Asian Star Company Ltd Management Discussions

ECONOMIC OVERVIEW

Global Economy

FY 2024-25 unfolded against a backdrop of moderated global economic momentum. Major economies navigated a period of recalibration, shaped by persistent inflation, evolving geopolitical tensions and cautious consumer sentiment. According to the World Bank, global GDP growth slowed to 2.3%, its weakest pace in recent years outside of recession periods. Forecasts by the IMF offered a slightly more tempered outlook at 2.8%, suggesting that global expansion continued, albeit at a slower and more deliberate pace. Central banks in most advanced economies maintained tight monetary policies, keeping inflation under closer control. Headline inflation eased as commodity prices moderated, yet policy rates remained elevated, contributing to restrained borrowing costs and tempered consumer spending. Despite this, employment levels and services demand held up reasonably well, supporting underlying economic stability. In the United States, GDP grew by 2.2%, with household spending showing resilience amid tighter financial conditions. The Eurozone posted modest growth, as normalising energy prices and recovering supply chains supported broader recovery. China expanded at 4.5%, aided by domestic policy measures, though its pace remained below historical averages due to structural challenges and softened external demand. In contrast, India continued to outperform most major economies, registering a growth rate of 6.5% in FY 2024-25. The momentum was supported by robust domestic consumption, ongoing infrastructure development and a growing digital and manufacturing base. As a result, India remained a key contributor to global growth and regional trade flows. Geopolitical developments, including new trade barriers and tariff adjustments, added an element of uncertainty to global commerce. However, businesses across sectors responded with increased agility, reconfiguring sourcing, production and distribution frameworks to sustain operations and supply continuity. Overall, the year reflected a phase of economic adjustment, marked not by contraction, but by a shift towards greater discipline, policy recalibration and strategic pacing. With inflation trending lower and macro policies becoming clearer, the global economy enters the new fiscal year with a cautiously improving outlook.

Indian Economy

India remained the fastest growing major economy during FY 2024-25, recording a GDP growth of 6.5%, supported by resilient domestic demand, policy-driven capital expenditure and sustained strength in manufacturing and services. For Indian manufacturers, this environment provided a relatively stable backdrop to navigate a period of global uncertainty. Inflationary pressures eased during the year, with headline inflation staying broadly within the Reserve Bank of Indias tolerance range. The central bank maintained a steady policy stance, enabling cost predictability and supporting business planning. Input cost pressures softened in the latter half of the year, aided by moderation in commodity and fuel prices. The governments continued focus on infrastructure development and production- linked incentives (PLI) had a constructive impact on the manufacturing ecosystem. Strategic initiatives such as PM Gati Shakti, the National Logistics Policy, and digital governance reforms improved connectivity and operational efficiency across supply chains. Private capital formation saw an encouraging uptick, reflecting improved business confidence. Credit availability remained supportive, and financial sector health was stable, providing manufacturers with an environment conducive to expansion and long-term planning. On the external front, while global trade remained cautious, Indias services exports stayed strong and merchandise exports held their ground amidst volatility. The Indian rupee remained relatively stable against global currencies, and foreign exchange reserves provided a buffer against external headwinds. For export focused manufacturers, Indias expanding trade agreements, including the India-UAE CEPA and ongoing discussions with the UK and EU, represent continued opportunities to enhance access to global markets. Looking ahead, the IMF projects Indias real GDP growth at 6.2% for FY 2025-26. This outlook reflects a balance of ongoing domestic strength, spanning consumer demand, infrastructure investment, and policy reforms, against potential external headwinds such as trade tensions and global economic uncertainty. India enters the new fiscal year with a strong foundation. For the manufacturing sector, this presents an opportunity to consolidate gains, deepen efficiencies, and remain competitive in a changing global trade landscape.

INDUSTRY OVERVIEW

Global Gems and Jewellery Industry

FY 2024-25 was a year of recalibration for the global gems and jewellery industry, as the sector continued to navigate a challenging macroeconomic environment marked by slower GDP growth, tighter financial conditions, and evolving consumer preferences. Despite these headwinds, the industry demonstrated resilience, with several key shifts shaping its current trajectory and long-term outlook.

Global consumer demand remained uneven across markets. The United States, the largest market for natural diamond jewellery, faced moderate economic deceleration, but still accounted for approximately 45% of global diamond jewellery consumption. The bridal and high-jewellery segments retained strength, buoyed by affluent consumers who continued to prioritise meaningful purchases. Meanwhile, Chinas post-COVID recovery remained tepid, with consumption still lagging pre-pandemic levels, particularly in luxury discretionary categories. India, by contrast, emerged as a standout market, supported by robust domestic consumption, cultural affinity for jewellery and an expanding middle class. Markets in the Middle East and Southeast Asia also displayed healthy momentum, driven by tourism revival, higher disposable incomes, and pro-business policies.

From a product perspective, gold retained its position as the dominant material in global jewellery demand, reflecting its dual role as both adornment and investment. According to the World Gold Council, global gold jewellery demand stood at 2,092 tonnes in 2024, up 3% year-on-year, with India and China accounting for over 50% of this demand. Platinum jewellery demand also gained traction in select markets, particularly China and the US, as consumers sought differentiated offerings. In the diamond segment, demand for natural diamonds remained polarised. Rare stones and bespoke high-value pieces continued to perform well, while demand for smaller goods experienced softness due to price pressures and changing purchasing habits. However, the emotional and symbolic value associated with natural diamonds sustained their desirability, especially in milestone purchases.

The global gems and jewellery industry continued to operate in a cautious environment in FY 2024 to 2025. While estimates of market size vary by scope, credible industry coverage points to steady, low to mid single digit growth over the medium term. GJEPCs Solitaire, summarising leading trackers including McKinsey, indicates jewellery demand is expected to expand by about 4 to 6 percent annually through the mid decade, supported by urbanisation, rising female workforce participation in emerging markets, and wider omni channel adoption. Technological advances, from virtual try ons to AI assisted design and inventory planning, are also reshaping consumer experience and improving efficiency across the value chain.

Sustainability and traceability continued to gain prominence during the year. Consumers, particularly in Western markets, demanded greater transparency into the origin of their jewellery, prompting the adoption of certification programs and digital provenance tools across the supply chain. Regulatory frameworks, such as the G7s new import restrictions on diamonds of Russian origin, redefined trade flows and encouraged sourcing from compliant jurisdictions. As a result, trade hubs such as Dubai, Antwerp, and Surat witnessed shifts in trading dynamics, with India further cementing its role as a global processing and export hub.

In parallel, the rise of personalised and occasion-based purchases influenced design trends globally. Consumers gravitated towards jewellery that reflected individual identity, emotional resonance, or artisanal value. High-end brands capitalised on this by offering customisation services, while regional players focused on local craftsmanship and cultural motifs to deepen consumer connection. Social media and digital storytelling played a critical role in this evolution, amplifying brand narratives and widening access to new audiences.

As the industry enters a new phase of transformation, its ability to align with changing consumer expectations, navigate regulatory shifts and build digital competence will define future competitiveness. Brands and manufacturers that balance tradition with innovation, and ethics with excellence, are poised to lead. While FY 2024-25 reflected cautious sentiment, the outlook ahead remains promising, anchored in a broadening consumer base, renewed design relevance, and sustained cultural and emotional significance of jewellery

Indian Gems and Jewellery Industry

The indian gems and jewellery industry navigated a notably difficult FY 2024-25, shaped by a convergence of external shocks and internal realignments . Exports of cut and polished diamonds declined to USD 13.3 billion (-16.8% YoY), while gold jewellery exports were broadly stable for the year in aggregate, with growth in studded pieces offset by weaker plain gold shipments.

Global demand, particularly from the US and China, was subdued for most of the year, influenced by persistent inflationary pressures, restrained consumer sentiment and an industry-wide price correction in polished diamonds. Compounding this was the overhang of excess inventories carried over from the previous fiscal, leading to prolonged destocking and deferral of fresh orders. Yet, amid these headwinds, Indias competitive positioning remained structurally strong. The industry continued to account for nearly 75-80% of the worlds cut and polished diamonds by volume, and its jewellery exports, held on to meaningful share in key markets like the UAE, Hong Kong, and the United States. More importantly, the year underscored the industrys capacity to adapt: exporters increasingly pivoted towards value-added services, smaller parcel sizes, and differentiated product strategies to align with evolving buyer expectations.

Indias strength lies not only in its scale but also in its ecosystems agility. Manufacturing hubs such as Surat, Jaipur, and Mumbai demonstrated operational resilience, while strategic investments in traceability, digital integration, and design R&D positioned Indian firms to meet rising expectations around transparency and responsiveness. The year also witnessed a moderate broadening of Indias export footprint. While traditional markets remained subdued, early traction was visible in emerging geographies across Africa, Southeast Asia and parts of Eastern Europe. These developments point toward a slow but strategic diversification of Indias trade dependencies.

Looking ahead, the gems and jewellery industry in India stands at an inflection point. Global consumers are increasingly valueconscious, demanding authenticity, design innovation, and ethical sourcing. Indias long-term competitiveness will depend on how effectively it embraces these shifts, through compliance with traceability norms, leaner inventory models, and tighter integration with retail-facing partners worldwide.

In essence, while FY 2024-25 marked a year of contraction, it also reaffirmed Indias centrality in the global gem and jewellery value chain.

Cut and Polished Diamonds

Indias diamond industry, a cornerstone of the countrys gems and jewellery exports, faced notable headwinds in FY 2024-25. A confluence of global challenges, including restrained demand in key consumer markets, inventory overhangs, and sustained price corrections, impacted the performance of the sector throughout the year.

Exports of cut and polished diamonds from India declined sharply to USD 13.29 billion, down from USD 15.97 billion in FY 2023-24, marking a 16.7% year-on-year fall in value. This contraction brought the segments export earnings to their lowest levels in nearly two decades. While the overall volume of stones processed remained high, softening realisations per carat, persistent unsold stock at distributor levels, and tighter purchasing cycles, particularly from the United States and China, led to a reduced trade turnover.

Key markets such as the United States, which remains Indias largest destination for polished diamonds, witnessed softer traction due to elevated interest rates, inflation fatigue, and a pivot towards value purchases. China, once expected to offer a post-pandemic demand resurgence, continued to underperform due to broader economic concerns and shifting consumption patterns.

The Middle East remained relatively resilient, with markets such as the UAE and Saudi Arabia benefiting from sustained tourism-led retail sales and regional wealth, which supported demand for smaller and mid-sized polished goods. Europe remained subdued amid broader macroeconomic challenges, while Southeast Asia displayed mixed signals, buoyed by select demand in Singapore and Malaysia, yet tempered in markets like Thailand and Indonesia.

The year also witnessed significant price corrections across most categories of polished diamonds, leading to recalibrated pricing models across global markets. Indian manufacturers responded to these dynamics with operational prudence. Many adopted a cautious approach to rough diamond procurement, especially in the face of price stickiness in the rough market, which did not fully mirror the decline seen in polished segments. As a result, rough imports were strategically reduced, inventory controls tightened, and working capital cycles were actively managed. Several players also turned to digital manufacturing technologies, including AI-enabled planning and advanced grading systems, to improve yield and reduce cost pressures.

Amid these pressures, India continued to retain its dominant role in the global diamond pipeline, with nearly 90% of the worlds polished diamonds passing through its manufacturing ecosystem, supported by deep expertise, a skilled workforce, and world-class infrastructure, positioning India to remain indispensable to the global diamond supply chain.

Jewellery

The global jewellery industry navigated a complex landscape in FY 2024-25, marked by cautious consumer sentiment, evolving market dynamics, and notable regional divergences. Despite macroeconomic headwinds, the market demonstrated underlying resilience, underscored by stable long-term fundamentals and selective areas of growth. The global jewellery market was valued at USD 232.94 billion in 2024 and is projected to grow to USD 242.79 billion in 2025, with a forecasted CAGR of 5.1% through 2032. This growth trajectory is expected to be supported by rising demand from emerging markets, sustained premiumisation at the top end, and the expanding footprint of Omni channel retail strategies.

India remained a pivotal player within the global ecosystem. Despite a challenging year, it was the largest consumer of gold jewellery in 2024, surpassing China. Jewellery exports from India held broadly stable during FY 2024-25, with growth in studded gold jewellery balancing softer demand for plain gold pieces. The overall moderation reflected subdued global retail demand, price volatility in key inputs, and inventory adjustments across the supply chain. Even so, Indias structural advantages in scale, craftsmanship, and supply- chain depth ensured its continued strength as a leading hub for jewellery exports.

Gold jewellery, which accounts for a major share of global demand, remained relatively steady. While overall consumption volumes dipped marginally, strong cultural affinity in India and the Middle East sustained core demand. In contrast, platinum jewellery continued to gain traction, especially in China and select Western markets, supported by its affordability relative to gold and a growing preference for modern, minimalist designs. Silver jewellery demand remained stable, with global interest supported by both affordability and fashion-forward styles, especially among younger demographics.

Consumer preferences remained polarised. The premium segment, comprising high-jewellery and bespoke creations, remained resilient, backed by high-net-worth clientele and experiential retailing. At the other end, value focused consumers gravitated toward lightweight, wearable designs that emphasised daily utility and personal meaning. Emerging demand patterns reflected increased interest in gender neutral pieces, stackable jewellery, and customisable elements. Personalisation, story driven purchases and ethical sourcing continued to influence buying decisions, particularly in developed markets.

Key global regions displayed contrasting performance. The United States, while experiencing deceleration, remained the largest jewellery market globally, aided by high luxury penetration and a mature retail environment. China, still adjusting to post-COVID recovery, faced subdued consumer spending. The Middle East, particularly the UAE and Saudi Arabia, showed comparative strength, benefiting from luxury tourism and rising discretionary spends. Southeast Asia remained a fragmented but promising growth cluster, with increasing interest in both traditional and contemporary jewellery styles. In Europe, inflationary pressures and geopolitical uncertainty dampened high street retail activity, though luxury markets held steady in select economies.

From a trade perspective, price volatility across key precious metals influenced restocking behaviour and inventory cycles. Gold prices averaged around USD 3,000 per ounce in FY 2024-25, maintaining an upward trajectory supported by safe haven demand. Platinum, priced lower, gained share in fashion and mens segments. Meanwhile, high quality craftsmanship and brand assurance became differentiators as buyers grew more selective.

Indias manufacturing prowess continued to play a crucial role in the global jewellery supply chain. Supported by infrastructure, skilled labour, and government-led initiatives such as the PLI Scheme and Bharat Ratnam Mega CFC, Indian exporters focused on product innovation and improving turnaround times. At the same time, global peers increasingly invested in digitisation, customer engagement platforms, and ESG compliance to stay relevant in a discerning market.

Looking ahead, the global jewellery industry is expected to regain momentum in FY 2025-26. Rebound in discretionary spending, deepening digital adoption and growing affluence in emerging economies are expected to drive demand. For India and its jewellery exporters, maintaining design agility, improving traceability, and aligning with shifting lifestyle aspirations will remain essential to sustaining competitiveness on the global stage.

OUTLOOK

As we step into FY 2025-26, the path ahead for the gems and jewellery industry will continue to reflect a balance of cautious optimism and evolving complexity. While FY 2024-25 presented a year of contraction and recalibration, it also laid the groundwork for a more responsive and forward-looking sector, one that is realigning itself to global macroeconomic realities, shifting consumer preferences, and emerging trade dynamics.

Several global markets are expected to regain momentum. The United States, despite subdued demand in recent quarters, remains a vital market for both fine and fashion jewellery, backed by luxury resilience and gradual improvement in retail spending. The prospect of new US tariffs warrants close attention as this could impact landed costs and trade flows in the coming months. In China, while structural headwinds remain, early signs of recovery suggest that the latter half of the year may see a return to more stable consumption patterns. The Middle East continues to outperform relative to other regions, with countries like the UAE and Saudi Arabia benefiting from higher tourism, rising affluence, and strong local appetite for gold and diamond jewellery.

Emerging regions such as Southeast Asia and select parts of Africa are fast becoming integral to the industrys growth trajectory. A young, digitally connected consumer base, rising incomes, and increasing exposure to global jewellery trends are shaping new demand

curves in these markets. Simultaneously, Europe and Japan are expected to remain steady, though more value-conscious, driven by legacy brands and a maturing luxury audience. India is poised to play an increasingly pivotal role across both manufacturing and consumption. With strong cultural demand, expanding digital access, and deep-rooted craftsmanship, India is well-positioned to meet the needs of a more diverse and discerning global clientele. Its jewellery exports are expected to stabilise and grow gradually as inventory cycles balance out and international retail recovers.

Looking forward, demand is expected to be anchored by a combination of emotional value, aesthetic appeal, and ethical considerations. Consumers are gravitating towards versatile, story-driven pieces, products that combine individuality with value. At the same time, demand in high jewellery, platinum-led contemporary designs, and everyday lightweight wear is likely to continue evolving, requiring agile product development and market alignment.

The coming year will test the industrys ability to remain cost-efficient, responsive to local nuances, and consistent in product excellence. For manufacturers and retailers alike, success will lie in balancing operational discipline with creative differentiation. With foundations reset and the industry more attuned to volatility, the global jewellery sector moves forward not in haste, but with intention, embracing complexity, anticipating change, and adapting with purpose.

Company Overview

Established in 1971, Asian Star Company Limited stands as a trusted name in the global diamond and jewellery industry. With a legacy spanning over five decades, the company has built its reputation on precision craftsmanship, ethical sourcing, and long-term partnerships. Operating with a vertically integrated business model, Asian Star manages the entire value chain, from the procurement of rough diamonds to in-house cutting and polishing, fine jewellery manufacturing, global distribution, and retail.

Headquartered in Mumbai, the companys global presence extends across major trade and consumption hubs, including New York, Chicago, Antwerp, Dubai, Shanghai, Hong Kong, Bangkok, and Singapore, in addition to key domestic centres such as Surat, Ahmedabad, Hosur and Chennai. This footprint supports operational agility and ensures proximity to both supply and demand, strengthening Asian Stars role as a global connector in the diamond pipeline.

Asian Star sources its rough supply directly from leading miners worldwide and is a recognised manufacturer for several global jewellery brands. Its production processes are supported by a skilled design and manufacturing ecosystem, backed by a robust infrastructure. The company adheres to the highest standards of quality, governance and sustainability, demonstrated through certifications such as ISO 9001:2015 by TUV NORD and compliance with the Responsible Jewellery Councils Code of Practices. These practices reflect its commitment to pipeline integrity and responsible business conduct across all levels of operations.

Manufacturing Facility for Polished Diamond

At the heart of Asian Stars manufacturing capabilities lies its Surat facility, spanning 100,000 square feet and employing over 1,000 skilled artisans. Specializing in diamond cutting and polishing, this centre is equipped with state of the art technology to manage a wide range of complexities across shape, size, colour, and clarity up to 5 carats. The facilitys hallmark lies in its ability to balance artisanal finesse with technological precision, producing consistently high-quality stones that are globally recognised as the Asian Star Make.

The product portfolio includes a broad spectrum of certified diamonds, special cuts, and proprietary creations such as EX-EX-EX Hearts & Arrows and custom-designed fancy shapes. These diamonds are known not only for their symmetry and brilliance but also for the consistency that enables clients to compete effectively in diverse markets. The companys investment in mine-origin programmes and exclusive cuts provides further differentiation, reinforcing customer confidence and market relevance.

Every aspect of production is governed by rigorous quality control and traceability systems, ensuring that ethical sourcing and sustainability remain core priorities. Through continuous enhancement of process efficiency, design integration, and responsible practices, the Surat facility plays a pivotal role in maintaining Asian Stars position as a benchmark in diamond manufacturing.

Manufacturing Facility for Jewellery

Asian Stars jewellery manufacturing capabilities are anchored in three advanced facilities located in Mumbai, Hosur, and Surat. Collectively spanning over 60,000 square feet, these units together offer an annual production capacity of 750,000 pieces. This manufacturing infrastructure is a core component of the companys vertically integrated value chain, designed to serve global markets with precision, agility, and scale.

The facilities produce a diverse range of diamond-studded jewellery across classic, contemporary and fusion styles, catering to a wide spectrum of consumer preferences and regional demands. Supported by a skilled workforce and cutting edge technology, the operations blend traditional craftsmanship with modern engineering across both handmade and machine made segments. Advanced CAD/CAM systems, in-house casting and setting capabilities ensure streamlined workflows, faster turnaround times and high levels of customisation.

To strengthen its design and product leadership, Asian Star has established a dedicated Product Development Centre focused on research-led solutions and market-responsive innovation. An exclusive design centre further reinforces its ability to stay ahead of emerging trends and client expectations. These initiatives support the creation of bespoke collections and private label programmes, positioning Asian Star as a preferred supplier for leading jewellery brands and retail chains across the world.

Distribution

The company has a global presence, with strategically located offices and marketing arms in major manufacturing, trading and consumption centres, supported by a workforce of over 1,900 employees. With its extensive marketing network, the Company has access to the latest market updates and global design trends, enabling it to better serve its customers and deliver unique products. Asian Stars comprehensive distribution strategy caters to a diverse customer base, including renowned brands, retail chains and businesses. At the heart of the Companys business strategy lies the sincerity of always putting customers first and the passion to create customer experiences that are personal, positive and beyond expectations.

Retail

The company boasts a spacious and luxurious jewellery boutique that houses pret diamond jewellery, catering to high net worth individuals (HNIs). This boutique offers curated collections of exquisitely crafted, versatile and wearable pieces. It also undertakes customized orders, creating innovative and bespoke jewellery for discerning customers on special occasions.

Financial Overview

In FY 2024-25, Asian Star Company Limited operated in a subdued global environment marked by economic uncertainty, cautious consumer sentiment and continued price corrections in the diamond industry. These external pressures weighed on the companys diamond segment; however, the jewellery business delivered a strong performance, reaffirming the companys strategic balance across product verticals.

The company achieved a consolidated turnover of Rs. 2,955.75 crore, down from Rs. 3,523.29 crore in FY 2023-24, reflecting a 16.11% year-on-year decline. This contraction aligned with the broader challenges faced by the global trade during the year. The jewellery segment registered healthy growth, with revenue increasing to Rs. 822.40 crore, up from Rs. 625.93 crore in the previous fiscal, an increase of 31.4%. This strong performance underscores the growing traction of Asian Stars jewellery business across global markets, supported by a well-diversified product portfolio and focused customer engagement.

The company reported an EBITDA of Rs. 80.91 crore, while profit after tax (PAT) stood at Rs. 43.19 crore, with an earnings per share (EPS) of Rs. 27. While overall turnover declined year-on-year, the company maintained its financial stability through disciplined cost management and prudent operational execution.

OPPORTUNITIES

Indias Strength as a Global Manufacturing Hub

India continues to retain its position as a cornerstone of the global gem and jewellery supply chain. Its competitive edge stems from decades of manufacturing expertise, a skilled labour force and a robust support ecosystem that extends from sourcing to final dispatch. The countrys vertically integrated operations, combined with a favourable policy environment, allow it to cater efficiently to a dynamic global marketplace. Trade agreements such as the India-UAE Comprehensive Economic Partnership Agreement (CEPA) and ongoing improvements in trade infrastructure, such as the Bharat Ratnam Mega CFC and the Mumbai Jewellery Park, are reinforcing Indias status as a preferred hub for ethical and efficient manufacturing. As global retailers seek partners with scale, compliance and agility, India remains well-positioned to meet that demand.

Expanding Demand in Emerging Markets

While established markets like the US and Europe continue to face macroeconomic pressures, emerging regions are witnessing notable demand expansion. The Middle East, particularly the UAE and Saudi Arabia, has seen a significant uptick in jewellery consumption, supported by retail growth, tourism led spending, and rising disposable incomes consumption, supported by retail growth, tourism led spending and rising disposable incomes. Africa is beginning to show long-term potential, with countries like Nigeria witnessing multi-fold increases in consumption, driven by a growing urban class. Southeast Asian economies such as Vietnam, Malaysia and the Philippines are also increasingly engaging with Indian jewellery exports, with evolving consumer preferences favouring both traditional and contemporary designs. As demand becomes more geographically dispersed, Indian exporters have an opportunity to diversify risk and deepen presence in high-growth territories.

Domestic Market Resilience

Indias domestic jewellery market continues to demonstrate resilience, underpinned by cultural affinity, stable demand across life events and increasing consumer sophistication. While macroeconomic factors influenced gold consumption in early FY 2024-25, the second half of the year witnessed a steady recovery driven by festive and wedding purchases. There is a growing appetite for branded, everyday wear jewellery, particularly among urban and aspirational consumers. This shift is creating headroom for organised players to expand their footprint, introduce lightweight and design-led offerings and deepen engagement through digital and omni-channel formats.

Shifting Global Trends and Lifestyle-Driven Demand

The jewellery industry is undergoing a structural transformation, with consumers across markets seeking more than traditional adornment. Designs that combine personal expression, lifestyle utility and ethical sourcing are gaining prominence. High-jewellery and bespoke creations continue to attract affluent buyers, while stackable jewellery, gender-neutral styles and gemstone-accented pieces appeal to younger segments. The blurring of boundaries between jewellery and fashion accessories is also opening new design possibilities. For players with agile design capabilities and a strong understanding of evolving global aesthetics, these shifting preferences offer a meaningful opportunity to capture new demand.

RISKS, THREATS AND CONCERNS Macroeconomic and Geopolitical Headwinds

The global gems and jewellery trade continues to be shaped by macroeconomic challenges, including elevated interest rates, persistent inflation in advanced economies, and ongoing geopolitical instability. These conditions have dampened consumer sentiment in key export destinations such as the United States, Europe, and China, resulting in more cautious retail spending and shorter purchasing cycles. Currency volatility and shifting regulatory frameworks further add to the uncertainty, complicating long-term trade planning and pricing strategies for exporters.

An additional source of concern is the evolving trade environment in the United States. The prospect of retaliatory tariffs on gems and jewellery imports has introduced a layer of unpredictability in the industrys largest consumer market. Even before formal measures are implemented, the anticipation of higher costs has led retailers to adopt more conservative procurement practices. For Indian exporters, this reinforces the importance of diversifying markets, enhancing value-added offerings, and remaining agile in the face of policy-driven disruptions.

Commodity Price Volatility and Margin Pressure

Sharp and sustained fluctuations in the prices of precious commodities, particularly diamonds and gold, have exerted pressure on both inventory management and profit margins. In FY 2024-25, commercial-grade polished diamonds witnessed continued price corrections while rough diamond prices remained sticky, creating an imbalance that eroded margins for midstream players. Similarly, high gold prices impacted affordability and reshaped consumer demand patterns. These dynamics challenge procurement strategies and demand timely recalibration of pricing and sourcing models.

Intensifying Compliance and Traceability Requirements

As consumer consciousness around ethical sourcing and product transparency grows, regulatory bodies across the globe have tightened compliance norms. Evolving mandates around traceability, origin disclosure, ESG adherence and digital documentation are placing increased demands on exporters. While Indian manufacturers are investing in infrastructure to meet these expectations, the pace and fragmentation of global compliance standards necessitate constant vigilance and operational agility to maintain market access.

Shifting Consumer Behaviour and Market Competition

Changing consumer preferences, particularly among younger demographics, are redefining the rules of engagement in the jewellery industry. Demand is veering toward lightweight, everyday wear, personalisation and purpose-driven purchases. At the same time, the rise of direct-to-consumer brands and global retail giants is intensifying competition. For legacy manufacturers, this calls for continuous innovation in design, faster turnaround times and a heightened focus on value-added services to sustain competitiveness in both domestic and international markets.

INTERNALCONTROLS

Asian Star Company Limited has established a comprehensive and well-structured internal control framework to support effective financial reporting, operational oversight, and compliance across its diverse business functions. In line with the scale and complexity of its operations, the Companys internal control systems are tailored to ensure accuracy in financial records, safeguard assets and promote operational efficiency.

The internal controls encompass detailed policies and procedures spanning governance, regulatory compliance, risk management, information security and audit practices. These systems are designed to detect irregularities promptly, support timely corrective actions and ensure accountability at all levels of the organisation. Regular internal audits and periodic risk assessments are conducted to evaluate the effectiveness of these controls.

The Audit Committee of the Board, in coordination with the internal audit team, reviews the adequacy and performance of the internal control mechanisms at regular intervals. These reviews help maintain high standards of transparency, minimise exposure to fraud and ensure adherence to statutory obligations.

During the financial year under review, the internal control systems operated effectively and no material weaknesses were observed in their design or implementation.

HUMAN RESOURCES

Our employees are pivotal to the Companys growth and success. The HR policy is designed to create a transparent, inclusive and supportive work environment that fosters overall growth and development. We focus on maintaining high engagement levels, consistent performance and an innovative mindset to minimize attrition. Throughout the year, we conducted periodic learning and development trainings, interactive sessions and quality and production workshops to nurture a growth-oriented culture. Regular skill development and training programs were organized to enhance the capabilities of our workforce. Employee satisfaction and empowerment were prioritized through robust reward and recognition programs, along with sincere appreciation from management. These initiatives ensure our employees remain motivated, skilled, and aligned with the Companys vision.