Golden Glow or Fool’s Gold? Analyzing Rajesh Exports in a High-Price Environment.
For Rajesh Exports Ltd (₹179) — the world’s largest gold refiner and jewellery exporter — the answer is more complicated than it looks. While ballooning gold prices boost the optics of its balance sheet, the company’s wafer-thin margins, working-capital demands, and ongoing diversification drive make this rally a double-edged sword.
The Gold Rush: How Price Buoyancy Supercharges Inventory Values:
Rajesh Exports processes an estimated 35% of global gold output, operating at the epicentre of the current rally. With inventories often valued in billions of rupees, even a 1% price uptick can unlock hundreds of crores in mark-to-market gains under IAS-2 valuation norms.
At $4,250/oz — roughly ₹10,000/gram — this means its vast inventory pool suddenly looks richer. Every $100/oz rise in the gold price could add ₹500–1,000 crore in unrealised value to its holdings. That strengthens the company’s collateral base, improves borrowing leverage, and enhances book value.
However, Rajesh’s operating model is largely hedged — built on high-volume, low-margin refining and fabrication rather than speculative gold positions. As a result, while accounting optics improve, actual profit gains are limited. The mark-to-market lift rarely translates into cash.
Still, the Q1 FY26 results underline how powerful the price cycle can be:
- Consolidated revenue: ₹1,31,551 crore, +117.9% YoY
- Net profit: ₹–9.53 crore (a minor quarterly loss after three profitable quarters)
- EPS: ₹0.32, down due to forex swings and export softness
- Market capitalisation: ₹5,251 crore
- Promoter holding: 54.6%; FII stake: 15.19%
With central banks adding 444 metric tons of gold in the first eight months of 2025 and the U.S. dollar down 8%, analysts expect that Q2 may see these paper losses reverse, as revaluation and inventory throughput catch up.
Valcambi Advantage: Refining Strength Amid Volatility:
Rajesh Exports’ Swiss arm, Valcambi SA, remains a crown jewel. The refinery, with capacity exceeding 1,600 tonnes per year, supplies bullion to central banks, sovereign mints, and institutional investors worldwide.
During volatile periods, Valcambi’s volumes often rise — as recycled metal flows increase and institutional clients hedge via physical gold. This refining backbone offers stability even as jewellery exports fluctuate.
Beyond Bling: Rajesh’s Pivot to Batteries and Displays:
Rajesh Exports isn’t betting its future solely on bullion. Since 2022, the group has launched a two-pronged diversification drive through Elest Pvt. Ltd. and ACC Energy Storage Pvt. Ltd., aligning itself with India’s next-generation manufacturing ecosystem.
Battery Manufacturing:
Under the ₹18,100 crore PLI scheme for Advanced Chemistry Cells, Rajesh secured approval for a 5 GWh lithium-ion gigafactory in Karnataka. The project, valued around ₹50,000 crore over seven years, aims to produce high-density cells for EVs and grid storage. Though rollout has slipped past its initial 2024 target, analysts forecast ₹5,000–10,000 crore annual revenue potential by FY2028 if production stabilises.
Electronic Displays:
Through Elest, Rajesh plans a ₹24,000 crore AMOLED display fabrication unit in Telangana under the Semicon India Program. Once operational, the plant could deliver 10–15% EBITDA margins, cutting India’s import dependence on East-Asian display makers.
Both ventures are ambitious and capital-intensive. They could transform Rajesh from a commodity refiner into a diversified industrial enterprise — but execution discipline will be the decisive factor.
Balance-Sheet Pulse: Strengths and Strains:
| Key Metric | Q1 FY26 | YoY Change |
|---|---|---|
| Revenue (₹ Cr) | 1,31,551 | +117.9% |
| Net Profit (₹ Cr) | –9.53 | N/A (loss) |
| Estimated Inventory Revaluation Impact (per $100/oz rise) | ₹500–1,000 Cr | — |
| Market Cap (₹ Cr) | 5,251 | –2.8% |
Rajesh remains light on debt, yet its working-capital intensity is swelling as gold becomes more expensive to hold. Operating cash flow remains thin due to rapid throughput and hedging structures.
Nonetheless, analysts see ROE improving from 1.4% to 5–7% by Q3 FY26 if gold prices average above $4,200/oz and export volumes stabilise.
Verdict: Glittering Prospects — Execution Crucial:
Gold’s unprecedented rally undeniably fortifies Rajesh Exports’ balance sheet, offering valuation uplift and liquidity leverage. But it doesn’t guarantee windfall profits. The company’s fortunes hinge more on operational efficiency than on bullion’s brilliance.
At ₹179, near its 52-week lows, the stock carries speculative upside of 50–100% if:
- Gold sustains above $4,000/oz
- Q2 revaluation erases the Q1 loss
- Diversification projects achieve visible progress
Yet the flip side remains: jewellery demand could stay muted, export margins tight, and diversification timelines stretched.
In essence, Rajesh Exports today sits at the intersection of legacy stability and futuristic ambition. The company’s golden core continues to gleam — but its lasting lustre will depend on how well it converts bullion wealth into battery power and display innovation.
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Meanwhile, MEP Infrastructure Ltd (₹ 2.34) has once again hit a Buyer Freeze, compounding speculation that its previously rumoured ₹ 8,000-crore order book could finally be surfacing.
The stock has surged nearly 44 % over the past 21 sessions, suggesting intense accumulation — though broader structural issues persist. The counter has been locking into buyer freezes non-stop since this blog first revealed details of its rumoured order book value.
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