Asian Star Company Ltd Management Discussions.


Global Economy

The year gone by was full of challenges with extreme ups and downs as never seen before. 2020 witnessed unprecedented and deep contraction, of 3.3% in global economic activity. The Covid-19 pandemic related lockdown in first half of 2020 impacted global economic growth. Many economies entered the crisis in a precarious fiscal situation and with less capacity to mount major health care policy responses or support livelihoods. Losses were particularly large for tourist nations, commodity exporters and countries with limited policy space to respond. Despite the economic disruption across the globe, global GDP decline was lower than initially feared primarily due to unprecedented monetary policy support from global central banks and fiscal stimulus from governments.

Advanced economies contracted 4.7% in 2020 with the decline in Euro zone at 6.6%, much sharper than that in the US at 3.5%. Advance economies are expected to grow at 5.1% in 2021 and 3.6% in 2022. Emerging economies witnessed lower economic impact than advanced economies in 2020 with 2.2% contraction and are expected growth at 6.7% in 2021 and 5% in 2022. The rebound in economic activity started in the second half of the fiscal continued unabated led by the advanced economies. Economic indicators from US hints that recovery is getting entrenched and has been better than expected supported by fast pace vaccination, lifting of restrictions and improvement in jobs market. Euro zone, which was lagging in vaccination till a few months ago, has also rapidly ramped up its pace of vaccination. The recent data from Euro zone and UK shows that the recovery momentum is improving with broad based improvement in both manufacturing and services sector. While growth momentum in China moderated a tad; it still remains at a reasonable level. The outlook on global growth remains optimistic on back of easing restrictions, accommodative fiscal and monetary policy, lower trending unemployment, pick up in housing and manufacturing, high household savings, improving consumer sentiments, etc. Recovery paths will vary within the group with USA and China expected to grow by 6.4% and 8.4% respectively to lead the recovery. The United States is projected to return to end-of-2019 activity levels in the first half of 2021 and Japan in the second half. In the Euro area and the United Kingdom, activity is expected to remain below end-of-2019 levels into 2022.

Ensuring adequate worldwide vaccine production and universal distribution at affordable prices is essential for all countries to decisively beat back the pandemic. Adequate access to international liquidity is needed on health care, other social, and infrastructure spending required for development and convergence to higher levels of income per capita. The key global political leaders need to join hands and keep an eye on key macro indicators like interest rates, inflation, job creation and credit off-take to ensure smooth recovery path. Policy measures announced at the end of 2020 - notably in the United States and Japan - are expected to provide support in 2021-22. Amid exceptional uncertainty, the global economy is projected to grow 6.0% in 2021 and 4.4% in 2022. Recovery will have to navigate through occasional regional restrictions necessary at times to stem the progression of new strains of the virus.

Indian Economy

The second advance estimates of National Income for FY2020-21 by the National Statistics Office indicate real GDP contraction at 8% for FY 2020-21 hit by the pandemic and the nationwide lockdown imposed to curb the spread of infections last year. Manufacturing & services, trade, hotel and transport sector were the most hit sectors in FY 2020-21. The most impacted sub-sectors included aviation, tourism, hospitality, trade, construction and industrial activity, due to mobility restrictions. Agriculture was the only positive sector on the back of good monsoon. Indias economy contracted during the first half of FY 2020-21 with steep fall of 24.4% in the first quarter, before returning to positive territory in second half of the fiscal.

India saw a V-shaped recovery with most consumption and industrial indicators returning to positive growth territory. In the second half, restrictions on inter-state movements were lifted to ensure mobility of goods, thereby easing supply-side pressures. Industrial activity picked-up with stronger car sales, rising finished steel production and diesel consumption, higher goods and services tax revenue collections and improvement in the availability of finance from banks and internal sources. Pent-up demand and festivities added to buoyancy in economic activity.

The massive spending push of over 4 trillion announced in the Union Budget 2021-22 is expected to boost consumption supported by solid fiscal and quasi-fiscal measures. The recovery in economic activity and improved investor sentiments are a result of impactful reforms undertaken by the government since March 2020. In order to boost the economy, the Government has initiated several investment focused spending programs like the National Infrastructure Pipeline, demand-driven capex, and the Centres Production-Linked Incentive (PLI) scheme.

The current external environment is one of the finest that India has experienced in a long time on back of low interest rates globally, weak oil prices, likelihood of India benefiting from realignment of global supply chain due to anti China sentiment, ample global liquidity and favourable environment for increase in manufacturing. These factors coupled with accelerated pace of reforms focused around improving Indias local manufacturing and a conducive environment to gain share in global manufacturing has the potential to put Indian economy back on a high growth trajectory on a sustained basis.

Recovering investor sentiment, recovery in manufacturing and construction, investment focused Government spending and massive vaccination drive undertaken by the Government is likely to aid economic recovery. As per the World Bank, Indias GDP growth is estimated at 8.3% during FY 2021-22 depending on the success of vaccination campaign, global economic recovery and impact of second and third infectious wave of COVID-19. Unlike the first wave where lockdowns were applied nationwide for several months, the second wave micro-containment zone measures were more localized, targeted and lasted for shorter duration. Businesses and consumers have also grown more accustomed to operating under pandemic conditions which is expected to contain the negative impact on economy.

The challenges of COVID-19 notwithstanding, India remains one of the worlds most significant economies powered by its people and growing opportunities.


Global Gems and Jewellery Industry

The COVID-19 pandemic created a massive disruption in the supply chain across countries with closure of mines, factory shutdowns, closure of retail stores, restrictions on goods movement and postponement and cancellation of trade exhibitions and events having a significant impact on the trade of gems and jewellery. Spending on discretionary items like watches, jewellery, apparel, accessories and cosmetics witnessed decline during 2020, as consumers started stocking up the essentials and staple food items, globally.

Lockdowns, travel restrictions and economic uncertainty pushed diamond jewelry sales down by 15% in 2020 predominantly in the first half. Faced with store closures, diamond retail sales pivoted online, and benefited from consumers who could not spend on travel or experiences, choosing diamond jewellery instead since it is considered a tangible physical investment. Demand returned during the fourth quarter, culminating in strong holiday jewellery sales across the globe, particularly in the US and China, which saw a 5-10% and 15-20% rise in the fourth quarter, respectively. Diamond jewellery performed better than the global personal luxury market in 2020 which witnessed 22% decline.

Mining Companies responsible and flexible approach during this crisis supported the midstream players to weather the storm. Mining companies implemented production cuts and allowed postponement of contractual buying easing the pressure on the inventory pipeline. Diamantaires are staying light on inventory and prefer to purchase roughs when there is visibility in polished-diamond sales. The focus on realization of outstanding dues helped improve the receivable levels and overall working capital cycle. This coupled with supportive banking policies helped avoid liquidity crunch.

Despite COVID-19 crisis, consumers continue to value diamond jewellery as a desirable gift and a key element of marriage. In 2020, around 20% of diamond retail sales occurred online, up from ~13% in 2019. The online share of diamond jewelry sales is still low compared to other luxury and consumer products. Most consumers use digital tools to research and choose jewellery before making in-store purchases. Trend is unlikely to fully reverse after the pandemic, compelling retailers to invest in digital capabilities, delightful online shopping experiences and seamless omnichannel or phygital interactions.

According to Bain & Company, the Chinese diamond jewellery retail market is expected to recover in early 2021, while other developed countries will reach pre-pandemic levels in 2022-23. Retail recovery in emerging countries is expected in 2023-24. Epidemiology, government policy response and consumer response are expected to be the key factors influencing diamond jewellery retail sales. The diamond industry exhibited agility with players throughout the value chain promptly adapting and consumers of diamond jewelry showing the willingness to invest in it, even in difficult times. The most important aspect of the recovery is that the revival in the demand seen in the second half has continued and is expected to get stronger with fading impact of pandemic and rapid vaccinisation in major markets like US, China and Europe.

Indian Gems and Jewellery Industry

The Gem & Jewellery sector is truly Indias sparkling gem contributing about 7% to GDP, employing over 4.64 million people and being responsible for about 16% of the countrys total merchandise export. Being one of the largest exporting sectors, the gems and jewellery industry plays a key role in Indias economy, contributing a large percentage of the total foreign reserves of the country. It is a unique industry, with India being a proud global leader in terms of heritage, designs and craftsmanship. The extremely export oriented and labour intensive industry is one of the fastest growing sectors and one of the largest in the world.

In F.Y. 2020-21, gems and jewellery exports declined 28.5% to USD 25.3 bn from USD 35.3 bn in F.Y. 2019-20 on account of COVID-related disruptions. However, the decline was much lower than what was feared at the beginning of global lockdown.

The year gone by was an exceptional year with worldwide supply chain disruptions caused by the pandemic. Yet the Indian gems and jewellery industry exhibited resilience, adapted to the new normal and strived towards attaining recovery in exports, especially in the second half of the year. The first half of the year witnessed significant drop in demand both in domestic and international markets. There was a complete washout of the first quarter due to lockdown to curb spreading of the COVID-19 which has had cascading impact on full year growth. While the international borders restricted their trade to essential commodities, domestic market could not witness much sales due to the closure of retail showrooms. Hence, online mode of selling, being the only alternative, gained pace. Improved international market demand in the third quarter owing to a robust holiday season, stimulated manufacturing across industry and overall gross exports. As restrictions eased in the domestic market, festive demand and pent-up demand saw slight pick-up starting second half of the fiscal. Offline sales were severely impacted due to restricted mobility and fear amongst people even when restrictions eased.

Digital adoption, changing consumer priorities and emerging niche segments are redefining jewellery retail across markets amid the coronavirus pandemic. Virus-containment efforts along with medical precautions accelerated digital transformation in the jewellery industry as homebound consumers headed online to shop. E-commerce and omnichannel retail solutions kept consumption humming despite lockdowns and social-distancing regulations. Augmented-reality software, do-/design-it-yourself jewellery options and digital customer interfaces narrowed the gap between online sales platforms and brick-and-mortar stores. Contactless payments grew their market share during the pandemic and are likely to remain important in the next normal, with people gaining trust and confidence in e-wallets and online purchases. The online retail sales has seen marked improvement led by providing certificates, warranties and reviews; enhancing convenience through free delivery and returns or try before paying programmes; and giving additional discounts and promotions for online purchases. The Indian gems and jewellery continue to hold a dominant place in the world market owing to its cost competitiveness, highly skilled talent pool, availability of cheap labour and use of modern technologies. US, Europe, Japan, and China are Indias leading export destinations for gems and jewellery with US accounting for nearly one-fourth of the countrys total exports.

Cut and Polished Diamonds

As the worlds largest centre for cut and polished diamonds, annually India processes about 1 billion pieces of diamonds valued at USD 23 bn. India is deemed to be the hub of the global jewellery market because of its low costs and availability of cheap labour. India exports 75% of the cut and polished diamonds and contributes to 29% of the global jewellery consumption. Today, 14 out of every 15 diamonds sold in the world are processed in India. The countrys share in global diamond market stands at 65% in value terms and 85% in volume terms. The sector is home to more than 300,000 gems and jewellery players. Several of these players have developed capabilities for mass produced diamond jewellery designed for Europe, US or Far East as well as exquisitely crafted designer jewellery in plain gold or studded with diamonds and coloured gemstones.

All the stakeholders collectively decided to voluntarily suspend rough diamond purchases between April and July 2020. The industry did not devalue, and excess inventory got offloaded easing the pressure on the inventory pipeline. The pent-up demand and diamonds getting listed in the preferred buying list in the second half from the USA and China, which consume 50% and 20% of diamonds produced in the world, respectively, resulted in healthy order bookings from retailers in those markets. As per GJEPC, exports of cut and polished diamonds declined 12.1% from USD 18.7 bn in F.Y. 2019-20 to USD 16.4 bn in F.Y. 2020-21.


India counts amongst the largest plain as well as studded gold jewellery exporters of the world, exporting to almost 160 countries. India boasts of close to 20 unique jewellery making styles. Globally the sector is renowned for its handmade jewellery, with specialisation in areas such as kundan, temple and meenakari, not available anywhere else in the world. Indias gold jewellery exports comprise of both handmade jewellery and machine made jewellery produced on a large scale.

According to GJEPC, export of studded gold jewellery declined 15.74% in F.Y. 2020-21 to USD 2.78 bn from USD 3.30 bn in F.Y. 2020-21 hit by the coronavirus pandemic and high gold prices. Changed consumer social distancing habits and limitations on social events globally contributed immensely to the slack in demand.

Jewellery industry is seen growing with technology advancement and proliferation of e-commerce. Growth in online shopping, ease of availability, attractive offers, and increasing popularity of affordable jewellery is compelling jewellery players to tap e-commerce platforms. Online sales are expected to account for 1% to 2% of the fine jewellery market by 2021-22, driven by burgeoning internet penetration, greater convenience, and easy availability of affordable jewellery. Demand for fashion jewellery has been growing significantly in younger generation and millennials who treat fashion jewellery as a style statement.

Given the favorable demographics and greater spending propensity in India, a larger number of people today prefer branded and high-quality jewellery. Increasing penetration of organised jewellers implies exclusive collection of pioneering and authentic products. Further, mandatory hallmarking of gold jewellery strengthens consumer confidence and creates a level playing field for organised jewellery players. Organised jewellery manufacturers are focused on making higher branding and marketing investments to increase their reach and market share and cater to the fast-growing retail industry.


The impact of Covid-19 has been steadily fading away aided by lock down and other restrictive measures taken by various countries. Financial packages, stimulus, reliefs provided by banks across the countries have helped global economy to navigate through these difficult times. All these measures have helped protect lives and livelihood. Rapid pace of vaccination has helped curb the spread of virus and bring back normalcy. Overall impact of Covid-19 has been far lesser than feared when the pandemic broke out. The economic revival and the upbeat overall economic sentiment witnessed during the second half of last fiscal has continued, which augurs well for the year ahead.

India has done remarkably well to rebound after the historical fall witnessed in the first quarter. The harsh steps taken by the government had brought the economy to standstill but putting lives before livelihood proved to be the right choice. The economic recovery seen in the second half of F.Y. 2020-21 is poised to sustain in the coming fiscal, notwithstanding the spike in Covid-19 cases seen in the second wave as the cases are concentrated in a few states and containment measures are more localized - targeted and less stringent. The impetus to infrastructure development in Union Budget 2021-22, supportive government policies, steady farm performance and sustained rural demand, revival of urban demand together with rollout of vaccination, hold promise for continued improvement in the overall economic activity.

The Government is focused on expanding exports by providing conducive environment for manufacture of quality goods at competitive prices. Alterations to the global supply chains, which are heavily dependent on China, in the aftermath of the pandemic and geopolitical changes, has prompted businesses to shift their reliance to other countries which presents a huge opportunity for India to become an alternate base. The Prime Minister has urged the stakeholders to put all their efforts to take advantage of this opportunity. Considering the size of our economy and potential, our manufacturing and service industry base, there is tremendous potential for export growth. Sensing this, Government has spurred itself into action, especially post the border standoff, and has undertaken series of steps in quick succession over the past few months like launching PLI schemes for multiple sectors, raising tariff and non-tariff barriers, rationalizing labour laws, etc. Further, it is for the first time, India is leveraging its large domestic market to incentivize domestic manufacturing. Apart from above, over last few years, Government was implementing measures at a steady pace by focusing on improving ease of doing business, reducing corporate tax rates, Aatma Nirbhar package, etc. All these measures and current environment bodes well for manufacturing in India.

Governments boost to the gems and jewellery sector will enable it to face the challenges imposed by the second and third wave. In Union Budget 2021-22, the customs duty on gold as well as other precious metals was reduced to provide some relief to the industry to bring down the retail prices, boost export of jewellery and curb smuggling. This move will also help in reduction of disparity in gold pricing in India as compared to other international markets. The Government made substantial investment into banks, infrastructure and agriculture which will eventually lead to better liquidity, resulting in better spending by the consumers. The budget also encouraged the NRIs to invest money into the country thereby benefiting the jewellery sector. Additional interest subvention, extension of loan maturity and interest payment, among others, will play a vital role in boosting sector growth. Given its massive growth potential and contribution, the government has been focussing on adopting favourable policies and initiatives to promote investments and support growth of gems and jewellery industry. Measures like Make in India, Brand India, establishment of Common Facility Centres (CFCs) and setting up largest jewellery park in Mumbai will provide a huge thrust to the industry.

Lockdown, travel and other restrictions resulted in disruption in supply chain of the industry. Mobility restrictions impacted offline sales though online sales have compensated it to an extent. The industry quickly adapted to the new normal with virtual events becoming commonplace both for B2B and B2C. Players across the value chain have adopted digital and omnichannel strategies to reach out to their consumers. Towards the second half of last fiscal, pent-up demand and stimuli had buoyed consumption of diamonds and jewellery in the US and China, which account for ~75% of Indias polished diamond exports. With the pandemic said to be contained in China, and the US inoculating ~40% of its population, consumer confidence has improved in both countries. Demand will also be bolstered by improving economic growth and declining unemployment. Studded precious metal jewellery exports are expected to be an important growth area in 2021. Postponement of wedding and other occasions last year will also help boosting the local pent up demand. Overall the outlook for the Industry looks very promising albeit the sharp rise in Covid cases forcing stringent restrictions are the key threats to be negotiated.


With five decades of experience, Asian Star Company Limited (the Company) has emerged as one of the worlds prominent and distinguished diamond & jewellery manufacturing companies. The Company operates across the value chain from rough sourcing to diamond cutting and polishing to jewellery manufacturing and retailing. The Company is one of the largest diamantaires in the country with vertically integrated operations.

With an extensive global presence and widespread global marketing network the Company has a massive global footprint covering major diamond consuming cities, namely Chicago, New York, Antwerp, Dubai, Shanghai, Hong Kong, Bangkok and Singapore. In its journey of 50 years, the Company has earned itself the reputation of the most trusted diamond companies in the world supported by its state-of-the-art infrastructure, expert team, and dedicated R&D capabilities.

The Companys stronghold on its supply chain is reflected in strong arrangement of direct supply of rough diamonds established with the top global mining companies. The Company is an approved manufacturer of the worlds leading retail brands, reiterating its expert craftsmanship and persistent commitment to quality and veracity.

Manufacturing Facility for Polished Diamond

Spread across 1 lakh sq. ft, the Companys sophisticated diamond cutting and polishing facility located in Surat, Gujarat houses latest equipment and technology. This world class facility employs over 800 skilled artisans. The highly experienced and adept production team addresses the various complexities of diamond cutting resulting in optimal yield and utmost client satisfaction. The Company is recognised for its consistency in quality and cut and its products are acknowledged as Asian Star Make in the global industry.

The Company provides conflict-free natural diamonds specially customized in proprietary cuts as per client demands. Its extensive portfolio spans across colours and shapes with diamonds ranging upto 5 carats in size in fine make. Its loose polished portfolio consists of round brilliant diamonds, generic fancy shapes, EX-EX-EX Hearts & Arrows cut, proprietary diamond cuts and Forevermark diamonds.

Manufacturing Facility for Jewellery

The Company is a preferred supplier to leading jewellery brands and retail chains worldwide backed by its strong competence in jewellery manufacturing. It has three in-house manufacturing facilities - two located at SEEPZ and MIDC in Mumbai; and one at Hosur in Tamil Nadu, spreading across a total area of 50,000 sq. ft. The aggregate production capacity across the three facilities is around 7.5 lakh pieces anually. The SEEPZ facility exclusively caters to the international markets, and the MIDC and Hosur units serve the domestic market demand.

The Company is renowned for its bespoke and spectacular jewellery well aided by its skilled designing and merchandising teams. Large-scale manufacturing and lean manufacturing processes enable the Company to minimise production cycle and offer competitive prices for the highest quality products.


The Company has strategic presence in major diamond trading and consuming centres in Asia, Europe and America with an extensive network of subsidiaries and marketing arms. The Company creates bespoke products inspired by latest technology firmly backed by its long lasting relationships with worlds leading retailers and brands. It offers distinguished services like dedicated quality control programme, access to widespread design bank and design customisation. Its unique products and differentiated services are inspired by its easy access and monitoring of information on latest market updates and global design trends.


In the niche jewellery retail space, the Company has a spacious and luxurious couture diamond boutique, exclusively to serve the high net worth individuals (HNIs). The boutique offers a wide range of pret diamond jewellery, and undertakes customised orders with jewellery design consultations suiting the preferences of discerning customers for special occasions. Rendezvous Luxe, a luxury event and a couture diamond jewellery extravaganza is annually organized for Mumbais elite, wherein the Company displays its exquisite diamond jewellery. Diverse sources such as nature, art and history are the inspirations for the design conceptualisation of its thematic collections.


In view of an extremely challenging business environment, both internationally as well as in India, the Companys total income from operations at consolidated levels declined 16.7% from Rs. 3,052.94 crores in F.Y. 2019-20 to Rs. 2,544.39 crores in F.Y. 2020-21. Due to Covid-19 related lockdown and restriction in movement of people and goods for most part of the year, the diamond business revenue declined 16.23% from Rs. 2,394.48 crores in F.Y. 2019-20 to Rs. 2005.98 crores in F.Y. 2020-21. Jewellery business revenue declined by 18.3% from Rs. 653.31 crores in F.Y. 2019-20 to Rs. 533.92 crores in F.Y. 2020-21. Consolidated PAT (excluding other income, exceptional items and comprehensive income) declined 25.7% from Rs. 67.07 crores in F.Y. 2019-20 to Rs. 49.83 crores in F.Y. 2020-21. The consolidated net worth of the Company stood at Rs. 1,212 crores at the end of the year under review.

However, it is pertinent to note that the Company demonstrated remarkable resilience in the latter half of the year as it quickly adjusted to the new reality of the Covid-19 situation. The combined efforts of everyone in the Company helped overcome a marked difficult year with an unprecedented performance in the last two quarters. The total revenue for the last six months of the year increased by over 32% compared to the same period in the previous financial year. This reflects the fact that the Company has re-calibrated itself to the new reality and indicates all possibilities of continuing this positive trend in the new financial year.


Reduced Competition from other Luxury Products

With travel bans and closure or reduced operating hours of restaurants, cinemas, shopping malls and other establishments, consumers awash with discretionary cash are spending locally, fueling domestic retail. Travel has previously been the key competitor to diamond jewellery in recent years, particularly for the millennial share of wallet. As per report, discretionary spends saved due to travel restrictions are likely to be allocated to diamond purchases. In 2020 over two-thirds Americans cancelled travel plans with 55 per cent left with extra money as a result. In the absence of travel, one in eight consumers said they would instead choose diamonds to mark a special occasion.

Tier I and tier II towns see growing demand

Urbanisation, favourable demographics, higher disposable incomes, growing affluence, and evolving consumer choices led by deep penetration of mobiles and internet, there has been an unprecedented rise in jewellery demand in the domestic markets especially from tier I and tier II towns. With lower impact of COVID-19 led pandemic, good monsoon, better agricultural output, favourable government policies pushing reforms in rural India, there has been a steady growth in jewellery demand in smaller towns.

Realignment of global supply chains

Countries are increasingly shifting trade ties with China post the outbreak of COVID-19 pandemic to other Asian countries. Indian gems and jewellery market with immense global recognition, rich experience, availability of skilled and low cost labour has emerged as an attractive alternative to China. Sensing this opportunity government has also taken various steps to support the industry and boost manufacture, which augurs well for the future growth of the industry.

Shift from unorganized to organized

Several small and unorganized players who have hitherto dominated the Indian gems and jewellery industry have been facing severe challenges led by COVID-19 in terms of access to finance, managing cash flows, etc. Travel and trade restrictions have not only dampened consumer sentiment and disrupted supply chains, but also led to the emergence of online/omni channel business. There has been growing awareness and concern among the youth towards sustainability. Consumers are now concerned about environmental preservation, conflict-free supply chains and carbon footprint. Unorganized players are struggling to evolve with the changing market dynamics and unable to bear associated financial stress, giving way to growth of the organized sector.


With business-as-usual no longer the norm, agility and responsiveness to new trends and developments is commonplace. Online jewellery shopping which had seen robust growth in the light jewellery segment pre-COVID19, is witnessing substantial growth with restricted mobility.E-commerce and omnichannel retail solutions kept consumption humming globally despite lockdowns and social- distancing regulations. Augmented-reality software, do-/design-it-yourself jewellery options and digital customer interfaces narrowed the gap between online sales platforms and brick-and-mortar stores. Emerging online jewellery players have enabled people in tier I and tier II cities to shop for gold and diamond jewellery. Ease of availability and delivery backed by a variety of payment options including cash on delivery and other advantages such as easy instalments and discounts make online shopping lucrative and more feasible. Online shopping is increasingly being integrated with an in-store purchase experience to a digital platform led by high-quality images, easy return policies, try-at-home options, and consumer friendly product configuration settings.

The Government of India has taken a number of initiatives to propel the growth of Indias online jewellery industry. Several laws have been passed to secure and stabilise the digital payments ecosystems. Additionally, there are laws to protect the interests of consumers while making transactions online. This has resulted in a substantial increase in the usage of cards and digital wallets for online purchases. As more retailers in the jewellery segment realize the huge opportunity in the e-commerce sector, the players are gearing up to emerging consumer expectations for a great shopping experience. Innovative technology to meet consumer demands will outline the next phase of growth.

Self purchase emerging as a high growth consumer segment

The female self-purchase market notably gained steam across product categories during the pandemic. Research and surveys have noted that female self-purchase of precious jewellery was robust last year and will continue to gain strength in 2021. Research showed that 77 per cent of Chinese and Indian female respondents along with 59 per cent of American female consumers bought non-bridal jewellery for themselves in 2020. And over 80 per cent of Chinese and Indian and 67 per cent of American female respondents plan to buy themselves non-bridal jewellery this year. This reflects the aspirations of millennial consumers who seek affirmation in a rapidly changing society. Many retail jewellers have started expanding their offerings and target female self-purchase as a new consumer segment which has good potential for growth.

Diamond as an Investment Option

Diamonds are increasingly becoming a lucrative mode of investment given ever increasing gold prices amidst economic uncertainties and limited investment options. Consumers attach both emotional and rational intent to diamond purchase as it is a safe haven for investment. It is beyond an adornment metal, it is a symbol of security led by certified diamonds which provide transparent valuation and value assurance. As people spend less on travel and lifestyle expenses due to COVID-19, jewellery is expected to benefit from a part of this unspent income. Also, the grandeur of Indian weddings is shrinking with less number of people and the focus is shifting to investment in jewellery.

Government Support to the Industry

Government has identified the industrys immense growth potential and has been supportive. It has been working hand -in- hand with the Industry.

In Union Budget 2021-22, the government announced reduction on import duty for precious metals (including gold and silver) to 7.5%, from 12%, that will help the gems and jewellry exports market in India become globally competitive.

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; this will help build consumer trust and confidence.

In August 2020, the government called for constituting a special group, which will include both customs and banking officials, to resolve issues faced by the gem and jewellery sector.

The Gem & Jewellery Export Promotion Council (GJEPC) is setting up the India Jewellery Park in Navi Mumbai, which will have around 5000 big and small units across the value chain and will be a one stop hub for all the transactions. This will facilitate in strengthening exports.


Fall in Demand due to uncertain environment

The Market has seen V-Shaped recovery in the second half of the last fiscal. This is largely attributed to release of pent up demand and liquidity created by the generous stimulus and relief packages provided by various governments. These are temporary measures and will dry down over a period of time. This has also lead to spurt in inflation across economies affecting the disposable income in the hands of the consumers. Beside this, pandemic is not fully under control and crops up at regular intervals. Second wave of Covid dampened the activity in the local gem and jewellery sector with reduced footfall in stores and several jewellers shutting shops located in malls and shopping complexes. Concerns of possible third wave raises threat to growth prospects of the industry as consumer confidence may get dampened.

The Companys widespread global presence, strong distribution network and distinguished product and service are supporting growth opportunities and business continuity. It is not dependant on any particular market and is capable of navigating through such challenges.

Pressure on Margin may mount

While gem and jewllery market demand has been reviving, margins may come under pressure due to heightened competition. As players compete for the same pie of the market demand, profitability is likely to get impacted.

Slowdown in mining activities has constrained supply of rough diamond leading to increased prices. If the price of the end products doesnt increase at the retail level, then it will further squeeze the already thin margins.

Strong focus on improving yields and containing wastages has been the Companys unmatched strength in testing times. Lean manufacturing process, leveraging innovation and modern technology and processes, long term contracts to procure rough diamonds at competitive rates, vertically integrated operations enable the Company to keep costs under control while serving consumers with superior quality products at competitive prices.

Growing demand for less expensive lab grown diamonds

Synthetic/lab grown diamond market is steadily growing amidst limited disposable income. Income constraints due to COVID-19 pandemic has further fuelled this trend. Consumer acceptance for lab grown diamonds is on the rise as they are much less expensive as compared to natural diamonds but appears as good as natural diamond. Jewellers have also invested in the aesthetic appearance of lab grown diamonds which is enhancing appearance of such jewellery. Youth buying jewellery for fashion are also likely to be attracted towards it.


The internal control systems are designed to safeguard the Companys assets and ensure efficient productivity at all levels. The systems are adequate for the size, nature and complexity of business and industry in which it operates. Well defined processes, guidelines and procedures and adequate internal information systems encompass various aspects of governance, compliance, audit, control, and reporting. Amidst multifaceted business environment the internal control system works as tool to keep the Company resilient and agile. The Companys robust control systems safeguard sensitive data, ease out audit process, enables maintenance of proper accounting controls and documentation, monitoring of operations, conservation of assets and reliable, accurate and timely financial reporting. Internal controls also ensure strict adherence to applicable laws and regulations.

The Audit Committee of the Board keeps a close eye on business operations and functioning of the internal audit function. The findings of the audit function are reviewed by the Committee at regular intervals. Appropriate actions, as deemed necessary to ensure sustainability and future growth prospects of the Company, are taken in a timely fashion. The Company strives to ensure strict adherence to all applicable laws, statutes and environmental norms. In addition, the internal control systems ensure adequacy of financial statements. The internal controls facilitate prompt detection and redressal of any deviations in business operations. The controls put forth an accurate summary of the organizations position at all times. During the year under review, no material weakness was reflected in the design or operation.


Human capital is considered a key resource and an integral contributor to the success of the Company. The Company ensures a safe, conducive and productive work environment to enhance employee productivity. Employees are considered a critical aspect of business growth and sustainability. The company boasts of well-defined HR policies which take care of both personal and professional growth of its employees. Polices nurture a culture that leads to alignment of employee goals with that of the Company. Open door policy ensures fair, transparent, and inclusive work culture. Direct conversations and exchange of ideas between employees and management are commonplace. The Company conducts regular trainings to the employees in the form of quality and production workshops to ensure skill upgradation and personnel development. The attrition level is minimal given HR focus on maximising employee productivity, increasing employee satisfaction and engagement. Robust policies regarding work acknowledgement and recognition and reward help inculcate a sense of belongingness and empowerment and motivate the employees to further contribute to business growth. The hard work of all the employees has been sincerely appreciated by the management with gratitude.