ECONOMIC OVERVIEW
Global Economic Overview
The global growth outlook suggests a decline from about 3.5% in 2022 to
roughly 3.0% in 2023 and 2024, with central bank policy rates impacting economic activity.
Inflation is predicted to decrease from 8.7% in 2022 to 6.8% in 2023 and
5.2% in 2024, while core inflation adjusts gradually.
Recent resolutions of the US debt ceiling and banking stability actions
have reduced immediate financial risks, but downside risks to growth persist. Elevated
inflation and potential shocks like conflict and extreme weather could tighten monetary
policies. Chinas recovery might slow due to real estate issues, impacting other
economies. Upside potential exists if inflation recedes faster, and domestic demand
remains resilient.
Across economies, priorities include sustained disinflation and
financial stability. Central banks should focus and financial oversight. Countries should
provide liquidity for market strains, build fiscal buffers with targeted support, and
enhance economic supply for smoother inflation control.
Outlook
The global economic outlook reflects a slowing recovery from the dual
impacts of the COVID-19 pandemic and
Russias actions in Ukraine. Supply chains have improved, but
challenges like high inflation, tightened central bank policies, and limited credit
availability persist. Q1 2023 showcased resilience in services but manufacturing weakened,
highlighting uncertainties and low productivity growth. Elevated inflation and central
bank responses shape the landscape, with global growth projected to decline from
3.5% in 2022 to 3.0% in 2023 and 2024, led by advanced economies, while
emerging markets maintain stability with regional variations.
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Indian Economic Overview
The Economic Survey of 2022-23 outlines Indias economic outlook,
projecting a GDP growth of 6.0-6.8% for 2023-
24. The economy is set to achieve 7% growth by March 2023 after an 8.7%
increase the previous year. Strong on price stability credit growth for MSMEs and
increased government capital expenditure have been pivotal. While inflation may slightly
exceed targets, housing market inventory improved, and export growth fueled production.
Private consumption rose to 58.4% of GDP, supported by resurging contact-intensive
services. Global trade growth is expected to slow from 3.5% in 2022 to1.0% reflectingglobal
challenges.2023,
Outlook
The Economic Surveys outlook for 2023-24 highlights Indias
rapid post-pandemic recovery, propelled by strong domestic demand and increased capital
investment. The emergence of a new private sector capital formation cycle, combined with
significant government capital expenditure, underscores a positive trend. Structural
reforms like the Goods and Services Tax and the Insolvency and Bankruptcy Code have
enhanced economic efficiency and transparency. Despite global economic slowdown predicted
by IMF and the World
Trade Organisation, Indias growth is poised to be supported.
However, risks such as commodity prices, export growth, and inflation
currency depreciation. The likelihood of sustained higher borrowing costs due to inflation
global growth. Notably, there are bright spots including lower oil prices and improved
current account prospects for India, contributing to overall external stability.
Source: https://pib.gov.in/PressReleasePage.aspx?PRID=1894932
In both 2023 and 2024, Indias projected growth rates (6.1% and
6.3%) are significantly higher than those of advanced economies (1.5% and 1.4%). This
indicates that Indias economy is expected to continue growing at a much faster pace
compared to the more mature economies of advanced nations.
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Industry Overview might contribute to subdued India is the second
largest gold jewellery consumer in the world. In 2021, India bought 611 tonnes of gold
jewellery, second only to China (673 tonnes), but comfortably ahead of all other
gold-consuming markets, according to the ‘Jewellery
Demand and Trade report released by the World Gold Council on
January 19, 2023.
The report further highlighted that gold jewellery exports in
India have grown from US $7.6 billion in 2015 to US $12.4 billion in
2019. However, bridal jewellery dominates the gold jewellery landscape, enjoying 50-55 per
cent of the market share in India.
Plain gold jewellery accounts for 80-85 per cent of the market share,
the majority of which is 22-carat gold, although the market for 18-carat gold jewellery is
also growing. Jewellery used in daily wear accounts for 40-45 per cent of the market, the
report added.
Indias gems and jewellery export sector which is one of the
largest in the world contributed ~27% to global jewellery consumption in 2019. The market
size of the global gems and jewellery sector is likely to expand to US$ 103.06 billion by
2023. Indias gems and jewellery exports are expected to reach US$ 100 billion by
2027. Globally, India was the top exporter of diamonds with a share of 33% in 2021. India
is the second largest gold jewellery consumer in the world and
Indias gold demand will witness a sharp upswing to top 800 tonnes
in 2023.
The Government has undertaken various measures recently to promote
investment and upgrade technology and skills to promote ‘Brand India in the
international market. The Government has permitted 100% FDI in the sector under the
automatic route, wherein the foreign investor or the Indian company do not require any
prior approval from the Reserve Bank or the Government of India. The Indian Government
also signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab
Emirates (UAE) in March 2022, this will allow the Indian Gems and Jewellery industry to
further boost exports. CEPA will provide the industry with duty-free access to the UAE
market. Indias Gems Jewellery Export Promotion Council (GJEPC) aims to triple its
exports to the UAE post the CEPA.
Government Initiatives
India has signed an FTA with the UAE which will further boost exports
and is expected to reach the target of US$ 52 billion. The Government has reduced custom
duty on cut and polished diamond and coloured gemstones from 7.5% to 5% and NIL.
Revised SEZ Act is also expected to boost gems and jewellery exports.
In September 2021, Ms. Anupriya Patel, Minister of
State for Commerce, and Industry said that reforms such as the revamped
gold monetisation scheme, reduction in import duty of gold, hallmarking and others would
help the industry grow. The market export target is US$ 43.75 billion for 2021. The
government has reduced import duty for Gold & Silver (from 12.5% to 7.5%) and Platinum
& Pallidum (from 12.5% to 10%) to bring down the prices of precious metals in the
local market.
Indian Government made hallmarking mandatory for Gold
Jewellery and Artefacts. A period of one year is provided for
implementation i.e., till January 2021. In December 2020, All
India Gem and Jewellery Domestic Council (GJC) welcomed the decision to
make hallmarking compulsory from June 2021 in a phased manner; urged the government to
examine the key concerns of the industry for smooth implementation of the initiative.
Hallmarking of gold jewellery is set to begin on June
15, 2021. In view of the COVID-19 pandemic, the government accepted the
request of stakeholders to provide jewellers some more time to prepare for implementation
and resolve issues. Earlier, the date of implementation was June 01, 2021.
Opportunity and Threats
Opportunity
Gold Opportunity in India: Enhancing Domestic Supply and Export
Potential
Indias gold demand will witness a sharp upswing to top 800 tonnes
in 2023. In the fourth quarter of 2022 demand for gold rose stood at 219.7 tonnes. The FDI
inflows in the gems and jewellery sector increased by 60.78% in FY22 on a year-over year
basis.
The Indian government has introduced a comprehensive Gold
Monetisation Scheme to address the nations heavy reliance on gold
imports to meet domestic demand. The scheme aims to encourage individuals, institutions,
and temples to deposit their idle gold holdings into banks, allowing these resources to be
put to productive use and reducing the need for costly imports.
To further catalyze the growth of the gems and jewellery sector, the
government has allocated land for a jewellery park spanning 25 acres in Navi Mumbai and an
additional 25,000 sq. ft of land in West Bengal. This initiative is poised to foster a
conducive environment for jewellery manufacturing and trade, contributing to economic
growth gems and jewellery sector Recognizingthe in Indias economy, the government
has undertaken key initiatives such as the reduction of custom duties on cut and polished
diamonds and coloured gemstones. The customs duty reduction, from 7.5% to 5% and
ultimately to nil, is aimed at facilitating the growth of this industry and enhancing its
competitive edge on a global scale.
Indias gems and jewellery sector is robustly supported by special
economic zones (SEZs), numbering 10 in total.
These SEZs house over 500 manufacturing units, collectively
contributing a substantial 30% to the countrys total exports.
The recent revision of the SEZ Act is poised to provide a further
impetus to gems and jewellery exports, bolstering economic growth and export revenue.
International trade agreements have also played a pivotal role in
advancing the Indian gems and jewellery sector. The Free Trade Agreement (FTA) signed with
the UAE holds significant reaching an impressive US$ 52 billion. Additionally, the
Economic Cooperation and Trade Agreement (ECTA) inked with Australia
opens avenues for increased cooperation, collaboration, and trade between the two nations.
Threats
The retail jewellery industry requires a lot of operating capital, and
demand for jewellery is gradually expanding beyond only the typical bridal jewellery. The
need for working capital will rise even higher as a result of the increased demand
necessitating additional inventory investment. Additionally, although having greater
margins than gold, diamond jewellery had a considerably longer cash conversion cycle,
which substantially increased the working capital intensity of the jewellery industry.
Company Overview
Radhika Jeweltech Limited (RJL) is a retail jeweller that specialises
in gold and diamond-encrusted jewellery. Radhika
Jewellers, a private company that was established in 1987, was
organised as a public limited company in 2016. RJL does business out of a jewellery shop
in Rajkot, Gujarat. Since the systems inception, the company has only sold jewellery
that has received the BIS Hallmark certification, choosing for this certification instead.
The quality of the jewellery that RJL purchases from reputable producers is continuously
monitored and examined by a team of quality assurance specialists. Over 124 experts work
for the organisation, about 115 of whom are in sales. The bilingual sales crew has
expertise working with clients and is well-versed in gold jewellery.
The company is also on verge of starting its 2nd bigger and for
boosting exports, with a target of sizeable Showroom in a prime location in the city of
Rajkot with a retail space of more than 10,000 square feet. The showroom will offer a
wider range of Jewellery options to the consumers like Gold jewellery, Jadau jewellery and
Diamond jewellery. The store is will offer best-in-class services like a Bridal experience
centre, a Digital design bank, a Jewellery experience centre, a Customer Lounge, Valet
Parking, for the very first time in the city of Rajkot. This store will be the main growth
driver of the company for the next few years
Financial performance
Since the beginning of FY20, the company has experienced a significant
increase in the demand for its products.
| Particulars( Cr) |
FY23 |
FY22 |
Change |
| Revenue From Operations |
312.73 |
232.78 |
34.34% |
| EBITDA |
ratios, along with detailed
year) 42.73 in key 37.19 financial 14.90% |
| Net Profit |
29.69 |
27.06 |
9.72% |
| EPS ( ) |
12.58 |
11.47 |
9.68% |
The Companys revenue from operations increased to
312.73 Cr in FY 2023 compared to 232.78 Cr in FY 2022. The EBITDA has
grown from 37.19 Cr to 42.73 Cr EBITDA in FY2023 is approx. 14% higher than the previous
financial year. Net sales operations in FY2023 have been approx. 34% higher than FY2022.
and PAT numbers are approx. 9% higher than FY 2022 at 29.69 Cr.
In accordance with the SEBI (Listing Obligations and Disclosure
Requirements) (Amendment) Regulations 2018, the Company is required to
providedetailsofsignificant changes (i.e. change of 25% or more as compared to the
immediately previous financial explanations. The following list of important
financialratios:
| Ratio |
As at 31 March, 2023 |
As at 31 March, 2022 |
% Variance |
| Current Ratio (in times) |
7.29 |
8.87 |
(17.76) |
| Debt-Equity Ratio (in times) |
0.16 |
0.12 |
33.23 |
| Debt-Service Coverage Ratio (in times) |
25.73 |
8.55 |
200.90 |
| Return on Equity (in %) |
13.79 |
15.40 |
(10.48) |
| Inventory Turnover Ratio (in %) |
161.77 |
157.34 |
2.82 |
| Trade Receivables Turnover Ratio (in times) |
137.27 |
215.90 |
(36.42) |
| Trade payables turnover ratio (in times) |
55.26 |
209.10 |
(73.57) |
| Net Capital Turnover Ratio (%) |
151.15 |
137.18 |
10.18 |
| Net Profit Ratio (in %) |
9.49 |
11.62 |
(18.33) |
| Return on Capital Employed (in %) |
16.49 |
17.57 |
(6.17) |
| Return on Investment (in %) |
3.63 |
2.33 |
55.86 |
Risks and concerns
Weakened demand and the slowing economy are the industrys main
problems. The opportunity to sell the business over the holiday season has already passed.
The Company continuously assesses its exposure to numerous risks, including
financial,operational, environmental, and regulatory risks. The Company has procedures in
place to ensure compliance with all statutory and regulatory requirements. It periodically
examines these systems, and where necessary, it takes the necessary remedial action. It
has established a clear procedure for maintaining inventory levels while guaranteeing that
customer serviceability and credit risks are assessed before taking on exposures with
clients.
Human Resource
Our people are our most valuable resource as we work to navigate the
difficulties of a dynamic industry and convert them into opportunities for growth.
information andWe offer statements welcoming in workplace that supports their
career and personal growth.
People make the company grow and succeed, therefore as a team,
were committed to come out of the crisis as a stronger, wiser, and more resolute
organisation than ever. The Companys concept about human resources is to create and
nurture a sustainable performance- and competency-driven culture with a greater sense of
accountability and responsibility. As of the 31st of March 2022, the company had
XX employees on its payroll. Given the nature of the activities,
administrative, marketing, skilled, and unskilled workers make up a sizable share of the
total number of employees.and business The Management maintained friendly ties with the
Staff, which led to employee motivation, effectiveness, and productivity. Your management
is pleased to report that there have been no incidents of strikes, lockouts, or other
employee actions that have negatively impacted the operation of the business. It is
interesting that the company does not have an employee union.
Internal control and systems
Your company hires a skilled and knowledgeable team of internal
auditors who regularly recommend strong internal financial controls while also monitoring
controls aid procedures and rules. These internal financial in establishing
safeguards against the application of the internal financial controls, policies, and
processes that the company has implemented to guarantee the orderly and effective
operationofitsbusiness.Internalfinancialcontrols aid in the protection of assets, the
avoidance and detection of frauds and/or errors, and the maintenance of the correctness
and thoroughness of accounting and financial records. The timely creation of transparent,
thorough, and accurate accordance with financial the established accounting rules and
principles is made possible by these controls. Periodically, your companys audit
committee assesses the system of internal financial controls.
Disclosures
All transactions that involve related parties were made in the regular
course of business and routinely reported to the Audit
Committee and the Board of Directors. All business dealings with
connected parties were impartial. The Board is given all transactions
informationpertaining to financial in which Directors may have a financial interest, and
the interested Directors are not involved in the debate or voting on these issues. The
Company has engaged in transactions throughout the year with its promoters, directors, and
management, as well as their subsidiaries and relatives, which could potentially clash
with the interests of the Company as a whole. The notes to account include all information
on transactions covered by related party transactions.
Cautionary statement
Statements in this Annual Report, particularly those in the Management
Discussion and Analysis that describe the goals, forecasts, and expectations of our
Company may be considered "forward-looking statements" under relevant laws and
regulations. Although the expectations are supported by plausible hypotheses, the actual
outcomes may vary.
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