Business:

The Company is engaged in the retail business of costume and fashion jewellery under the brand name “Gargi” by P. N. Gadgil & Sons” which was launched in 2021 under the artificial jewellery segment. The Company deals in 92.5% certified sterling silver jewellery, brass and copper jewellery, idols and other gift articles.The Company operates through shop-in shop model and has point of sales (POS) counters at 30 showrooms across the states of Maharashtra, Gujarat and Karnataka of P. N. Gadgil & Sons Limited and P. N. Gadgil Art & Culture Foundation pursuant to its agreement with respective companies.

Promoters:

P.N Gadgil & Sons[promoter] is a regional jeweller with almost 200 years of history and an annual turnover of 5500 CR.Gargi is mainly paying rent to the promoters of 3L per store and a 10% commission on sales for using their brand name.

Expansion:

Company has opened 2 new Shop in Shop retail point of Sales at Shoppers Stop (Viviana Mall), Thane and Shoppers Stop (Inorbit Mall), Malad, Mumbai. The Company also has plans to open its standalone retail stores in the FY 2023-24 and expand through franchisees[FOCO MODEL].

Strategic Thinking:

There is a difference between mass and class. Bank deposits are growing by 35%, equity investment is growing by 15%. If Bank deposits are mass, equity investment is a class. So we are in class. Certain people who only know the importance of the brand, importance of the quality, importance of the finishing, they only get attracted to the branded jewellery. And we are thinking about them.

Profitability:

1. Inventory gets sold within 5 to 7 weeks.
2. Targeting PAT margins of 6-9%.[Imo these margins will come after they start deploying franchises{FOCO model} till then they can enjoy 15% PAT margins,till date{march 2} they have not given any franchises.

TAM:

TAM of fashion jewellery is 18000 CR.The main thing in this company is its parent is doing a turnover of 5500 CR with its 30 stores and GARGI is also present in these 30 stores. The amount of operating leverage playing is enormous.Even if the parent is not able to grow, GARGI in my opinion will at least get 5% business from its parent, which is 275 CR.Because of the brand already created by the promoter there is a very little need of marketing. Even if the products of GARGI are priced high compared to the market it will not affect much because an anchor is created by the price of original Gold[only if the customer visits the store to purchase gold ornaments].

Competitive Advantage:

1. Established brand name.
2. Trustworthy brand.
3. Brand known for its services.

Risks:

1.The only risk I can see is, if they are not able to grow by the FOCO model,it will eat up the margins.