International Gemological Institute Limited (IGIL) Q2 FY27 Earnings Call: Raises FY27 Guidance on 27% H1 Growth, Lab-Grown Jewelry Certification Jumps 47%

International Gemological Institute Limited held its Q2 FY27 earnings call on October 21, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Record Quarter Across Volumes, Revenue, EBITDA and PAT

• Best quarter in IGI's history — Q2 FY 2026-2027 set all-time highs in volumes, revenue, EBITDA and PAT; revenue from operations rose +31% YoY to Rs.3,980mn, with certification revenue of Rs.3,875mn (+32%).
• EBITDA of Rs.2,445mn (+39% YoY) at a 61.4% margin (+340 bps); PAT of Rs.1,858mn (+43%) at a 46.7% margin (+400 bps). Sequentially, revenue grew ~ +8% QoQ and EBITDA ~ +9% QoQ.
• H1 FY 2026-2027 consolidated — revenue Rs.7,688mn (+27% YoY) on 22% volume growth; EBITDA Rs.4,683mn (+34%) at 60.9% (+310 bps); PAT Rs.3,516mn (+37%) at 45.7% (+330 bps).
• ASP of Rs.891 (+4% YoY) — ~2 pp from IGL consolidation, balance +2% base growth on higher LGD loose-stone mix; subsidiaries grew 49% (31% like-to-like ex-IGL consolidation).
• India standalone — certification revenue Rs.3,040mn (+28%) on 19% volume growth; EBITDA margin fell 340 bps to 69.5% on investments in employee leadership, marketing and commission expenses.
• Balance sheet — cash & bank of Rs.1,074mn; H1 FY 2026-2027 operating cash flow of Rs.4,157mn (89% of EBITDA, 118% of PAT), aided by ~ Rs.662mn working-capital release as receivables fell from ~Rs.2,885mn to Rs.2,402mn.

Lab-Grown Leads; Natural Grows Despite a Flat Market

• LGD loose certification +37% YoY and LGD jewelry +47% YoY in Q2 FY 2026-2027; consolidated LGD revenue of Rs.2,211mn was broadly flat vs Rs.2,095mn in Q1 FY 2026-2027. CFO does not anticipate any slowdown in lab-grown in Q3-Q4 FY 2026-2027, citing grower-end capacity addition.
• Natural diamond business grew +8% YoY in Q2 FY 2026-2027 (+5% sequentially; +7% in H1 FY 2026-2027) after a slow start to the year; management expects momentum to continue into Q3-Q4 FY 2026-2027.
• Gemstones & other certification +331% YoY in Q2 FY 2026-2027; IGIL (part of the group since Jan 2026) added ~3 pp to certification growth (base business +29%).
• Industry supply context — large Indian lab-grown growers are adding reactors and doubling capacity in three years; management noted supply is at its base, not peak.
• Demand broadening — in the US, >50% of all bridals are now lab-grown; markets are opening in Europe, Latin America and Australia beyond historically US-centric demand. Certification cost is 2-3% of retail price, which management believes keeps certification demand intact even as wholesale LGD prices have settled in the 180-120 range over the last couple of years.
• Festive timing shift — Diwali falls on 8 Nov 2026 vs 20 Oct 2025, moving festive stocking from Sep 2025 into Oct 2026; initial Oct 2026 festive trends show good traction.
• Watch item: high and volatile gold prices made natural diamond jewelry buyers decide slower — natural jewelry certification grew only +3% YoY in Q2 FY 2026-2027; lab-grown saw no such hesitation.

FY 2026-2027 Guidance Raised on H1 Outperformance

• Original May 2026 guidance — 15% revenue growth and 20% EBITDA growth for FY 2026-2027; H1 FY 2026-2027 delivered +27% revenue and +34% EBITDA, running at ~1.5x and ~2x the guided pace respectively.
• Guidance raised — management expects to keep outperforming for full FY 2026-2027 in line with H1 delivery, citing industry tailwinds, execution strength and operating leverage; no specific revised numeric growth figure was provided, and the analyst's proposed 25% ±2% revenue growth was not confirmed.
• H2 FY 2026-2027 floor — CFO confirmed H2 growth will be higher than 15% revenue growth and 10-20% EBITDA growth, with "rock-solid" October (Q3 FY 2026-2027) performance cited.
• Longer horizon — on FY30, the CFO declined to give specific guidance, stating the outlook will be "same, in line with what we delivered in H1 FY 2026-2027."
• Unanswered questions — queries on India investment payback and on LGD demand from chain stores vs. individual jewelry stores were cut off due to time constraints.

Operating Leverage Intact; India-West Viewed as One System

• EBITDA margin trajectory — 60.1% in FY 2025-2026, 60.4% in Q1 FY 2026-2027, 61.4% in Q2 FY 2026-2027; management expects the operating-leverage trend (EBITDA growth faster than revenue growth) to continue (period unspecified); no steady-state margin guidance given.
• India margin drag — India standalone EBITDA margin fell to 69.2% in H1 FY 2026-2027 (vs 72.9%), which the CFO attributed to deliberate investments in people and marketing; an analyst question on when India investment results would materialize went unanswered.
• Integrated system framing — management declined to quantify the India vs. international margin differential, urging analysts to view India and international numbers in totality: demand originates from Western markets while the lab-grown ecosystem and grading process rest in India.
• Capital allocation — priorities unchanged: growth capex first (recent Italy entry; Saudi Arabia being prepared), then M&A, then dividends; first interim dividend of Rs.2.55/share declared August 2026, paid September 2026; board reviews surplus-cash returns with each set of results.
• Network expansion — operations started in Italy in FY 2026-2027; a Botswana company was set up in Sep 2026; overseas laboratories' certification revenue +31% YoY in Q2 FY 2026-2027 (ex-IGIL), increasingly profitable. CEO plans to extend services to other parts of the globe leveraging color-stone expertise, with no specific territories or timeline disclosed.

Defending 4Cs vs GIA; Data Scale as an AI Moat

• GIA's move (industry context) — GIA has moved away from traditional 4Cs reporting for lab-grown diamonds toward a simplified premium/standard classification; CFO Ishwar Iyer defended the 4Cs framework, noting it has been prevalent for the last 70-80 years and is "not going to go away at all"; management sees no traction toward simplified classification.
• Grading consistency — responding to trade feedback on inconsistency, the CFO said of the 4Cs only carat weight is objective, with multiple pairs of eyes and layered internal checks built over the last 50 years; management remains "extremely confident" on consistency. CEO Tahmasp Printer said IGI is the only laboratory ISO-certified for the last 18 years and is also RJC-certified worldwide; on a perceived gap vs GIA and Belgium-based HRD, he said "there is no gap."
• Certificate-printing denial — management specifically refuted that certificate-printing rights were given to the top 5 LGD manufacturers in Surat ("we haven't given any rights to anybody to print our certificates").
• AI/ML deployment — AI-based work allocation and scheduling are now live in laboratories — same teams grading more stones, faster, with grading standards unchanged; management is working on further AI introduction to improve productivity and turnaround times, with no specific timeline given.
• Data edge — IGI issued ~4-4.5 million certificates in Q2 FY 2026-2027; the CFO said the lab-captured image dataset underpinning machine learning "sits not with everybody across the globe," positioning IGI uniquely for AI adoption.
• Entry barriers — on the risk of a low-cost new entrant, the CFO cited first-mover advantage (first to certify lab-grown diamonds, in 2002) and trust from a brand established over 50 years.

Government Endorsement of Lab-Grown; B2B2C Build-Out

• Government push for the LGD chain — Union Home Minister Shri Amit Shah, at a September 2026 event in Bombay, asked the industry to keep the entire lab-grown diamond chain in Indian hands — "from machines to showrooms" — and said the lab-grown market could grow many times over its current size; IGI welcomed this, positioning itself as the independent global standard.
• LGD stance — the CEO said IGI is the only laboratory in the world to acknowledge LGD as a diamond ("both are diamonds"), and as a third-party independent certification body is committed to certifying all gemstones and diamonds with origin and the 4Cs — a 100-year-old certification criteria.
• Brand build-out — B2B2C marketing began in Q1 FY 2026-2027 (IPL partnership) and expanded in Q2; brand research volume +66% since Mar 2026, ~20mn unique audience reached per quarter, 150mn+ campaign views YTD FY 2026-2027; joint festive campaigns launched in West Bengal (natural jewelry) and NCR (consortium with lab-grown jewelers).
• IGIL gemstones — color-stone capabilities are being built in other IGI laboratories using IGIL methods, with services already offered to jewelry clients and dedicated setups for large customers under way; IGIL is ready for a growth charter and expansion into key gemstone markets.