In today’s Finshots, we tell you how BlueStone, a jewellery company that spent 14 years losing money, finally turned a profit.

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Now onto today’s story.

The Story

For 14 years after it was founded in 2011, BlueStone, the omnichannel (both online and offline) jewellery brand, did one thing consistently — lose money.

It raised cash through multiple funding rounds, attracted marquee investors like Ratan Tata at one point, and even secured a pre-IPO investment led by Prosus. Yet every year, the losses kept piling up.

If you read our story on BlueStone’s IPO, you’ll know that in FY24, it lost ₹142 crore. A year later, just before going public, those losses widened further to ₹221 crore. So when BlueStone finally listed in 2025, it did so at a discount, perhaps reflecting investor doubts about a company that had never made an annual profit.

But just a year later, the story looked completely different.

For context, in FY26, BlueStone reported its first-ever annual profit of ₹13 crore on revenue that grew 35% to ₹2,486 crore. And the momentum didn’t stop there. In Q1 FY27 (the quarter ending June 2026), it posted another profit of ₹6 crore, compared to a loss of ₹35 crore in the same quarter last year.

Now that’s a pretty dramatic turnaround. After all, revenue growth alone doesn’t usually wipe out losses of that scale.

So what changed, you ask?

Well, three things.

The first is something called same-store sales growth (SSSG). It measures how much more money stores that have been open for at least a year are making compared to last year, ignoring any new stores the company has opened. And for BlueStone this metric touched 39% in Q1 FY27, up from 34% in the previous quarter and 32% a year ago.

That’s because older stores are usually far more profitable than newer ones. Think about opening a jewellery store. The day you unlock the doors, you’re already paying rent, electricity, salaries and maintenance. Those costs don’t change much whether you sell one necklace or one hundred.

In the first year, sales are often too low to comfortably cover these fixed costs. But over time, as more customers discover the store, sales keep growing while most of those fixed expenses barely move. So every extra rupee of revenue starts contributing much more to profits. And that’s exactly what seems to be happening at BlueStone.

The second reason is that BlueStone sells a lot of studded jewellery with diamonds or gemstones rather than plain gold. That means a big chunk of what customers pay for isn’t just the gold itself, but also the design and craftsmanship. And that’s something BlueStone can charge a healthy premium for because it’s much harder for customers to compare prices across jewellers.

Plain gold jewellery, on the other hand, typically operates on much thinner margins because gold prices are transparent and comparable everywhere. (For gold-heavy jewellers like Kalyan or Senco, gross margins are usually around 15–20%.) As a result, BlueStone’s gross margins improved to 42% in FY26 from 39% a year earlier. So even before you look at the operating profits, every rupee of revenue was simply more profitable than it used to be.

But perhaps the most interesting bit is that a lot of BlueStone’s customers are coming back. That’s unusual in the jewellery business as most people don’t buy jewellery every few months. They usually purchase it for weddings, festivals or other special occasions. Yet BlueStone’s repeat-customer revenue crossed 54% in FY26, up sharply from 44% a year earlier.

And that’s a big deal because winning over a repeat customer is far cheaper than acquiring a new one. You don’t need expensive advertising to convince someone who already trusts your brand.

Besides, it also suggests that BlueStone’s bet on lightweight, everyday jewellery, instead of competing only for wedding purchases, may actually be working.

That said, there’s one more factor that you have to keep in mind. A few months ago, the government increased the import duty on gold from 6% to 15% to discourage imports and reduce the outflow of foreign exchange.

That pushed up domestic gold prices. And because BlueStone was sitting on gold inventory worth about 90% of its annual revenue around the time of its IPO, the value of that inventory also shot up. This meant that around ₹150 crore of FY26 profits and another ₹25 crore in Q1 FY27 came simply from the appreciation in the value of its bullion stock. But had gold prices stayed flat or fallen, those gains wouldn’t have existed.

So yeah, some of the profitability came from favourable market conditions rather than improvements in the underlying business.

But then again, that’s simply the nature of BlueStone’s business and it doesn’t negate the operational progress BlueStone has made. You could look at its cash PAT (profit after tax) to understand this, which jumped to ₹228 crore in FY26 from ₹92 crore the previous year. In Q1 FY27 too, it rose to ₹56 crore compared to just ₹17 crore a year ago.

Put all of this together, and you’ll see that the business itself has become healthier mainly because of scale. And the IPO proceeds may also have helped fund working capital instead of forcing the company to rely as heavily on borrowings.

Of course, the real test still lies ahead. We’ll have to wait and see whether its SSSG continues to hold up, whether the repeat-customer flywheel keeps compounding, and whether its store-level economics eventually catch up with older, more established peers.

BlueStone has finally proved that it can make money. Now it just has to prove that it can keep doing it.

Until next time…

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