Can IGI India Sustain Its Growth and Global Leadership...

Synopsis: IGI India leads diamond certification through an asset-light model. Q3CY26 revenue rose 21% YoY to Rs. 304 crore, EBITDA grew 20% to Rs. 176 crore, with 58% margins, while CY26 guidance targets 15% revenue and 20% EBITDA growth driven by lab-grown diamonds.

This company is the world’s largest independent certification and accreditation services provider in the fields of diamond, gemstone and jewellery, and is now in focus for its asset-light model and targeting EBITDA of 20%.

With a market capitalisation of Rs. 14,449 cr, the shares of International Gemmological Institute (India) Ltd are currently trading at Rs. 334 per share, down from its previous close of Rs. 336.20 per share. The stock has declined 44% year-to-date, down 12% over the past six months, and up by 1.5% in the last month.

Q3 Financial Highlights

Quarter-on-Quarter (QoQ) Analysis

Comparing Q3CY26 to Q2CY26, the company showed modest growth across its key financial metrics. Sales increased slightly from Rs. 301 crore to Rs. 304 crore, marking a 1% rise. EBITDA grew from Rs. 174 crore to Rs. 176 crore, a 1% improvement, while net profit rose from Rs. 127 crore to Rs. 130 crore, an increase of approximately 2%. Earnings per share (EPS) also increased from Rs. 2.93 to Rs. 3.00, reflecting steady quarter-to-quarter performance.

Year-on-Year (YoY) Analysis

On a yearly basis, Q3CY26 saw significant growth compared to Q3FY25. Sales jumped from Rs. 250 crore to Rs. 304 crore, up 21%. Operating profit margin rose by 58% and EBITDA rose from Rs. 147 crore to Rs. 176 crore, a 20% increase, while net profit expanded from Rs. 110 crore to Rs. 130 crore, up 18%. EPS improved from Rs. 2.76 to Rs. 3.00, reflecting a 9% growth, highlighting the company’s strong operational and profitability gains over the year.

Shareholding Pattern

As of 30th September 2025, IGI India’s shareholding is predominantly held by its promoter, Blackstone, which owns 76.55% of the company. Foreign Institutional Investors (FIIs) hold 10.55%, while Domestic Institutional Investors (DIIs), including banks, mutual funds, AIFs, and insurance companies, account for 5.15%, with ICICI Prudential Asset Management holding 1.65% individually.

The remaining 7.75% of shares are held by the public. Among notable FPI/FII investors, the Government of Singapore holds 1.97% and the Abu Dhabi Investment Authority – Monsoon holds 1.33%, reflecting a strong institutional presence alongside promoter control.

Guidance and Outlook

IGI India has reaffirmed its (CY25) guidance, targeting over 15% revenue growth and around 20% EBITDA growth, with management expressing confidence in achieving or even slightly surpassing these targets.

Looking at the medium term, the adoption of lab-grown diamonds (LGDs) is seen as a key structural growth driver, with management noting that this segment is still in its early stages and that the company plans to benefit from the industry’s expansion over the next three to four years. Additionally, pricing stability is expected to continue, and the competitive landscape remains favourable, allowing IGI India to gain market share in natural diamond certification.

Diamonds and gemstones, unlike gold and silver, are luxury items primarily used by a select group of people, such as celebrities, sports stars, and high-net-worth individuals, often as a display of wealth and status.

While the overall diamond market is smaller compared to gold and silver, this niche appeal creates a specialised demand for quality and authenticity. In this context, IGI India holds a unique position as the leading and essentially the only independent certification authority for diamonds and gemstones in the country.

This exclusivity gives it significant opportunities to expand and consolidate its market leadership, as the growing luxury segment increasingly relies on trusted certification to ensure the authenticity and value of its high-end jewellery.

The IGI laboratory-grown diamond jewellery identifies all mounted gemstones along with precious metal content and purity stamps, if available. For centre stones, it provides shape, cutting style, measurements, and full 4Cs grading, subject to mounting limitations. The report uses a standardised grading scale covering colour (D–Z and Fancy) and clarity (IF to I1–I3), and is issued with a distinctive yellow cover.

Asset Light Business Model

IGI India operates on an asset-light business model, which means it generates revenue and profits without owning significant physical assets like mines, factories, or large inventories. The company’s primary value lies in its expertise, credibility, and technology-driven services in diamond and gemstone certification. This model allows IGI India to focus on skilled gemologists, lab infrastructure, and intellectual property rather than capital-intensive operations.

The advantages are clear, like lower capital expenditure, higher operating margins, scalability, and flexibility to adapt to emerging trends such as lab-grown diamonds. By leveraging knowledge and trust over physical assets, IGI India can expand both domestically and internationally while maintaining a cost-efficient structure.

Gold and Silver Demand as a Risk Compared to Diamond

While gold and silver are driven largely by investment demand and macroeconomic factors like inflation and interest rates, diamonds and gemstones cater to a niche luxury market focused on status, fashion, and gifting. As a result, the demand for certified diamonds is less directly impacted by fluctuations in gold and silver markets.

However, a slowdown in overall luxury spending or economic uncertainty could indirectly affect discretionary purchases of diamonds. IGI India mitigates this risk through its exclusive position as a leading certification authority and its focus on lab-grown diamonds, which attract a growing consumer base independent of precious metal trends. Overall, while gold and silver market dynamics may influence broader consumer sentiment, they do not pose a major direct risk to IGI India’s core business.

In conclusion, IGI India appears well-positioned to sustain its growth and leadership, supported by its asset-light model, strong margins, dominant certification franchise, and rising demand for lab-grown diamonds. However, its ability to maintain this trajectory will depend on the pace of global luxury demand, continued acceptance of lab-grown diamonds, and competitive dynamics.

About the company

International Gemmological Institute (India) Ltd (IGI India) is a prominent gemstone and jewellery certification company in India, operating as part of the global IGI network founded in Belgium in 1975. IGI India provides independent grading and certification for natural and laboratory-grown diamonds, colored gemstones, and studded jewellery, assessing attributes such as cut, colour, clarity, and carat weight, as well as authenticity and quality.

The institute also offers gemology education and training to develop professional expertise in the jewellery industry. Today, IGI India is a major player in the Indian certification market, recognised as the largest independent certifying authority in the country.

The company demonstrates strong financial efficiency and stability, with a Return on Capital Employed (ROCE) of 68.0% and a Return on Equity (ROE) of 54.4%. Its financial leverage is low, reflected by a debt-to-equity ratio of just 0.11.

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