BlueStone Jewellery and Lifestyle Ltd. saw its shares jump sharply after reporting its third straight profitable quarter in Q1 FY27. The company’s stock hit the 20% upper circuit at ₹732.45, reaching an eight-month high and taking its market value close to ₹10,000 crore.
The rally came after BlueStone reported a consolidated net profit of ₹6.96 crore for the quarter ended June 30, 2026. This is a big improvement compared to the net loss of about ₹35 crore in the same quarter last year. However, the latest profit was much lower than the ₹32.03 crore profit reported in the previous quarter, showing a decline of more than 78% on a quarter-on-quarter basis.
Even with the lower quarterly profit, investors remained positive because the company continued to report strong revenue growth, better operating margins, and ambitious expansion plans.
Strong Revenue Growth and Store Expansion Boost Performance
BlueStone delivered a strong financial performance in the first quarter. Revenue from operations increased nearly 50% year-on-year to ₹736.85 crore, compared to ₹492.68 crore in the same period last year. Revenue also grew by more than 8% from the previous quarter.
The company’s operating performance improved as well. EBITDA almost doubled to around ₹108 crore, while the EBITDA margin increased to nearly 15%, up from just over 11% a year ago. Better product sales and higher revenue from existing stores helped improve profitability.
A major reason behind this growth was the company’s 39% same-store sales growth (SSSG). This means BlueStone’s existing stores sold much more than they did a year ago, even though gold prices remained high and import duties on gold increased.
BlueStone’s customer base grew by 21% to more than 9.4 lakh customers. Around 60% of the company’s revenue came from repeat customers, helping it maintain higher average order values while reducing customer acquisition costs. During the quarter, the company added around 40,000 new customers.
The company also continued to increase sales of studded jewellery, which made up 57% of total revenue, compared to 55% in the previous quarter. Studded jewellery usually offers better profit margins than plain gold jewellery.
BlueStone continued expanding its retail presence by opening 12 new stores during the quarter. This took its total store count to 352 across 139 cities in India. The company now serves more than 12,600 PIN codes, with nearly half of its stores located in Tier II and Tier III cities.
Looking ahead, BlueStone plans to grow its network to around 705 stores by FY30. Since there are not enough premium shopping malls available, the company plans to open nearly 75% of its future stores on high streets. It also aims to increase its retail workforce from around 2,100 employees to about 4,000.
BlueStone is also moving towards a Company-Owned Company-Operated (COCO) model by slowly reducing its franchise stores. The company believes this strategy will help improve profits over the long term by keeping the full retail margin.
Another advantage for BlueStone is its strong manufacturing network. The company makes most of its jewellery at its own facilities in Mumbai, Jaipur, and Surat. This allows it to launch new products within just a few days while maintaining better control over quality and inventory.
Lab-Grown Diamond Business Offers New Growth Opportunity
BlueStone is also focusing on the fast-growing lab-grown diamond market in India.
The company recently invested ₹25 crore in Ethera, a lab-grown diamond jewellery brand launched in 2024. After the investment, BlueStone now owns around 75.5% of the company.
Ethera currently operates stores in Delhi and Bengaluru and introduces around 200 new jewellery designs every month. As more customers look for affordable and sustainable luxury jewellery, the lab-grown diamond market in India is growing quickly. BlueStone believes this business can become an important part of its future growth.
Along with expanding its product range, the company is also working to improve efficiency and increase its share in India’s organised jewellery market.
High Valuation and Debt Remain Key Concerns
Although BlueStone’s latest results received a positive response from investors, many analysts believe there are still important risks to watch.
One of the biggest concerns is the company’s high valuation. Based on its current earnings, BlueStone’s stock is trading at a much higher valuation than most companies in the jewellery industry. Some analysts believe the current share price already reflects strong future growth, leaving little room for disappointment.
The company also has a high level of debt. Because of this, it spent more than ₹55 crore on finance costs during the quarter, which reduced its overall profit.
Some experts have also raised concerns about the quality of the company’s earnings. A large part of BlueStone’s reported profit came from other income and inventory gains linked to changes in gold prices, instead of only its core business operations.
In the past, the company has also reported weak returns on capital and negative operating cash flow because jewellery businesses require large investments in inventory.
Another point of concern is the company’s promoter shareholding. Promoters own a relatively small stake in BlueStone, and a significant portion of those shares has been pledged to lenders.
Despite these concerns, institutional investors continue to show confidence in the company. Foreign and domestic institutional investors together hold more than two-thirds of BlueStone’s shares.
BlueStone’s latest quarterly results show that the company continues to grow through higher sales, better margins, and an aggressive expansion strategy. However, its high valuation, large debt, and concerns about the quality of earnings mean investors are likely to keep a close watch on whether the company can maintain steady and sustainable profits while carrying out its long-term growth plans.