BlueStone shares rally 29% as Q1 EBITDA doubles, store network grows

BlueStone Jewellery shares have climbed 29% over two trading sessions following a first-quarter earnings report that showed significant margin expansion and robust revenue growth. The Indian retailer posted standalone revenue of Rs 733 crore, a 48.8% year-on-year increase, while standalone EBITDA more than doubled to Rs 55 crore.

The bottom-line improvement was driven by a 273-basis-point expansion in EBITDA margins, underscoring the operating leverage emerging from the company's physical rollout. Same-store sales grew 39% year-on-year, indicating that new outlets are complementing rather than cannibalizing existing locations.

These results build on BlueStone's first full year of positive reported profit after tax in fiscal 2026, confirming that the company has transitioned from a pure growth phase to a sustainable profitability trajectory. Management attributed the performance to resilient consumer demand across its various price points.

During the quarter, BlueStone added 12 stores, bringing its total footprint to 352 locations across 139 cities. “We scaled our distribution to 352 stores across 139 cities – with all 5 new cities entered being Tier 2 and Tier 3 regions, consistent with our conviction in these markets. We remain deeply focused on execution to expand consumer wallet share and bring new consumers into our fold,” the company said.

The targeted expansion into smaller cities is a core part of the strategy to capture untapped market share outside of major metropolitan areas. By focusing on Tier 2 and Tier 3 regions, BlueStone is positioning itself in markets with lower penetration of organized, design-led jewellery retail.

Brokerage Systematix maintained its Buy rating on the stock with a target price of Rs 832, implying a 14.4% upside. The firm projects BlueStone will add roughly 75 stores annually to reach 571 outlets by fiscal 2029, noting the plan appears achievable if consumer traction holds.

A critical factor in that valuation is the expected maturation of the store network. Systematix uses an age-cohort framework, anticipating that store productivity improves as locations mature. Stores older than three years made up 27% of the network in fiscal 2025 and 46% in fiscal 2026. This proportion is expected to reach 56% in fiscal 2028 and 60% in fiscal 2029, pushing the average store age from 2.7 years to an estimated four years over that period.