IGI rallies as Q2 profit jumps 43%, beats estimates

mmological Institute (India) Limited (IGIL) rallied on October 22, the first full session after it reported a 43% year-on-year jump in Q2 FY27 consolidated net profit to ₹185.8 crore. Profit came in well above market estimates of about ₹140 crore, and management called it the best quarter in the company's history. Revenue from operations grew 31% to ₹398 crore, with certification revenue up 32% to ₹387.5 crore. EBITDA rose 39% to ₹244.5 crore, and the EBITDA margin expanded to 61.4% from 58.0% a year ago. Certification volumes rose 26% to 4.35 million reports. This is volume-led growth with operating leverage. Profit grew faster than revenue because more reports flowed through the same lab capacity. Lab-grown diamonds (LGD) are the main engine. LGD loose stone certification grew 37%, LGD jewellery certification grew 47%, and LGD now makes up 54% of total certification revenue. That concentration is also the main risk. More than half of revenue now depends on one segment, so any slowdown in lab-grown diamond demand would hit IGI directly. Margins are already very high at 61.4%, which leaves limited room for further expansion. Sources also differ on whether the average price per report rose or fell this quarter, so it is unclear how much of the growth came from pricing versus volume. Investors should watch lab-grown diamond demand trends, average realised price per report, natural diamond certification volumes, and margin sustainability in coming quarters. The key question is whether IGI can keep growing volumes without depending even more on lab-grown diamonds. Disclosure: I do not hold any position in International Gemmological Institute (India) Limited. This post is for informational purposes only and is not investment advice.