Augmont Enterprises (NSE:AUGMONT) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Augmont Enterprises Limited Q2 and H1 FY 'twenty seven Earnings Conference Call. Management's commentary concludes. Please note that this call is being recorded. I now hand the conference over to mister Divakar Pengle from Ernst and Young. Thank you, and over to you, sir. Thank you very much, Inba. Good evening, everyone, and thank you for joining us today. On behalf of Augmont Enterprises Limited, it gives me great pleasure to welcome you to the company's first earnings conference call following its listing. We will discuss the performance for q two and h one f I twenty seven. We are delighted to have you with us as we begin this new chapter in AUGMONT journeys as as listed company..

0:50 Joining us from the management team are mister Ketan Kotari, full time director, mister Mahindra Kumar Bafna, full time director, mister Amit Kumar Solanki, nonexecutive director, mister Sachin Kutari, nonexecutive director. Before we proceed, I would like to draw your attention to the safe harbor statement contained in the investor presentation. Certain statements made on today's call may be forward looking in nature, and the relevant safe harbor provisions will apply. We will start with the management's opening commentary, following which we'll open the floor for questions and answers. With that, I'd now like to hand over the call to Ketan. Over to you, Ketan. Thank you, Deepakanji. Good evening, everyone. Thank you so much for joining us today for our mid and earnings call following our listing in August.

1:38 So we'll be covering q two and h one FY twenty seven. But, before I begin, we would like to take a moment to thank all our shareholders and investors for this trust and confidence that you have placed in us. Our listing marks an important milestone in our journey, and we are very grateful to everyone who has supported us along the way. As we begin this new chapter as a listed company, we remain focused on executing our strategies, strengthening our business, creating sustainable long term value to all our stakeholders. I would like to take some time to explain the entire business, because of the fact that this is a first call, and, we don't really have a listed PR. So it's very important for me to explain the business. And before I do that, I just wanna wish all of you all, very happy Diwali in advance.

2:31 So what exactly is AUGMONT? This is AUGMONT at a glance. AUGMONT is India's completely integrated gold and silver platform. It is India's number one gold and silver platform. It is the platform which enables the entire life cycle of gold. So just to give you a a perspective, we did revenues of 94,000 plus crores in FY twenty six. We have a refining capacity of 284 metric tons. Our ROE for FY twenty six was 51%, and we are present across 24 states in India. We are a technology led platform. We span the entire gold and silver value chain right from procurement, refining, trading, digitizing, distribution. We have two platforms.

3:17 One is called the AUGMONT SPOT platform, which is for the enterprise business. Basically, all the jewelers buy their large bar requirements from this platform. Besides gold and silver, obviously, we have other products as well, including diamonds. This is where all the jewelers, procure their physical gold requirement and with physical delivery. There is no brokerage charge on the platform. The other is the consumer platform, which is called the gold for all ecosystem. We enable millions of retail customers for their investments in gold, leveraging of gold, and monetization to products like digital gold and silver with SIPs, coins and bars, EMI jewelry, gold loans, and old gold exchange. Just to give you a brief about our evolution, the company started in 2012.

4:06 Why this company was incorporated is because before 2012, gold has always been traded on a phone based, system. It was very inefficient, very fragmented, and led to a lot of disputes. There were a lot of middlemen who used to default on their delivery obligations or price obligations to jewelers. In India, the derivatives exchanges started in 2003, but they are up that related to spot, physical market did not take off. The very nature of this industry, if you go to see globally also, there are no exchanges for the spot market. It's mostly an OTC market. In fact, both these derivatives exchanges had their physical spot platform where the liquidity never, took off. Eventually, realized that we should have a platform of our own. When we started 2000... In 2012, the idea was to solve all gold related problems using technology.

4:57 And in 2012, when we started, we started this spot platform. Eventually, it it immediately took off as, India's most favorite platform for price discovery and physical delivery. The same year, started EMI jewelry, which is a product which enables millions of retail customers to purchase basic investable jewelry by paying, over a bit of time and then taking delivery. So it's a forward looking product. In 2013, we were the first ones to start digital gold, enabling retail customers to buy gold in fractional quantity for physical delivery because the feature of physical delivery was not available on ETFs. In 2016, we started our first refinery in Uttarpur, Uttarakhand. During COVID, we developed the gold for all platform with a vision to enable the entire life cycle of gold to the customers. Basically, you have many platforms for financial services, but for gold management, there was no platform.

5:52 Here, we integrated the EMI jewelry and digital gold and started other products like gold loans to complete the life cycle. We've been ranked by Dun and Bradstreet among the top one fifty unlisted companies, but now, obviously, in 2026, we've got listed. In 2023, we started, several gold again as a part of gold for our platform. Our second refinery came up in Navi, Mumbai. Last year, started the LGD platform, and we have also added natural diamonds to this platform. This year, we got listed in August, and we also got the trading license for a subsidiary to, trade directly on MCX. We have, an, we have a scale across the country.

6:39 So just to give you an idea, in this quarter alone, the number of gold for all stores that we have has increased from 180 to one twenty two. The number of fintech partnerships that we have for a gold for our platform has increased from 231 to two forty five. Our retail point distribution centers have increased from seven thirty one to seven fifty one. Our retail touch points have increased from 5,517 to 5,558. The registered members on the spot platform has increased from 5,271 to 5,309, and the registered customers on the platform has increased from 50,600,000 to 52,300,000. We have two refineries and 20 spot delivery centers across the country. Very important for me to explain to you how gold moves in this value chain because the entire business model is based on the life cycle of gold.

7:32 In India, we we do not really have too many gold mines, so most of the gold gets imported or recycled. So whatever gold gets, imported or recycled comes to the refinery. The pure bars and coins are then sold in the ecosystem markets. Jewelry is manufactured out of these bars. Jewelry comes back in the ecosystem either for recycling or it goes for loan against gold. If it's auctioned, again, it comes back for recycling. And the third way where it comes back for recycling is monetization. So this is the entire life cycle of gold. Augmont is the only company which covers the entire life cycle of gold right from refining to retail, and that is the idea about Augmont to enable people to manage their entire gold through its life cycle. So we are sourcing and refining.

8:18 We create and distribute. We monetize and unlock, and we recover and recycle. The the entire life cycle is covered through our b two b and b two c platforms. Similarly, in a person's life, gold plays a very important role right from birth to legacy. Whether we talk about investments in gold when a new child is born or availing loan against gold when there is an emergency or other products and services related to a person's life cycle. So AUGMONT is present across the entire life cycle of a human, and right... These include births and beginnings, milestones and aspirations, security and legacy. So two life cycles, refining to retail and birth to legacy in one platform, AUGMONT. So AUGMONT is divided into two platforms as I as I explained, but one integrated ecosystem.

9:09 So we have the spot platform where we have the benchmark prices for all the jewelers to buy their physical gold. This is just not a platform where the prices are disseminated, which is the case of the many, other, regional competitors. This is a truly a platform where the actual trading happens and the delivery happens. This is operations since 2012, and this is the only platform operational across, multiple states. There are regional platforms who operate in single or couple of states only, which... But they do not have a tech platform. We do spot trading with physical delivery, then you have, large bars, lab grown diamonds, and other products as well. So this contributes, this contributed around 93% of our revenue in FY twenty six.

9:56 The gold forum platform is a consumer platform, which has digital gold and silver, jewelry, and coins, either on full payment or on EMI. We have loan against gold and sell all gold. Both these platforms are enabled through a technology stack, which is built in house, and we have partner APIs as well. And we have two refineries to support the same as well. In the gold ETF, we have... We are authorized participants or market maker across both gold and silver ETFs. So what is our role? Our role in the primary market is creation and redemption of, ETF units either from physical to ETFs and ETFs to physical.

10:44 In the secondary market, again, we do the market making of these units, both on both the bid and ask side. So, as a role of authorized participant and market maker, we enable the entire, back end for, anything related to gold and silver ETFs when it comes to physically conversion to, units and units to physically. And there are limited number of companies, who are dependent like this, and Augmont is available across all the ETFs. The consumer ecosystem, as I explained, has multiple products across savings, jewelry, and credit. So the first product which I would like to explain is digital gold and silver. We were the pie... We have been the pioneers.

11:33 Customers are able to buy one off. They're able to buy in SIT formats. This is basically buying of fractional gold and silver where the physical delivery is given to them in the vault, overlooked by an independent trustee. And whenever the customers want to opt for delivery, they opt for delivery at their doorsteps, or they can sell back, or they can redeem for jewelry at partner jewelry stores. So we have more than 245 partner brands, including the likes of Gulag, Navi, CreditBee, and many others. Then we have EMI jewelry. It is basically investable jewelry for retail customers who are overwhelmed to enter a typical jewelry store because the typical jewelry store has a very large minimum requirement of purchase.

12:25 Here, we have partnerships with various companies like,, AP loans, IFL finance, wherein all the branches where we keep dummy articles made of alloys. These articles include small jewelry articles like one gram pendant, two gram chains, four gram chains. When the customers come to these outlets, they select the article, the price is fixed, and they just pay a down payment. After that, they pay... Make payments in three, six, or nine months, and after that, they take the delivery. So it's a forward booking product. It's not a finance product. And because of the fact that they can book the prices, in advance, it gives a big, benefit to them.

13:13 Again, because these customers are bottom of the pyramid customers, for them, a jewelry article is something that they can pledge or they can wear unlike a gold coin, which is not really useful for them. So this has taken off, as a product which has been growing year on year, since 2012. We have millions of retail customers who have taken delivery. And because it's a loyalty driven program or a product, customers end up buying a pendant first and then a chain later on, and it goes on. Then we have gold and silver coins and bars. These are available in various denominations across the country, both online and offline. The... We have 751 channel partners across the country where we distribute these products.

13:59 And amongst the online partners, we have all the, large brands, including quick commerce platforms like ZEPTO and e commerce platforms like Amazon, Flipkart, Augio. This also helps us in brand building and marketing because the customer's trust is built when they see these products. For loan against gold, this is a product where Augmont's role is limited to providing the entire technology stack, the operational support, and the marketing support because of the brand that we have. And our partner NBFCs, they provide the loans. Only NBFCs can provide the loans, and hence, this product is this product is designed accordingly. The entire tech stack enables, the gold loan to be provided in a tech first approach. The network includes 122 Augmont gold for all centers.

14:55 These are operated by a partner in BFC called Finco Financial Services, and there are other partners as well. Here, we do the cross selling of other products as well in these Gold For All centers. So the Gold For All network is basically a digital network omnichannel, both through the app, through the web, partner apps, as well as our network and partner networks. Gold recycling has really become a very important sourcing for us, especially in the last couple of quarters. So this particular financial year has been very unique because of the fact that macroeconomic environment has been different. In this situation, India required that as much as possible gold gets recycled instead of the imports going up.

15:43 We were very agile and because of the fact that we have the ecosystem and the network, we were able to quickly move our procurements from various sources to recycling as well. So there's a... There's been an eight x increase in our, gold recycling business on a year to year basis. Total contribution of just 3% has become 24.5%. But we have all the sourcing channels. So including gold recycling, we also we also have other, sources including nominated Indian banks, international banks, dory bar imports. These dory bars are imported and recycled, or refined rather in our in our refineries. And we also import through the IIBX, which is an exchange in the Gibbs City. Why is recycling so important?

16:29 It it it basically provides us a cushion from any changes in in in international scenarios where imports become difficult. So recycling is something that we have really given a a very important focus to, and we have been able to scale up very quickly as well because of the fact that we have been, well distributed across the country, and we have two refineries. It also leads to stronger, loyalty for... With our partners, and it helps in the formal gold value chain. In fact, large number of national, jewelry chains have started recycling and requesting for India good delivery bars, which Augmont provides as compared to imported bars. Even... But given the scheme of things, we have been able to scale this up. Technology is in AUGMONT's engine. It prices, protects, distributes, scales.

17:21 We are an entirely tech enabled ecosystem for both our platforms, and we use technology for pricing. For example, you know, because of the fact that we have an in house system, we are enable... We are able to provide the price discovery, on an ongoing basis on a real time basis. These prices have become the benchmark prices. We do not charge any brokerage for this because we simply replace the the phone based trading with, with, tech based platform since 2012. So price discovery is... Has become one of our motes, and these prices are being referred to by everyone. Protection, because of the fact that we have a very strong technology stack, we are able to manage our risk very well, and we are able to hedge back to back, and we are able to reconcile on an ongoing basis through these tech enabled ecosystems.

18:12 Obviously, because of the technology stack, we have been able to partner and have integrations... API integrations with institutions like banks and VFCs and fintechs. Products like Digital Gold is offered $24.07, and we have real time pricing. Because of this particular stack, we have been able to reach five... 54,000,000 retail customers, and it has increased from 28,000,000 customers in f y twenty four to 54,000,000 customers. Because of the scale and because of the fact that technology cost gets amortized over a large number of customers, our cost or employee cost has gone down from 0.06 in f f and e four to 0.03%. So scale has really helped us, and all the cost that have been, all the investment that has been done in in technology is giving us the returns.

19:02 So we have the gold loan stack. We have the digital, gold stack. We have the spot platform, and we have the new age platforms like diamonds, which is entirely built in house. What the platform has really helped in drive in the last two financial years is 2.7 x revenue growth, 4.6 x profit after tax from 76 crores to $3.48 crores, 5.7 x in terms of gold for our revenue from 7... 1,100 crores to 6,600 crores, and 7.5 x in digital gold revenue from $2.88 crores to 2,150 crores. Augmont has a very strong competitive edge, and these are the primary reasons why. As I explained, technology and pricing has become our very strong competitive edge and a moat and also an entry barrier for others.

19:54 This platform has been built over so many years. The trust has been built, and it has been distributed India wide. And price discovery, as I said, is very, very critical in this. We have various licenses and accreditations. These include India Group Delivery, where we are able to deliver on on all the exchanges in the country. We have AUG two. We have NABL registration. We have BIS. We have RJC, which is responsible jewelry council globally recognized, and we are a three star export house. So these licenses and accreditations create a strong competitive edge as well for us. We have a network and trust. We have a network of more than 5,300 jewelers on the platform, 20 delivery centers, as I said, around two fifty fintech partnerships 52,000,000 plus registered customers.

20:40 And, of course, capital also really helps. The the fact that, gold businesses are not allowed to leverage their balance sheet as per RBI rules, bank debt is not available. So, obviously, growth comes from equity funded, fund only, and, it requires that working capital. So capital also becomes an entry barrier for anyone else wanting to scale up quickly. So if you consider... If you compare us with any jeweler or traditional trader, the price risk exposure for us is hedged always as compared to others. We have a very strong and high regulatory advantages compared to others. Our network and platform power is very strong as compared to a jeweler or trading house. In fact, our business is based on the entire platform. Our capital efficiency is much higher than these, players.

21:26 So our our was 51% in f y twenty six, and our licenses and accreditations obviously, provide us with a very high competitive edge as compared to these players. What are the new growth avenues for our company? Number one is electronic gold receipts. This is one product which is going to help, and we are very optimistic about the formalization and financialization of physical gold. What we're talking about is this is a, product which is one of its kind in the world where gold gets dematerialized through the exchange ecosystem. NSE has chosen Augmont as its partner, and, we have been working on the entire technology stack with them. Because of the fact that we have all the licenses, the refineries, the distribution, as well as the technology stack, we've been able to partner with NSE.

22:23 What happens in the EGR ecosystem is that physical gold gets deposited. They, there is a vault verification, then EGR gets created. It's held in DMAT, and the purchase and sale of EGR has happened. What can customers do with this is they will be able to trade, they will be able to pledge, they'll be able to redeem into physical coins as little as one gram of gold coin. They can also lend via the securities lending and borrowing platform to earn annual interest. Now EGR is one platform or one product which can actually help the Indian ecosystem also to reduce imports because old gold can also be converted into EGRs, and EGRs can then be lent to manufacturers for their manufacturing. So it is a very critical product, not only for the industry, but for the nation.

23:09 And we believe, just the way we have seen in other products, which have really helped people move from physical transactions to digital transactions, including platforms like UPI. We believe EGR is gonna really help the formalization and financialization of physical gold. Just, just to give you a quick comparison in, as compared to gold ETF and digital gold. In in EGR, what happened is all... Obviously, it's backed by physical gold, but it's also traded on the exchange unlike a digital gold. ETF is actually a, these are units, but they do not have a one is to one because the fund houses also have to carry some cash component for the expenses. The key features, obviously, for EGR that you can, as I explained, buy, sell, redeem into small quantities and lend them also.

23:59 What is Augmont's role? So as as I already explained in ETF already, Augmont is an authorized participant and a market maker. In Digital Eagle, the entire stack belongs to Augmont whether it's pricing, whether it's partnership, whether it's custody. But custody is obviously held by a third party independent custodian and verified daily. And... But... And deliveries are also given to the customers. In case of EGR, Augmont's role is that it's an authorized gold liquidity provider, authorized each EGR liquidity provider, and collection center services for EGR segment. So basically, old gold can be converted to EGR at Augmont outlets, and Augmont will also provide physical delivery to the customers. Augmont will make money on the basis of spreads as a liquidity provider, including delivery and moving charges, which is also similar to the case of digital gold.

24:47 However, in gold ETFs, there is no physical delivery of small units. So EGR provides an additional mechanism of earning revenues. Another platform where we are optimistic about the scale is the diamond marketplace. It's just recently was started, and we have around 1,000,000 stones listed from growers and dealers. Again, here, we are market based. We do not carry any inventory. The growers and the and the polishers are matched with the jewelers. The QCs done by us and deliveries given to them. We have around 8,000 carats sold in the in the earlier version that we've just started, and we have around 250 dealers already. Just to give you a brief about the India gold market, India is a... One of the biggest markets in the world for gold. We have demand anywhere around 700 tons of gold.

25:43 The digital gold market is expected to grow to 55 tons as per techno pack report. The lab grown diamond market is expected to grow to 63,000,000,000 rupees, 6,300 gross rupees by FY thirty. The gold and demand supply indicators I already mentioned where, the demand, for jewelry and coins is on the high side as well. Just one thing about the gold market. The gold Indian household hold around 31,000 tons, which is around $3,400,000,000,000. As compared to that, the equities market is $5,000,000,000,000. There are many organized players in the equity segment, but in the gold market, there are... It's very fragmented, and there are very limited platforms.

26:35 And AUGMONT is number one platform. The other platforms are very regional in nature. So India India's number one gold platform is AUGMONT, and our idea is to glitter a billion lies with the power of gold. This is our board of directors. I'll just quickly run through this. We have four independent directors. This is a leadership team. We've been recognized, by various awards in the industry and, for our trading, refining, and digital platforms, including the number one gold and silver platform awards. We'll just take you through the financial highlights. The most important, point that I would like to highlight about this particular quarter is that our our core business, which is Augmont Enterprises Limited, which is our spot platform.

27:27 The pack has increased from 34 crores to 85 crores, which is two and a half x of, quarter two f y twenty six and three point '9 x of q one f y twenty seven. The bad margin are at point 65% as compared to point 18% in q two FY twenty six even as revenue was lower. EBITDA is low... Risen as well to 113 crores from 50 crores a year ago, And this is not a one quarter effect. Our h one pad is at 107 crores, which is 75% higher than f y twenty six. It's already down 70% of its full year pad of 153 crores. So our core business has done really well, and we are very confident, about, our core platforms, both Augmont Gold for Augmont SPOT.

28:24 Our consumer revenue has also gone up, by 47% year on year. Although enterprise revenues have, gone down by 32%, the reasons for this is that this particular, quarter has been all about recycling of gold rather than just import gold... Imported gold. In imported gold, what happens is that the working capital cycle is less than two days. Whereas when you source scrap gold, the working capital cycle is as high as four days. That means that same capital is being used, for double the time, and hence, the revenue goes down. However, margins have gone up, profitability has gone up, and it's only because of the current macros, economic macro situation that we had to work around this particular thing by, increasing our margins, but we could not maintain, in terms of our revenues as compared to last year.

29:23 This is the revenues and tonnage breakup for the Augmont SPOT platform. These are the consolidated income statements. Balance sheet. And these are the details about the capital ethics. The entire, 620 crores of fresh issue has been utilized as per the, the Object. RHP. Objectives. Thank you. Wishing you all a very happy Diwali, and I would like, team, Yenba, to take this forward in terms of q and a's. Yeah, Yenba. We can open the q and a.

30:16 Thank you. Ladies and gentlemen, we will now move to the q and a segment. Anyone who has a question may please click the raise hand icon located at the bottom toolbar on your screen. We will wait for a moment while the question queue assembles. We take the first question from Vidansh Tokanya of ZTO Capital. Please go ahead. Am I audible?

31:01 Yes. So thank you for the opportunity. So my first question was actually on the EGR front. You have explained what will be the utmost role in that. But I just wanted to ask you, do you have any idea of the time it may consider to our... Basically, especially what value will it add for Augmont on the top line and especially the bottom line? Hi. This is Sachin here. So as far as the EGR opportunity is concerned, it is very early to quantify the opportunity or provide a specific outlook for EGR. Our current near term focus is to build this ecosystem and this entire framework so that we can drive the adoption. And rather than looking at a near term revenue contribution, we feel that our capabilities across refining, sourcing, technology, and distribution, we believe that we are well positioned to participate in the EGR ecosystem.

31:57 However, India is estimated to have around 31,000 tons of privately held gold, and AGR provides an opportunity to put a part of this idle gold to productive use and demobilizing this gold. So we believe that this is a very important step towards formalizing the India's gold ecosystem. As along with it, it will also help support the broader objective of India about mobilizing domestic gold and reducing the dependence on import. Is... Any idea of basically... Even in the long term, any idea of how much... Basically, what timeline we are looking at? So currently, Augmont a new category has been this quarter, the product will start.

32:52 Okay. And second one will be on the, basically, your main business front. So I also... The gold prices also, I think, have had an effect on your top line this quarter. So do... What what do you, basically, idea going forward, especially for FY 2728? Anything idea that you can give? So you are asking for an outlook on gold prices. That is something that no one knows. Sorry. Especially... Yes. And also, we don't know how the gold prices will move in the next financial year or so. However, as compared to last year, the gold prices have gone up by almost 40% of... On year on year basis.

33:39 And, that's where you see that, our balance sheet is always on INR terms. And whatever be the price, we believe that the capital that we have, will efficiently utilize that capital to generate revenue and profit for the company. Okay. Thank you. Thank you. Our next question is from Mahendra Jain of Way2Wealth. Please go ahead. Mr. Mahendra Jain, could you please unmute your microphone and go ahead with your question? There seems to be no response coming in from this connection.

34:26 We will therefore move to our next participant. That's Divyesh Mehta of Danero Cap Surf. Please go ahead. Yeah. Am I audible? Yes. Yeah. Hi, Ketan. Congratulations to you on great set of numbers. Thank you. Happy Diwali to everyone in the AUGMONT's team. Thank you. Thank you so much. So, Ketan, I had a few questions. First and foremost important question for me was, like, the last quarter, the procurement in terms of scribe gold was very high, which is, I think, highest ever in the Augmont's history. That is 25% what I understand. Yes. So how do we see this trend going forward in the future? Do we see this trend maintaining, again, in the last quarter? Or do we see the, imports from Dorebar increasing and then coming to the normalized level of 40, 45% as usual for us?

35:25 So what we... What I can tell you is there are two factors. One is, obviously, the whole behaviorism of consumers has moved towards exchange of old gold to new gold. So whenever because customers are getting their old gold to buy new gold, and a large part of that is happening as you know from all the earnings call from all the listed jewelry companies. These old gold jewelry, obviously, has to be melted and refined into pure bars, which which is basically serviced by companies like AUGMONT. Yeah. The recycling business is something that has always been on the higher side. It's just that because of the overall situation that is there, the the company's focus has also shifted more towards making sure that we are completely hedged in any sort of situations where the import restrictions or any kind of changes that happen in imports.

36:15 Having said that, obviously, the import of dore bar is something that will continue to happen. It all depends on the pricing of gold and the disparity that's going in the market. There are times when the disparity between international prices and Indian prices is high, where it becomes unviable for any imports to happen. That is where Augmont's then comes into the picture where the entire ecosystem is able to recycle old gold. So for just an example, there are companies and there are institutions who only import and sell, and they are not able to do that when there is a disparity. However, because AUGMONT has a setup for recycling with two refineries and multiple centers, we are able to do that. And as I explained, this is the strength that we have in terms of procurement mix, and this also enables us to have better profits because there are double margins because when we are buying the old gold, there is a margin.

37:04 And when there are... We are refining and selling the, refined gold, there is an additional margin. Okay. But but then how do you see this trend going forward? Because the... At the end of the day, when we talk about the margins, this quarter, the margins were high because we did more of a scrap gold in terms of procurement. So I think we are definitely focused a lot on the recycling of gold. Now what has happened is when when you talk about recycling of gold, obviously, there is this particular setup in infra required, which we started focusing more in the last couple of quarters. And, obviously, because of the infra being in place, the focus will be to continue to have more recycling of gold. Okay. Okay. So then then then the working capital cycle, which I think earlier was around one one point seven days, is around four, I think.

37:55 So then then that cycle needs to be, in that range only going forward in future if we continue with the scrap goal. Right? So it's... It depends on the mix that is obviously in the past also we have had Dorebar cycles which have been as long as this. Okay. There is a higher margin on that as well. So if you come... Compare the sourcing of Dorebar and compare the sourcing of recycled gold is on the similar lines. But as I explained, this is the need of the hour, and we were able to scale this. But what also is very important is that this is more stable, in terms of, procurement of old gold because these are relationships with various jewelers and customers across the country through our ecosystem. Okay. Okay. Okay. And one last question from my side. So can you just help us to understand what was the volume growth, in terms of segments? So in, AUGMONT SPOT and, AUGMONT GOLFOR in the last quarter?

38:51 So the revenue contribution in this quarter from Gold for All business has increased to 13% of the overall revenue. As compared, to the last year for the entire financial year, it was 7%. So the gold for all business is also growing at its own pace. And if you can guide on the volume growth? So volume numbers, we don't have actually right now, but, in the terms of value, it has grown, and 13% is the value contribution. Not an issue. Not an issue. Thank you. Thanks a lot. Thank you. Yeah. Thank you. Reminder to our participants, if you wish to ask a question, you may click on the raise hand icon from the participant tab on your screen.

39:38 We move to the next question. That's from Pakshul Jain of Axiom Research. Please go ahead. Hi sir, congratulations on your distinct phone number. I just wanted to understand sir, revenue. Sorry to interrupt, Akshay. Could you hold the mic little closer to you? We can't hear you that well. And repeat your question. It looks like you muted your microphone. Yeah. Is it better? Yes. Better. Thank you. Yeah. Congratulations on the listing. Just had to ask one question regarding the top line that this year... That this quarter that we've done. You mentioned about working capital as a constraint for, you know, the growth that we have seen. So I could not kind of understand that. What does it mean right now? Because this is the initial con call. Can you discuss more on that part? Like, how does the capital restraint you from going further ahead? And what was the challenges here? Because as we also discussed that there is no war room data available to understand. So what exactly happened here in this quarter specifically?

40:57 Just give us thirty seconds, please. Yeah. So Management, we request you to, I'm sorry. The participants, we request you to please remain connected. The management is discussing the questions, so please, remain connected. So So, basically, you see, in this business, there is a capital requirement because, there is a working capital cycle of two to four days. Now four days because of the scrap where advances are to be paid to suppliers first, and there are bookings that are taken from the customers.

41:50 The customer's money comes in three to four days. And for that particular period of time, we have to block our capital for the goods. Also, Ketan mentioned in the presentation earlier that we are, the gold businesses are not allowed to leverage the balance sheet where we are able to raise funds from the bank, hence, the need for capital. The second part of your question is about the revenue. The reason why the revenues have shrunk is because in this particular quarter, our focus was more on the scrap as a channel for procurement where the working capital cycle increases. So with the capital that we have currently on our balance sheet, we are able to rotate that capital every four times. And hence, though the revenues have come down because of this, but the margins are improved.

42:41 Because, in scrap, as, we mentioned earlier, we make margins on the procurement side when we procure scrap as well as on the sales side where we sell the finished goods. Takshel, do you have any more questions? Yes. So so I do have a follow-up. So, sir, regarding this, we've raised funds in the. So we'll be using them as a source of working capital as well and what what am I understanding is, yes, what are we targeting? So because we raised, I think about probably some crores of order of money. So like, what are we going to use that for? And will that contribute or help us to get a better revenue going forward from here? And what is the version exactly that the company is aiming for?

43:27 Because this is the initial con call. I just want to understand what kind of version are we looking for after the listing. Yeah. I'll just give you an explanation about the objective of the raising of capital, why we raised the capital, what have we done with the capital. The IPO was for 825 crores of which 625 crores was primary. Now the entire 625 crores minus the IPO expenses has been realized with the company for, and the purpose was all about working capital. Now why was this money raised is because we have, we have been stuck with limited number of spot delivery centers. We've been stuck to 20 delivery centers. We've been meaning to expand both the delivery centers as well as number of dwellers on the platform. And because of the fact that a, the prices of gold also went up, the working capital requirement went up, there is no leverage that's possible, and hence, raising of capital became important.

44:18 As we speak, we have started working on all the strategies as mentioned in the RHP for utilization of those funds. In fact, the funds have been utilized for working capital as mentioned in the RHP. The idea is to, obviously, there there are two two to three strategies. One is, obviously, that they're on the spot platform. We want to have more delivery centers and more jewelers. Plus, have added more products with higher margins, including products like diamonds, alloys, chemicals to the same set of jewelers. The other is about the consumer business where we continue to scale because the consumer business is relatively new. We started in... During COVID, and we... We'll we'll continue to have more partnerships and grow through that, and the number of the spot gold for all centers also increasing. We also have the strategy of, improving our refinery refinery accreditations where we have an aspiration to become an LBMA accredited refinery.

45:12 As far as our spot delivery centers are concerned, as mentioned in the RHP that we want to increase from 20 delivery centers to 35 over a period of next couple of years, but we have already identified 10 delivery centers which we plan, to start in the in the the couple of, in the coming quarters in this financial year itself. Okay. Got it, sir. So, basically, from what we understand is it... The number that we are raising about 600 crores, what kind of incremental revenue will this be adding up? As you also mentioned about four days of working capital for the spot business and the other developments that we are doing, what kind of incremental revenue we are targeting for this year basically? And like what is the vision going for the next two to three years?

45:59 It's a combination. Correct. We would not like to put a specific revenue or profitability number against the incremental working capital at this stage. The deployment of capital will depend on market opportunities, available spreads, and also the returns that we can generate at that point in time. Our focus is not on driving the turnover just for the sake of growth, but our focus is on deploying the capital efficiently into opportunities that generate healthy returns for the company. As the additional work... Capital gets deployed, it should give us greater flexibility to capture opportunities across the business value chain while maintaining the return thresholds. Okay, sir. Got it. Thank you so much. I'll get back into the queue. Thank you.

46:44 Thank you. Anyone who has a question may please click on the raise hand icon. We will wait for a moment to check if participants wish to ask a question. We take our next question from Harshavar of TrustMF.

47:30 Please go ahead. Yeah. Hi, Ketan. Thanks for this opportunity. Just wanted to check, as you mentioned, you were constrained by working capital and, you know, are moving towards higher margins with lesser turns, end of the day you are making similar proceed. I just wanted to understand how are things looking in October now that you have adequate working capital and I think festive demand has also seen pickup. And so if you could talk about how are things on ground in October and your outlook for remaining h two. See, the q three obviously has the Diwali season, but the only thing is anything related to...

48:21 We'll just not be able to grow any specific numerical guidance on revenue growth for margins of, FY twenty seven. But given the nature of our business, both, can vary depending on gold and silver prices, business mix, sourcing opportunities, prevailing market conditions. Having said that, we remain confident about the underlying growth opportunities across our businesses. Our focus will continue to be on the profitable growth and efficient deployment of capital, and we'll continue to maintain healthy return ratios rather than pursuing just revenue growth in isolation. So as explained during the IPO roadshows as well as on the call today, if the whole company business model has to be looked in entirety, and that's what we focus on.

49:08 Okay, Kevin. Thank you. Thank you. Our next question is from Meet Mehta of Integrity Ventures. Please go ahead. Yeah. Thank you for the opportunity. I just wanted to understand, you know, what sort of old old portion we are targeting on a sustainable basis if we have, you know, sufficient working capital. So if you can help on that particular thing. Hello? Please wait. The management is muted. Their audio.

49:59 Sure. So we are seeing a very good momentum in all gold recycling. As I explained, you know, scrap has increased from a three percent of a procurement in q two FY twenty six to approximately 24 and a half percent in q two f y twenty seven, which reflects a significant scale up in domestic sourcing. What we expect is that a scrap procurement will remain at healthy levels going forward as well. Jewelers are increasingly promoting old gold for new exchange programs, which is bringing more household gold back into the organized ecosystem. And given India's large pool of household gold, we believe recycling can become an increasingly important source of domestic supply over the time. For Augmont, this also fits very well in our broader strategy of strengthening domestic sourcing.

50:49 Plus, as I explained in the EGR ecosystem as well, old world can be converted into EGR. So the infrastructure that we are doing and we are scaling up across various centers will help in this particular sourcing. If you can, you know, tell us what kind of differential we get on the margins if we are doing, let's say, you know, pure imports versus, you know, old gold recycling. So if you can help us or you can give some color on what kind of margin differential we can get on the old gold refining side. So that would be helpful. Yeah. Hi. This is Amit here.

51:39 Sure. Okay. So as far as the margins you are talking about, those are basically market determined. So it basically depends on the demand and supply. So there are no fixed numbers as such. Sure. And and last thing on the, you know, jewelry side that we are selling to our partners. So if you can help us understand, are we doing that manufacturing in house or we are outsourcing that? Yeah. The manufacturing of the jewelry that we are selling through our partners is outsourced. However, these outsourcing partners are kind of doing it exclusively for us, but they're outsourced. They're not done in the company.

52:26 So it has different kind of Sure. Thanks. That was helpful. All the best for the coming future, and very happy to Ali. Thank you, Ali. Thank you, Same to you. You. We have a follow-up from Pakshel Jain of Axiom Research. Please go ahead, Pakshel. Hi, sir. Thank you so much for your opportunity. I understand two questions. One regarding the Pakshel, your mic is again far away. Could you hold on... Hold it closer to you? And your connection... Yeah. Go ahead. Is it better? Yes. Sir, I just had one question regarding the trade receivables. So they have also gone significantly up from, say, the March to the September quarter. And is it because of this this thing that you're mentioning about the scrapping thing and the working capital cycle bloating from one and a half days to say four days? Is there any reason that is why the traders' labels has gone up? Because I believe that the other products that we have are all directly d two c or direct to consumer kind of products, which are the other products that we have. So what is the significant amount of trade receivables jump that we see right?

53:37 So, Pakshaw, that is basically on account of the last day sales which have been realized, you can say in the first week of October. So it's only the month end sale which are standing, and those have been realized within the next couple of working days. Mister, what I understand is the last four days billing cycle, whatever was there, that was built, and that has not been received as of now. That is the only amount that is there because of the quantum of the revenue that we have. This will be, like, a recurring thing for us. Right? Sorry. Repeat the question.

54:24 Sir, I'm just saying that this will be a recurring thing. Right? Last chart revenue that will be always in our receivable. Right? So about, say, $708,100 crores of debt... Debtors will be standing every quarter or, like, give it a common recurrence for the business? No. It would not be a common recurrence for the business because, sometimes we also receive advance and sometimes, this position comes up. So this will not be a recurring issue. Okay, sir. And one last thing on the margin front. So this quarter, the considerable improvement is seen in terms of margin. So can you just help us or give a number, maybe that is allowed that if you can just understand, what will be the margins going forward because I think it is important that the business is seeing a jump in the margin and I think that is a very big trigger for the business going ahead. So what are your plans for the margins or margins is now what we have currently will be stable or how do you look at it?

55:34 So, Sachin here, the margins on gold and silver are different, and they can vary from quarter to quarter. There's no fixed margin on either metal, and profitability depends on several factors, including what are the metal prices, what are demand and supply conditions in the market, what is the procurement opportunity available at a particular point in time, and the overall business mix and the supply mix. As I mentioned earlier, our focus is not on maintaining a particular margin, but on optimizing the sourcing and capturing the right opportunities so that we can increase the profitability of the company. Okay. Got it. Thank you. Next question is from Nishant Gupta of Minarva Capital. Please go ahead.

56:21 Hi. Sir, I hope I'm audible. Sorry. I joined a bit late, so I'll just ask my question. I have two, three questions around the scrap only. So one is that it's the first thing that I'm, you know, understanding about your company. So when you say scrap, what exactly do you quantify as scrap? Because gold can be melted and, you know, reused, and that is what even the traditional retailers are doing. There are small small workshops where they'll go and, you know, get that done. So one is if you can help us understand what this scrap actually is on the second part, since this is the first time that, you know, your scrap procurement in these 8x. So how much is this sustainable going forward because the entire margin like bulk of that is coming from the scrap. And third is sir if you can quantify what is the yield or what is the typical gap like mark to market let's say gold is selling for let's say, 1 lakh 40,000 right now.

57:09 What would be the scrap price? Just to understand. So if you can give a clarity around these thing... Three things that will be helpful, sir. Thank you. Yeah. So this is Ki Bin here. I'll just explain how the consumers, how the consumer behavior works in the old gold recycling. So when you talk about any of these, chain of jewelry stores who offer old gold exchange for new jewelry, These jewelry, companies have their stores where they just have a, melting machine, where what happens is their old gold is just melted in front of the customer into an ingot. However, that ingot cannot be again manufactured into jewelry immediately because it has a lot of impurities. These ingots have to be refined into pure bar.

57:56 So what happens is for us, the procurement or the old gold recycling that comes to us comes in two forms. Either it comes in the form of old gold jewelry itself, which is then made in in in front of the customers in a furnace, or they come in the form of an ingot, which has already been made in front of the jeweler's customer in their showrooms. However, all these ingots have to be purified into refined bars, and only then they can convert into jewelry. Ingots cannot directly be converted into jewelry because of the various impurities. The whole refining process is all about removing the impurities and making them into fine bars. Now when it comes to manufacturing of jewelry from these fine bars, India obviously has been a big market for recycling. There are various estimates of recycling with with with estimates between 300 to 400 tons of recycled gold annually.

58:45 If we triangulate it with the hallmarking data, which is jewelry hallmarking annually, we'll... We have come to an estimate as per World Council also that this is the kind of recycling that happens. India. So India is a big market because... And this is very clear and evident also from the reports from various listed jewelry companies about the increasing exchange of old gold jewelry. Did I So so just one part is left, sir, the pricing difference which is coming, which is taking the margin. How is that coming from? Because effectively, it'll refine and convert it. So how is that coming in? When you buy it? So what what happens is when the customers are obviously selling their own gold, there is a spread that is always there because they just, you know, there is always a difference between the bid and ask. And because of the fact that there is a handling fee and and processing fee for refining, there is a national income on that as well.

59:39 So that is the difference between the procurement of old gold into, refined bars. And then when the refined bars are sell, they have their own margins as well. Got it, sir. Got it. And would it be fair to say that going forward, we can expect, like, let's say, 24, 25% of your requirement coming from scrap, cotton, whatever. You see that even improving further, Aditi. Okay. So as I explained, this is obviously, depend on the market conditions. But, as I explained in the previous question itself that we have expanded our own centers and plus products like EGRs and old gold converging to new gold the infrastructure that we already have, including the two refineries and the centers that we have. The focus of the company is definitely on enabling more and more gold recycling, because we have the infrastructure and the two refineries.

1:00:31 Great. Thank you, sir. Good evening, Krishna. Thank you. Our next question is from Rishabh Dareva of Nirmalbang. Please go ahead. Hello. Am I audible? Yes. Yes. You are. Yeah. Thank you for having me. I have two questions. Firstly, can you give us a bit more clarity on the economics of our spot, spot platform? Secondly, what would be the... Our utilization of the two refineries that we have? Okay. First, let me answer the second question. You know, as far as the refinery capacity is concerned, we had explained in the past also, during our roadshows that, globally, not only in India, globally, gold refiners always have a higher refining capacity.

1:01:21 It is not because you have to have a 100% utilization or a very high utilization. It is simply because you need to have a very high daily capacity. So in in the coal refining business, unlike in other commodities, the commodity itself is so expensive that any delay in recycling of the metal will lead to a high capital cost in terms of interest cost. So for example, if, there is a sudden, consignment of, say, 500 kilos of dore bar or one ton of dore bar, you don't want to wait over a period of ten days to recycle them and that's why you needed a very high daily capacity. Almost all the refineries worldwide are always, have a higher capacity and utilization is on the lower side. However, this does not lead to any financial losses because a the commodity itself is very small. So, as compared to other commodities which are bulky, here the setup is required is much smaller in terms of the space utilization or the use of labor as well as the fact that there is not much running cost if the refinery equipments are not being occupied or not running.

1:02:28 The main thing that it always is important in the refinery, in gold refinery is the lab, and the accreditation happens of the lab because the purity testing is the most important aspect. So just to just to give you a clarity, the utilization of any refinery in India is on the lower side when you when you take the annual capacity. But that is by nature of this business where you need a very high daily capacity because you cannot wait for the recycling to happen. Okay. Okay. Got it. And on the economics part? So as I explained on the spot platform... So, you know, let me explain what the spot platform is. You know, I was explaining that the derivative exchange when they start the spot exchange for physical metal, they were not able to get liquidity.

1:03:15 So the technology used in exchanges is matching technology where the buyer and the sellers are matched and then the, then the deliveries happen or the settlement happens. However, in the spot market in India as well as globally, the settlement always is, there... There's always a need for some flexibility in settlement, and that's the reason why fixed contracts like derivatives don't work. Here, the technology used by Augmont is such that the buyers and sellers are always matched with Augmont, where AUGMONT becomes a counterparty for all transactions related to buys and related to all the sales. And hence, all the revenues get booked on the AUGMONT balance sheet. What we see our business is that our business is always about the spreads between the buys and the sell, and, also on the capital efficiency as to how long is the capital going to be blocked for. This is that we are able to determine the pricing, on the spot platform.

1:04:10 Secondly, what happens is in the the spot platform, the margins are also determined on the basis of the product mix. As I said, the import of Dorebar, which is an... Which is a backward extreme... Backward integration for the spot platform is through the refining or the recycling of old gold helps in increasing the margins. Okay. Okay. Thank you. That's all from my side. All the best for your future, and happy Diwali. Thank you. That was the last question for today. I now hand the floor back to the management for closing comments. Over to you, sir. Thank you so much, and I just want to wish all of you all a very, very happy Diwali. And, yeah. We can end this call up., please.

1:05:00 Anything which you need, can get in touch with us. Get in touch with us at. I'm from and you can get in touch for any further requirements. Thank you all, and wish you a very happy. Thank you. Thank you, everyone. Thank you, ladies and gentlemen. On behalf of Augmont Enterprises Limited, that concludes today's call. Thank you for joining us, and you may now click on the leave icon to exit the meeting. Goodbye.