D.P. Abhushan Limited Receives Credit Rating Reaffirmation from CARE Ratings
CARE Ratings Limited has reaffirmed D.P. Abhushan Limited's credit ratings for bank facilities totaling ₹339.95 crores, maintaining CARE A- stable rating for long-term facilities and CARE A2+ for short-term facilities. The company demonstrated strong financial performance with 42% year-on-year growth in total operating income to ₹3,312 crores in FY25 and improved PBILDT margin to 5.34%. The ratings reflect the company's experienced promoters, over eight decades of operational track record under 'DP Jewellers' brand, and prudent working capital management, while remaining constrained by gold price volatility and competitive industry dynamics.
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D.P. Abhushan Limited has received credit rating reaffirmation from CARE Ratings Limited for its bank facilities, reflecting the company's strong operational foundation and growth trajectory in the gems and jewellery sector. The rating agency has maintained its assessment of the company's creditworthiness while acknowledging both strengths and challenges in the competitive jewellery retail market.
Credit Rating Details
CARE Ratings Limited has reaffirmed the credit ratings for D.P. Abhushan Limited's bank facilities with the following assessment:
| Facilities/Instruments | Amount (₹ crores) | Rating | Rating Action |
|---|---|---|---|
| Long-term bank facilities | 51.95 (Reduced from 56.06) | CARE A-; Stable | Reaffirmed |
| Long-term/Short-term bank facilities | 288.00 (Enhanced from 158.00) | CARE A-; Stable/CARE A2+ | Reaffirmed |
The total bank facilities under rating amount to ₹339.95 crores, with a significant enhancement in the long-term/short-term facilities from ₹158.00 crores to ₹288.00 crores.
Strong Financial Performance
D.P. Abhushan Limited demonstrated robust financial performance with substantial growth across key metrics. The company reported 42% year-on-year growth in total operating income, increasing to ₹3,312 crores in FY25 from ₹2,340 crores in FY24, driven by strong performance across major stores.
| Financial Metrics | FY24 | FY25 | H1FY26 |
|---|---|---|---|
| Total Operating Income (₹ crores) | 2,339.96 | 3,311.93 | 1,508.02 |
| PBILDT (₹ crores) | 102.53 | 176.77 | 130.01 |
| PAT (₹ crores) | 61.86 | 112.70 | 87.88 |
| Overall Gearing (times) | 0.72 | 0.46 | 0.64 |
| Interest Coverage (times) | 7.38 | 10.37 | 16.67 |
Profit before interest, lease rentals, depreciation and taxation (PBILDT) margin improved to 5.34% in FY25 from 4.38% in FY24, supported by higher spreads and increased contribution from gold-studded jewellery.
Rating Strengths and Operational Excellence
The credit rating reflects several key strengths that support D.P. Abhushan's market position. The company benefits from experienced promoters with over eight decades of operational track record under the 'DP Jewellers' brand, which has built strong brand recall and trust among consumers in Madhya Pradesh and Rajasthan. As of September 30, 2025, the company operates 11 showrooms with a combined retail area of 50,650 square feet.
The company maintains prudent working capital management with an inventory turnover ratio of 5.63x in FY25. D.P. Abhushan manages inventory centrally from its head office in Ratlam and follows an inventory replenishment model for hedging against gold price volatility risk. The company's capital structure remained comfortable with overall gearing improving to 0.46x as of March 31, 2025, compared to 0.72x in the previous year.
Industry Challenges and Risk Factors
Despite strong operational performance, the ratings remain constrained by several industry-specific challenges. The retail gold jewellery industry is highly fragmented with intense competition from organised and unorganised players, limiting pricing flexibility and constraining scope for margin expansion. The company faces exposure to gold price volatility, as gold constitutes over 90-95% of total costs and exhibits sharp volatility influenced by global demand-supply dynamics.
Additionally, the gems and jewellery sector remains susceptible to regulatory risks, being among the most regulated industries as gold constitutes India's second-largest import bill after petroleum. High regulatory intervention by the Government of India has been observed in terms of import tariffs, gold deposit schemes, and mandatory PAN disclosure requirements.
Expansion Plans and Future Outlook
D.P. Abhushan has outlined ambitious expansion plans to strengthen its market presence. The company opened one store in Ratlam in April 2025 and plans to add two more stores in FY26, followed by an additional 14 new stores in the next two years. CARE Ratings expects the company to maintain healthy growth in the medium term, supported by same-store sales growth and incremental revenue from new stores.
The 'Stable' outlook reflects CARE Ratings' expectation that D.P. Abhushan will continue to benefit from experienced promoters, strong operational track record, and brand recall in Madhya Pradesh and Rajasthan jewellery markets, while managing the inherent challenges of the competitive gems and jewellery industry.
Historical Stock Returns for D P Abhushan
| 1 Day | 5 Days | 1 Month | 6 Months | 1 Year | 5 Years |
|---|---|---|---|---|---|
| -4.08% | +0.13% | -1.66% | -1.52% | -5.25% | +1,444.03% |
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