth of 34%.
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