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Shankesh Jewellers Limited has delivered a sharp improvement in revenue, profitability and return ratios over the last three financial years. Revenue from operations increased from ₹1,061.78 crore in FY2024 to ₹1,630.78 crore in FY2026, while net profit rose from ₹12.82 crore to ₹106.68 crore during the same period.
The company is now coming up with its IPO at a price band of ₹88 to ₹93 per share. While its profitability and return ratios compare favourably with some listed jewellery peers, investors need to look beyond the headline numbers. The decline in gold processing volumes, working capital intensity, limited operating cash flow, rising jobworker attrition and dependence on gold prices remain important factors for evaluating the sustainability of Shankesh Jewellers' profitability.
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Shankesh Jewellers Profitability: FY24, FY25, and FY26
Shankesh Jewellers has reported significant improvement in its financial performance over the last three fiscal years. The following figures are based on the company's restated consolidated financial information.
The numbers indicate that Shankesh Jewellers' profitability has expanded considerably faster than its revenue. Revenue increased at a CAGR of approximately 23.93% between FY2024 and FY2026. At the same time, EBITDA increased from ₹28.60 crore to ₹157.90 crore, while PAT increased from ₹12.82 crore to ₹106.68 crore.
Read More: Shankesh Jewellers Limited IPO: Price, Dates, GMP, Review, Financials, Allotment & Key Risks
Shankesh Jewellers Revenue Growth and Profit Margins
One of the strongest aspects of Shankesh Jewellers' financial performance is the expansion in margins. The EBITDA margin increased from just 2.69% in FY2024 to 4.65% in FY2025 and further to 9.68% in FY2026. Similarly, the PAT margin increased from 1.21% to 2.87% and then to 6.54%.
This means that the company is not merely growing its top line; it has also generated significantly more profit from every rupee of revenue. However, investors should examine the underlying reasons behind this margin expansion before assuming that the FY2026 level will continue at the same pace.
Why Did Shankesh Jewellers' Profitability Increase So Sharply?
The company's strong bottom-line growth has been supported by higher gold prices, improved realisations, and operational efficiency. PAT increased from ₹40.31 crore in FY2025 to ₹106.68 crore in FY2026. This represents a substantial increase in profitability compared with the relatively moderate revenue growth.
Higher domestic gold prices increased the value of gold sold and supported revenue realisation. Improved cost management and operating efficiency also contributed to the improvement in margins. However, the gold volume data presents an important qualification to this growth story.
Shankesh Jewellers Gold Processing Volume: Volume vs Value
Shankesh Jewellers processed approximately 1,935.92 kg of gold in FY2025. This declined to 1,397.48 kg in FY2026, representing a decline of approximately 27.8%. Despite this fall in gold processing volume, revenue from operations increased by 16.17% in FY2026. This creates an important volume-versus-value paradox for investors.
The company's revenue growth during FY2026 was primarily supported by higher gold selling prices rather than an increase in the quantity of gold processed. Therefore, investors should monitor whether profitability remains strong if gold prices stabilise or decline. Higher gold prices can increase the value of jewellery sold, but they can also affect consumer affordability and discretionary demand.
Read More: Shankesh Jewellers IPO: A Comprehensive Guide For Retail Investors
Shankesh Jewellers EBITDA and PAT Margin
The improvement in EBITDA margin is particularly notable:
- FY2024: 2.69%
- FY2025: 4.65%
- FY2026: 9.68%
PAT margin followed a similar trajectory:
- FY2024: 1.21%
- FY2025: 2.87%
- FY2026: 6.54%
The sharp increase suggests considerable improvement in profitability. However, the company itself remains exposed to gold-price movements and working capital requirements, which can influence future margins. The sustainability of the FY2026 profitability level will therefore be an important post-listing metric.
Shankesh Jewellers ROE and ROCE
Shankesh Jewellers has reported strong return ratios compared with its listed peers. Its ROE increased from 21.26% in FY2024 to 40.08% in FY2025 and 50.94% in FY2026. ROCE also improved from 16.46% to 26.28% and then to 41.57%.
Shankesh Jewellers ROE vs Peers
For FY2026:
- Shankesh Jewellers: 50.94%
- Shanti Gold International: 23.42%
- Sky Gold & Diamonds: 23.37%
Shankesh Jewellers ROCE
Shankesh Jewellers' FY2026 ROCE stood at 41.57%, reflecting efficient utilisation of capital. The asset-light nature of its business model is an important contributor to these return ratios because the company does not need to maintain heavy in-house manufacturing infrastructure.
Shankesh Jewellers Jobworker Attrition Risk
The company's dependence on third-party jobworkers deserves particular attention. Jobworker attrition increased sharply over the three years:
The FY2026 attrition rate of 17.24% is significantly higher than the 1.10% recorded in FY2024. Shankesh Jewellers has 72 associated jobworkers, and most arrangements are based on one-time work orders rather than long-term exclusive contracts. While this gives the company flexibility, it may also expose it to the risk of jobworker attrition and competition for skilled artisans. This is an important metric to monitor after listing.
Read More: Shankesh Jewellers IPO Review: Should You Apply?
Shankesh Jewellers IPO: Key Details
Shankesh Jewellers IPO is a ₹367 crore issue comprising a fresh issue of ₹274 crore and an offer for sale of ₹93 crore. The IPO is scheduled to open on August 18, 2026, and close on August 20, 2026.
Shankesh Jewellers IPO Issue Break-Up
The IPO has been divided between different investor categories as follows:
The IPO has a minimum subscription requirement of 90%.
Shankesh Jewellers Valuation: Is the IPO Expensive or Cheap?
Valuation is an important consideration in the Shankesh Jewellers IPO. At the upper price band of ₹93, the FY2026 Basic EPS of ₹9.09 implies a pre-IPO P/E of approximately 10.24x.
The company's pre-IPO P/E is substantially below Sky Gold & Diamonds' 34.86x and also below the stated industry average P/E of 22.45x. Therefore, while the headline valuation appears competitive, investors should not evaluate the IPO solely based on its P/E discount.
Shankesh Jewellers IPO: Debt Reduction Opportunity
One of the important uses of the fresh issue proceeds is repayment or pre-payment of certain borrowings. The company plans to use ₹158 crore from the IPO proceeds toward repayment/pre-payment of borrowings. This could reduce finance costs and strengthen the balance sheet.
In FY2026, the company incurred finance costs of ₹13.34 crore. Lower debt could potentially support future profitability by reducing the interest burden. The company's DSCR has already improved substantially:
- FY2024: 2.21x
- FY2026: 9.45x
Its FY2026 Net Debt/EBITDA stood at 1.06x. These metrics indicate a significant improvement in debt-servicing capacity.
Shankesh Jewellers Working Capital and Cash Flow
Working capital remains one of the biggest areas investors need to monitor. The company reported Core Net Working Capital days of 81.33 days in FY2026, with inventory holding at around 54 days.
The business requires significant capital for gold inventory and trade receivables. This can create a gap between accounting profits and actual cash generation. This issue is visible in the company's operating cash flow. Net cash flow from operating activities was:
- Negative ₹23.11 crore in FY2025
- Only ₹0.33 crore positive in FY2026
This is an important consideration because the company reported PAT of ₹106.68 crore in FY2026. Therefore, the conversion of reported profits into operating cash remains a key area for post-listing monitoring.
Shankesh Jewellers Product Returns
Product returns as a percentage of revenue increased from 4.36% in FY2024 to 7.22% in FY2026. According to management, these returns are primarily associated with customer preference changes, such as modifications in style or weight, rather than issues related to purity or product quality. Nevertheless, the increasing return ratio is a metric investors should monitor because it can influence working capital requirements and operating efficiency.
Shankesh Jewellers Legal and Tax Overhangs
Investors should also consider the company's disclosed legal and financial matters. A promoter is involved in a civil writ petition regarding a ₹2.49 crore dispute over redevelopment premiums for a property in Zaveri Bazar.
The company also had an outstanding income-tax demand of ₹1.06 crore as of March 31, 2026. These matters may not necessarily have a material impact on the company's operations, but they remain relevant for comprehensive IPO due diligence.
Shankesh Jewellers IPO: What Should Investors Watch After Listing?
For investors tracking Shankesh Jewellers after its IPO listing, the following indicators will be particularly important:
- Gold processing volumes to determine whether growth is supported by actual volume expansion.
- EBITDA margin to assess whether the FY2026 margin improvement can be sustained.
- PAT margin to identify the effect of gold prices and operating efficiency.
- Operating cash flow to determine whether accounting profits are translating into cash.
- Inventory days and working capital, given the capital-intensive nature of the business.
- Jobworker attrition: particularly after the sharp increase to 17.24% in FY2026.
- Product return ratio: which increased to 7.22% of revenue.
- Customer concentration, especially the contribution from the top 10 customers.
- Debt reduction to assess whether IPO proceeds actually strengthen the balance sheet.
- ROE and ROCE to determine whether the company's high return ratios remain sustainable.
Swastika Investmart Rating on Shankesh Jewellers IPO
Overall Rating: Neutral
Swastika Investmart has rated the Shankesh Jewellers IPO as “Neutral.” The brokerage acknowledges the company's strong profitability growth, with PAT margin improving from 1.2% in FY2024 to 6.5% in FY2026, along with its asset-light business model, strong ROE of 50.94%, and ROCE of 41.57%.
However, the brokerage highlighted concerns over weak cash-flow generation, as operating cash flow was negative in FY2025 and only marginally positive in FY2026. It also noted that rising gold prices and inventory gains have supported recent profitability, raising questions about the sustainability of margins.
At around 12.8x FY2026 post-issue P/E, Swastika Investmart considers the IPO fairly to fully valued. Investors should therefore monitor working capital efficiency and margin stability after listing.
Conclusion: Shankesh Jewellers Profitability and IPO Outlook
Shankesh Jewellers has built a strong profitability profile over FY2024-FY2026, with revenue rising from ₹1,061.78 crore to ₹1,630.78 crore and PAT increasing from ₹12.82 crore to ₹106.68 crore. EBITDA margin expanded from 2.69% to 9.68%, while ROE and ROCE reached 50.94% and 41.57%, respectively.
At the same time, investors should not overlook the warning signs. The 27.8% decline in gold processing volume, dependence on higher gold prices for value growth, weak operating cash flow, rising jobworker attrition, increasing product returns and customer concentration all raise questions about the sustainability of the FY2026 profitability level.
Therefore, the Shankesh Jewellers IPO offers a combination of strong historical profitability, an asset-light B2B model and comparatively attractive headline valuation, but it also carries meaningful working-capital, commodity-price and operational risks. Investors should carefully evaluate the company's future cash-flow generation and margin sustainability rather than relying solely on historical PAT, ROE, ROCE or P/E metrics.
For more IPO and market-related updates, investors can follow Swastika Investmart and review the Red Herring Prospectus for complete information on the issue and associated risk factors.
