Bluestone has delivered a headline turnaround that few consumer companies manage in a single year. Its standalone revenue rose from Rs 1,770 crore in FY25 to Rs 2,441 crore in FY26, a 37.9% jump.

The EBITDA also surged 420% to Rs 394.5 crore. Most strikingly, the company moved from a Cash PAT loss of Rs 82.9 crore to a Cash PAT profit of Rs 228.4 crore.

During the last quarter, Bluestone added 65 stores, crossed 340 outlets across 134 cities, and posted same-store sales growth of 34%. For a company that spent years burning cash to prove omnichannel jewellery retail could work in India, FY26 appears to be an inflection point.

But inside the same investor presentation filed with BSE on April 23 is a table that tells a more complicated story.

Bluestone booked an inventory gain of Rs 150 crore in FY26, which reflects the appreciation in value of its gold stockpile as bullion prices surged roughly 25-30% through the year. Under Indian accounting standards, this gain flows directly through the P&L as a reduction in cost of goods sold, which mechanically inflates EBITDA. If we strip it out, and adjust for IND AS 116 lease accounting, and the Pre-IND AS EBITDA excluding inventory gains drops to Rs 180.6 crore, a 7.4% margin. That is still a sharp improvement over FY25's 1.0%, but a very different number from the 16.2% reported EBITDA margin that headlines the presentation in the report.

Interestingly, the company's inventory has increased sharply, which raises concerns. Its inventory rose by 60.5% from Rs 1,652.5 crore to Rs 2,651.7 crore, while revenue grew at a slower pace of 38%. This also affected efficiency, with inventory turnover dropping from 1.34X to 1.13X. To build this stock, the company spent Rs 999 crore, which kept its operating cash flow negative at Rs 175.3 crore, even though it reported a paper profit.

The management says this increase is due to new stores, new product categories, and more entry-level pricing options, which sounds reasonable. However, such a big gap between inventory growth (60%) and revenue growth (38%) still needs a clearer explanation.

On top of this, ESOP costs rose sharply to Rs 92.7 crore in FY26, up 80.8% from last year. These are real costs because they reduce shareholder value when employees exercise their stock options. The company's explanation makes sense, these costs are higher now because of stock options given before the IPO, and they are expected to drop sharply from Rs 92.7 crore in FY26 to just Rs 4.8 crore by FY30. This means profits will look better in the future even without any major operational change.

However, that benefit is still in the future. For now, in FY26, the ESOP cost is a real expense that impacts the company's profits.

To be fair to Bluestone, some key numbers are strong. Its gross margin improved by 4.7 percentage points to 42.6%, mainly because it sold more studded jewellery, which has better margins since customers pay more for design than just the metal value.

The repeat revenue ratio crossed 54.5% in FY26, up from 44.6% in FY25. In a category where customers are expected to buy infrequently, more than half of revenue coming from returning customers signals that the daily-wear thesis is gaining traction. Average order value also jumped 39% to Rs 6,631.