Uday Jewellery (UDAYJEW) Q2 FY27 Profit Jumps 58% on Strong Sales, But Margins Soften
Uday Jewellery's Q2 FY27 revenue and profit grew strongly year-on-year, though sequential margin compression hints at rising costs alongside expansion.
Uday Jewellery posted a 29% rise in revenue and a 58% jump in net profit for Q2 FY27. While yearly margins expanded, costs grew faster than sales quarter-on-quarter, squeezing profitability from the prior quarter's peak.
For Uday Jewellery, a B2B manufacturer of studded jewellery, the September quarter is about capturing the early momentum of India's festive season. The company delivered robust top-line growth, but the path to the bottom line revealed the costs of a larger, merged entity.
Revenue for Q2 FY27 stood at ₹209.35 crore, a 29% increase from the restated year-ago quarter. Net profit grew even faster, rising 58% to ₹14 crore. The company's net profit margin improved to 6.7%, up 240 basis points from last year.
Revenue & profit
Revenue (₹ Cr)
Profit (₹ Cr)
Net Profit Margin (%)
| Metric | CurrentQ2 FY27 | PreviousQ1 FY27 | Same quarter LYQ2 FY26 |
|---|---|---|---|
| Revenue (₹ Cr) | 209.35YoY +54% | 143.27 | 135.63 |
| Profit (₹ Cr) | 14.00YoY +139% | 10.67 | 5.87 |
| Net Profit Margin (%) | 6.7YoY +56% | 7.4 | 4.3 |
The Merger's Shadow on Growth
The strong yearly growth figures require context. According to a report by StockWatch, the year-ago numbers were restated following the NCLT-approved merger of Narbada Gems and Jewellery. Measured against the original, pre-merger base, revenue growth would appear at 54% and profit at 138%. This highlights that a significant portion of the growth is inorganic, stemming from the combined entity's scale.
Why Margins Gave Ground
While yearly profitability improved, the quarter-on-quarter story shows pressure. Revenue jumped 46% from Q1, but profit grew only 31%. The net profit margin contracted by 70 basis points to 6.7%. StockWatch notes that operating margin slipped sequentially from 11.07% to about 10.19%.
This squeeze came from costs rising even faster than sales. Employee benefit expenses soared 268% year-on-year, while finance costs jumped over 600% to ₹3.14 crore. These increases reflect the integrated costs of the larger post-merger balance sheet and likely higher working capital needs.
A Strategic Shift in the Works
Looking ahead, the company is pivoting its model. In October, it announced a new job-work focus where customers supply gold, and Uday earns a manufacturing fee. Analysis by Minerva Capital suggests this shift could lower gold inventory, improve working capital efficiency, and raise capacity utilisation.
The company also appointed a PR firm and is exploring corporate tie-ups. However, no formal management guidance or analyst coverage exists for this micro-cap stock, leaving the market to interpret the raw numbers. The stock entered the results at ₹217.9, down 4.7% over the prior month.
Key Points
- Uday Jewellery's Q2 FY27 revenue and profit grew 29% and 58% year-on-year, respectively, against a restated base following the Narbada Gems merger.
- Sequential margin compression occurred as expenses, particularly employee and finance costs, grew faster than the 46% quarter-on-quarter revenue surge.
- The company is shifting toward an asset-light job-work model to reduce inventory burden and improve working capital, though its impact is not yet visible in quarterly numbers.
- With no formal analyst coverage or management guidance, the stock's reaction and future trajectory rely heavily on execution of this new strategic focus.
Hexa Perspective
The quarter solidifies Uday Jewellery's position as a larger, scaled entity post-merger, evident in its highest quarterly profit in the last six quarters. However, the sequential margin dip is a clear signal that this new scale brings higher fixed costs and financing needs.
The promised shift to job-work is a logical response to ease the working capital intensity that likely drove the interest cost spike. Success now hinges on converting this strategic intent into tangible contracts that can offset the margin pressure and drive asset efficiency in the coming quarters.
Also read
Want this applied to your portfolio?
Talk to a HexaWealth advisor, or sync your mutual fund data for insights tailored to your holdings.
