Bluestone Jewellery & Lifestyle Ltd Management Discussions

Economic

Outlook

Global Economy Outlook

The global economy enters 2026 under
the shadow of a new geopolitical shock.
The outbreak of war in the Middle
East at the end of February 2026 has
emerged as a significant counterforce
to the global economic tailwinds that
had supported growth over the past
year, specifically technology-related
investment, accommodative financial
conditions including a weaker US dollar,
and fiscal and monetary policy support.
The IMFs April 2026 World Economic
Outlook presents a "reference forecast"
built on the assumption that the conflict
remains limited in duration and scope,
with disruptions fading by mid-2026.

Real GDP, annual percentage change
		Projections
	2025	2026	2027
World Output	3.4	3.1	3.2
Advanced Economies	1.9	1.8	1.7
United States	2.1	2.3	2.1
Euro Area	1.4	1.1	1.2
Germany	0.2	0.8	1.2
France	0.9	0.9	0.9
Italy	0.5	0.5	0.5
Spain	2.8	2.1	1.8
Japan	1.2	0.7	0.6
United Kingdom	1.3	0.8	1.3
Canada	1.7	1.5	1.9
Other Advanced Economies	3.0	2.6	2.2
Emerging Market and Developing Economies	4.4	3.9	4.2
Emerging and Developing Asia	5.5	4.9	4.8
China	5.0	4.4	4.0
India	7.6	6.5	6.5
Emerging and Developing Europe	2.0	2.0	2.1
Russia	1.0	1.1	1.1
Latin America and the Caribbean	2.4	2.3	2.7
Brazil	2.3	1.9	2.0
Mexico	0.6	1.6	2.2
Middle East and Central Asia	3.6	1.9	4.6
Saudi Arabia	4.5	3.1	4.5
Sub-Saharan Africa	4.5	4.3	4.4
Nigeria	4.0	4.1	4.3
South Africa	1.1	1.0	1.3
Memorandum
Emerging Market and Middle- Income Economies	4.4	3.8	4.1
Low-Income Developing Countries	4.8	4.8	4.9
Source: IMF, World Economic Outlook, April 202(	6

Under this reference forecast, global growth
is projected at 3.1% in 2026 and 3.2% in 2027,
below the 2024-25 pace of approximately 3.4%,
and well short of the pre-pandemic historical
average of 3.7%. Global headline inflation is
expected to rise to 4.4% in 2026 before easing
to 3.7% in 2027. The IMF notes that if not for the
conflict, 2026 growth would have been revised
marginally upward; the downward revision
is therefore largely a product of Middle East
crises, partly offset by carryover from strong
recent data and reduced tariff rates.

The impact is uneven across economies.
Advanced economies have seen broadly
unchanged growth forecasts, while emerging
market and developing economies face a
0.3 percentage point downward revision for
2026, with commodity-importing nations
and more vulnerable economies carrying a
disproportionate burden. Under more adverse
scenarios involving larger or more persistent
energy price shocks, global growth could fall
as low as 2.0% in 2026, with headline inflation
breaching 6.0% by 2027.

The IMF identifies a range of downside risks
beyond the immediate conflict: further
escalation of trade tensions, a correction
in Al-related investment valuations, fiscal
deterioration across sovereigns already
operating with limited buffers, and erosion of
central bank credibility at a time when inflation
expectations are already under pressure.

On the upside, a sustained Al productivity
dividend and renewed momentum on
structural reforms could provide meaningful
support to economic activity.

Indian Economy
Outlook

Despite heightened global trade tensions,
and geopolitical shocks, India retained
its position as the fastest-growing major
economy in FY26. Real GDP growth
accelerated to 7.6%, up from 7.1% in FY25,
driven by robust domestic demand
underpinned by low inflation, income
tax cuts, GST rationalisation, and more
accommodative monetary conditions.

Manufacturing and services both delivered
strong supply-side performance. The
current account deficit narrowed to 1.0% of
GDP, and fiscal consolidation continued,
bringing the general government deficit
down to 7.4% of GDP.

Labour market conditions remained
stable. Formal employment creation
strengthened, with net new EPF
subscribers growing at nearly 14% year-
on-year in the first half of FY26. Headline
inflation averaged just 1.9% between April
2025 and February 2026, compared to 4.7%
in the same period of FY25, driven primarily
by a sustained fall in food prices. The RBI
responded by cutting the policy rate by a
cumulative 125 basis points to 5.25%, before
shifting its monetary policy stance from
accommodative to neutral in June 2025 as
the room for further easing narrowed.

The external position came under pressure
in the latter part of FY26. The Indian rupee
depreciated against the US dollar,
falling to an all-time low of approximately
A95/USD by end-March 2026, driven by
foreign portfolio outflows and heightened
financial market volatility following the
onset of the Middle East crises. Foreign
exchange reserves declined to $698 billion
by end-March, from a peak of nearly $730
billion in late February.

Looking ahead, the World Bank projects
Indias FY27 growth at 6.6%, reflecting
headwinds from elevated global energy
prices and supply chain disruptions
associated with the Middle East conflict.
Higher oil and gas import costs are
expected to raise inflationary pressures,
temper private consumption, and widen
the current account deficit to approximately
1.8% of GDP. A prolonged conflict poses
additional risks, particularly given Indias

reliance on Gulf remittances, which account
for approximately 38% of total inward
remittance flows. Should global energy
markets normalise, growth is expected to
rebound to 7.2% in FY28.

Indias macroeconomic buffers remain a
meaningful source of resilience. The World
Bank highlights that the current environment
underscores the importance of energy
diversification, prudent fiscal management,
and advancing trade diversification through
recently concluded and prospective free
trade agreements, priorities that will
strengthen Indias position in an increasingly
fragmented global trade environment.

Beyond the macroeconomic picture, the
more structural shift in Indias economic
narrative is defined by a powerful
demographic and social transition reshaping
the nations internal market. At the heart of
this transformation is what can be described
as a "Consumer Renaissance": a structural
evolution where a population of 1.4 billion
is moving from survival-based spending
to a sophisticated, convenience-driven
consumption model.

FACTOR	TRADITIONAL TREND	EMERGING TREND
Household Structure	Large joint families, bulk buying.	Nuclear families, frequent, convenience-led buying.
Consumer Base	Price-sensitive, unorganized local shops.	Value- consciouos; organized retail and e-commerce.
Workforce Dynamics	Male- dominated primary earners.	Rising female labor participation; higher household income.
Urban Density	Concentrated in Tier 1 "Metros".	Massive "Urban Sprawl" into Tier 2 and 3 cities.

Several interconnected trends underpin
this transition. A young, digitally native
workforce is driving demand for modern
retail formats, prioritising speed, and brand
reliability. Rapid urbanisation, coupled with
the nuclearisation of families into smaller,
dual-income households, has increased
demand for organised and efficient
supply chains. The rising participation of
women in the formal workforce has not
only raised household income stability but
has simultaneously fuelled demand for
convenience-driven and self-expressive
consumption. Expanding disposable
incomes across Tier 2 and Tier 3 cities are
formalising the economy, moving the retail
landscape toward organised channels
capable of offering the scale and variety
demanded by a globalising middle class.
Underpinning all of this is accelerating
digital maturity, where rising incomes,
greater purchasing power, and widespread
digitisation have reshaped consumer
preferences toward convenience-first,
digital services.

Industry

Outlook

The evolving Indian retail markets

India is set to become a global retail
powerhouse, with the market projected to
grow from approximately USD 976 billion
(483 trillion) in 2024 to USD 1.57 trillion
(4134 trillion) by 2029, outpacing developed
economies like the US, UK, and China. As
the market matures, growth is increasingly
driven by discretionary categories, enabled
by the Indian consumers evolving
preference for omnichannel shopping,
digital payment solutions, and sustainable
and ethically sourced products. At the
same time, with 82% of the market still
led by unorganised general trade, there
remains a substantial and largely untapped
opportunity in rural and Tier 3+ urban
areas, where rising disposable incomes and
urbanisation are systematically converting
consumers toward organised, value-added
retail channels.

^- The Urban-Nuclear Shift

Rapid urbanization, coupled with the
"nuclearization" of families, has created
smaller, high-density households that
demand higher efficiency and organized
supply chains for daily essentials.

These trends collectively indicate that Indias retail
and consumer markets are no longer just growing
in volume; they are maturing in complexity. For
consumer companies, investors, and policymakers,
this represents a pivot toward a consumption-
led growth engine that is increasingly resilient to
external global trade fluctuations.

E-commerce & Omni-channel:
Retails Most Resilient and Fastest-
Growing Vertical

Indias e-commerce market is set to expand
at a 20-25% CAGR through 2029. Digital
channels have moved well beyond being
a transactional medium; they now serve
as the primary point of product discovery
and customer engagement. Social media
and targeted digital advertising have
become the dominant touchpoints for
consumer awareness, necessitating
seamless technology integration across all
retail operations. This shift has opened a
significant window for digital-first brands to
grow rapidly and build durable consumer
relationships at scale.

India e-commerce is set to expand at a
20%-25% CAGR through 2029 per industry
research reports. Digital channels have
moved from being a mere sales channel
to now serving as a primary point of
discovery & customer engagement. Social
media and targeted digital advertising
have become the dominant touchpoints
for customer awareness, necessitating
seamless technology integration in all retail
operations. This has opened window for
digital-first brands to grow rapidly.

The modern Indian consumer no longer
distinguishes between online and offline.
The omnichannel approach of blending
digital research with physical experience
has become critical, particularly for high-
ticket categories like jewellery. Integrating
data across channels enables real-time
inventory management, reduces stockouts,
and improves inventory turnover. This
data-led approach also increases the
success rate of new store openings and
shortens breakeven periods. The future of
Indian retail lies in a symbiotic relationship
between digital awareness and physical
trust, where a direct-to-consumer ethos
and integrated omnichannel presence
drive higher conversion rates, deeper brand
credibility, and lasting consumer loyalty.

Split of E-commerce in India by brand type

Jewellery landscape in India

The Indian gems and jewellery industry
is a vital contributor to the nations
economy, both as a consumption-driven
domestic sector and as an export-
oriented manufacturing hub, contributing
approximately 7% of GDP and employing
nearly 5 million people. The Government
has supported the sector through a range
of enabling measures, including reduction
in customs duty, 100% FDI permission
under the automatic route, mandatory
hallmarking, and broader formalisation
initiatives. With these tailwinds, the
industry is projected to grow to USD 130-
140 billion by FY29.

Despite its scale, the industry remains
highly fragmented and steeped in
tradition, dominated by small and medium
enterprises. A large portion of consumers
continues to purchase from family-led
jewellers characterised by limited product
range, opaque pricing, high transaction
costs, and inconsistent purity standards.
However, over the last decade, the
market has undergone a meaningful
structural shift, driven by demographic
change, evolving consumer behaviour,
and government regulations designed to
formalise the sector.

Country	Market Size 2024 INR Billion	CAGR (2021-2024)	CAGR (2024-2029)
2	6,340	13-15%	12-14%
m	10,400	2-4%	4-6%
?	6,100	1-2%	2-4%

Strategic Catalysts: Drivers of the
Indian Jewellery Industry

The Indian jewellery sector is undergoing
a structural transformation, moving from
a traditional commodity-based market to
a high-growth, fashion-forward industry.

This transition is powered by a convergence
of demand-side shifts and supply-side
modernisation.

Demand-Side Drivers::

The Consumer Evolution from

"Occasional Buyer" I
to "Lifestyle Consumer" j

On the demand side, rising affluence is reshaping the nature of jewellery consumption. As
the middle class sees expanding discretionary income, gold retains its appeal as a preferred
wealth hedge, with a 1% increase in GNI per capita historically correlating to a 0.9% rise in
gold demand. Simultaneously, younger urban consumers are decoupling jewellery from
weddings, driving a visible shift from pure gold toward diamonds and studded metals that
reflect global fashion sensibilities and daily-wear versatility. Financially Independent Women
have emerged as primary purchase decision-makers, with female participation in household
jewellery decisions rising to 88.7%, supported by easier credit access and a view of jewellery
as a tool for personal expression. Cultural and global fusion is also reshaping preferences, as
Western clothing influences drive demand for diamond-studded designs that complement
contemporary wardrobes while retaining Indias deep emotional bond with heritage.

Supply-Side Drivers:
Ecosystem Modernisation

On the supply side, government intervention and manufacturing prowess are formalising the
industry and de-risking the value chain. Mandatory BIS hallmarking and 100% FDI under the
automatic route have professionalised the sector, boosting both global investment and local
consumer confidence. The Gold Metal Loan (GML) scheme has transformed working capital
management for manufacturers, allowing them to borrow physical metal at lower interest
rates of 2-3% rather than cash, thereby mitigating price volatility and maintaining steady
production cycles. Indias global manufacturing leadership remains anchored in its karigar
(artisan) ecosystem, where centuries-old craftsmanship is being integrated with modern skill-
development initiatives to meet global quality standards.

Market Segmentation and
Dynamics: Navigating a USD 75
Billion Industry

The Indian jewellery market is a highly
heterogeneous landscape, evolving
rapidly from traditional investment-grade
gold to design-led lifestyle accessories.
Understanding this market requires
examining it across five strategic axes:
region, occasion, product type, metal type,
and city tier.

Split of Indian jewellery market by occasion

Regional dynamics reveal a market
with distinct pockets of preference.

Southern India currently dominates 41%
of total demand, with a strong preference
for 22k/24k temple and antique designs in
plain yellow gold. Northern and Western
India show a higher propensity for
lightweight studded jewellery. Across all
regions, however, there is a universal rise
in demand for daily-wear and occasion-
led designs, a segment where BlueStones
omnichannel presence provides a distinct
competitive advantage in brand visibility.

The market is also shifting
meaningfully in terms of occasion
and consumer profile.

Wedding jewellery remains the largest
segment by volume, but daily-wear and
occasion-led categories are the true growth
engines. Young urban buyers increasingly
view jewellery as a fashion accessory rather
than a static status symbol, which has
led to a decline in golds share from 87%
to 81% in favour of diamonds and 14k/18k
gold. Rising Female labour participation is
driving demand for minimalist, Western-
style pieces such as rings, chains, and
earrings, that offer practical elegance for
everyday wear. Category depth continues
to diversify, with the product assortment
varying significantly by occasion: daily-wear
and occasion-led pieces are dominated by
lighter-weight items such as earrings, rings,
and chains.

The broader shift from unorganised
to organised retailing is not merely
a change in market share; it is a
fundamental re-engineering of the
value chain.

Historically, the sector has been held
back by systemic inefficiencies: reliance
on imports for gold and gemstones,
domination by small-scale informal
manufacturers with limited access to credit
and technology, and a significant trust
and accessibility gap with consumers.
Government reforms, including mandatory
BIS hallmarking, PAN card requirements,
and GST mandates, are raising the bar
for informal operators. A more informed,
digitally savvy demographic is now seeking
the reliability, design innovation, and
transparent practices offered by organised
national and omnichannel brands.

Rising preference of non-gold
jewellery:

Driven by a move toward casual and
contemporary aesthetics, the market share
of pure gold is softening, as consumer
preferences are migrating from traditional
gold to diamonds and alternative materials.
This shift reflects a fundamental evolution
in the consumer mindset, transitioning
jewellery from a static "savings asset" to a
dynamic "style statement."

The Omnichannel Model in
Jewellery: Complexity, Technology,
and Benefits

Online channels have fundamentally de-
risked the high-value jewellery purchase
by empowering consumers with the ability
to discover, compare, and personalise
before committing. Online research now
routinely precedes the physical store visit,
with consumers seamlessly transitioning
between touchpoints: researching designs
online, comparing prices across platforms,
then confirming availability before visiting a
store. For brands, maintaining accurate, live
inventory data is no longer optional; it is a
prerequisite for driving store conversions.

Building a true omnichannel experience in
jewellery is significantly harder than in most
other retail sectors. The complexity of SKU
Management, the high-value nature of the
goods, and the need for consistent service
standards across touchpoints create substantial
operational demands. Coordinating inventory,
production, and delivery to provide a unified,
real-time view requires a sophisticated
technology stack that most regional or
traditional players lack. For the online interface
specifically, a high-fidelity digital experience
is not a luxury; it is a requirement. Customers
need to view products from multiple angles
with microscopic detail before committing to a
high-value purchase.

The Branded shift: A more informed, digitally
savvy demographic is increasingly seeking
the reliability and service standards offered by
organized national and omnichannel brands.
Further, branded players are leading the way
by capitalizing on their design superiority and
transparent practices.

2024 2029P

When executed well, the omnichannel
model delivers a multi-dimensional boost to
operational and financial performance. Physical
stores serve as experience centres that convert
online interest into high-value sales, while
digital channels dismantle geographical barriers
and reach a national audience. Performance
marketing allows for targeted, one-on-one
engagement at a fraction of the cost of
traditional campaigns, significantly improving
return on investment and customer lifetime
value. Real-time tracking across all channels
optimises stock levels and streamlines logistics.

Higher Returns

Online jewellery retailers often experience higher i

return rates compared to other online products. \

Customers might order multiple pieces to compare [

size and style, leading to a higher volume of returns ¹

and related costs. i! Need for touch and feel

i Accurately portraying jewellery pieces

! intricacies, sparkle, and dimensions
through online photographs and videos
can be difficult, leading to hesitation in
buying online

Trust Deficit

[ Jewellery is a high-value,
emotionally driven
purchase. Without the ?

[ physical interaction of a
¹ brick-and-mortar store,
online retailers could

struggle to build trust
and brand recognition
with potential customers.

Competition from Established Brands ¹

Many established jewellery brands are now
offering a strong online presence alongside their
brick-and-mortar stores. These brands leverage !
their existing brand recognition compete j

effectively with pure-play online reatailers. ¹

M

I

Lack of Assisted Buying

Building rapport and
providing personalised
customer service can be
more challenging in a
i purely online environment.
Customers also require in-
person assistant for a high
value items like jewellery
¹ which pureplay online players
i are unable to provide.

Although online penetration in Indian jewellery currently trails global averages, it is poised for an inflection point.

By blending technological innovation with personalised engagement, the omnichannel model prioritises trust and
operational efficiency in equal measure. As the market trends toward a 55-60% share for daily-wear and occasion-wear by
2029, the industry winners will be those who can marry the trust of traditional jewellery with the trend and technology

demanded by the modern, omnichannel consumer.

Company

Overview

About BlueStone - Jewellerys
omni channel powerhouse

BlueStone Jewellery & Lifestyle Limited is a
digital-first, Direct-to-Consumer jewellery
brand that has redefined how modern
India buys jewellery. As the second-largest
digital-first omnichannel jewellery brand in
India (as per RedSeer report), the Company
has successfully evolved from a pioneering
online platform into an integrated online-
offline ecosystem.

BlueStones competitive position is built
on a design-first philosophy. In a market
shifting toward discretionary and lifestyle-
led consumption, the company prioritizes
design innovation over metal value.

Its in-house team of over 25 designers

works directly with manufacturing to
launch frequent, trend-aligned collections,
supported by a library of over 15,000 active
designs spanning across gold, diamond,
gemstone, and platinum. This design depth
ensures the catalogue remains relevant to
the evolving preferences of the modern
Indian consumer.

The Company has moved beyond multi-
channel selling to build a true omnichannel
model, one that delivers a unified brand
experience across every touchpoint. As of
31^st March, 2026 BlueStones retail network
spans 340 stores across 134 cities, backed by
a robust digital presence through its website
and mobile applications. Store locations are
selected through a data-led strategy that has
consistently optimized payback periods and

delivered strong success rates across both
premium mall and high-street formats.

This integrated approach drives high-intent
footfall from digital discovery to physical
experience centres.

At its core, BlueStone operates as a
technology company that manufactures
jewellery. Its proprietary systems
unify design, manufacturing, and
retail operations, enabling real-time
data analytics, personalized customer
engagement, and leaner inventory
management. Vertical integration
eliminates third-party dependencies and
has given BlueStone the fastest design-
to-shelf turnaround time among Indias
leading jewellery retailers, a meaningful
advantage in capitalizing on fashion cycles.

BlueStone has carved out a clear brand
identity around "Designer Everyday Luxury,"
for customers who value authenticity,
transparent pricing, and self-expression. Its
stores function as consultative experience
centres rather than transactional points of
sale, offering a personalized and intimate
purchase journey. A presence spanning
metros and Tier 2+ cities ensure the
Company captures both urban demand
and the emerging growth story in smaller
markets.

By controlling the entire value chain, from
digital discovery to in-store experience,
BlueStone is positioned to lead the
institutionalization of Indias jewellery
market. Its model directly addresses the
long-standing industry challenges of trust
and transparency, while delivering the
design-led innovation that the modern
Indian consumer increasingly demands.

Performance

Review

Standalone Financials

Particulars	F.Y. 2026	F.Y. 2025	Growth %
Revenue from Operations	24,412.30	17,700.02	37.9%
EBITDA	3,944.55	758.85	419.8%
EBITDA Margin (%)	16.16%	4.29%	1,187 bps
PAT / (Loss)	260.00	(2,192.14)	NM

Consolidated Financials

Particulars	F.Y. 2026	F.Y. 2025	Growth %
Revenue from Operations	24,364.24	17,700.02	37.7%
EBITDA	3,839.41	731.63	424.8%
EBITDA Margin (%)	15.76%	4.13%	1,162 bps
PAT / (Loss)	131.79	(2,218.37)	NM

Key Highlights

1. Strong, broad-based topline growth

- Revenue from operations grew by
37.9% and 37.7% on standalone and
consolidated basis, reflecting the
continued scaling of the Companys
omnichannel network and expanding
category presence across price-
points, with a sharpened focus at the
entry level. Growth was broad-based,
supported by both new store addition
and healthy SSSGs across cohorts.

Same-store sales growth for the year
reflected the resilience of the underlying
model, notwithstanding a period of
significant gold price escalation that
dislocated merchandise-particularly
at the entry level-across the industry
during the year. The Companys
vertically integrated model enabled a
rapid response, including the redesign
and re-population of the entry-level
portfolio, the benefits of which began to
reflect in the latter part of the year and
are expected to flow through into FY27.

2. Expansion of retail footprint - Our

distribution footprint expanded to 340
stores across 134 cities as at 31^st March
2026, with 65 new store additions during
the year, reflecting both breadth (new
cities) and depth (higher store density
in existing markets). The expansion was
balanced between new and existing
geographies and malls vs high-street
formats.

3. Operating leverage coming through

- The Company demonstrated
meaningful operating leverage
during the year. On a standalone level,
reported EBITDA rose to 43,945 million
in FY26, a growth of 419.8% over the
prior year, with the corresponding
margin improvement of 1187 bps. This
improvement was driven primarily by
store vintage and productivity gains on

a largely fixed cost base, complemented
by common cost efficiencies across
corporate overheads and advertising
and marketing spends as revenue
scaled.

Advertising and marketing costs were
contained at 6.6% of sales in FY26, as
against 9.0% in FY25, reflecting the
Companys ability to drive growth

without a proportionate increase in
tactical marketing spends-supported
by a strong share of repeat revenue. We
believe the fixed cost base remains only
partially leveraged, leaving headroom for
further operating margin expansion over
the medium term.

4. Decisive turnaround to profitability

- Reflecting the operating leverage
described above, the Company reported
PAT of 4260 million in FY26, a significant
turnaround from a loss of 42,192 million in
FY25. The reported profitability continues
to absorb certain non-cash charges. ESOP
expense for FY26 was 4927 million; this
charge has been front-loaded under the
current grant cycle and is expected to
decline materially from FY27 onwards,
with the reduction flowing through to
reported EBITDA and PAT in subsequent
years.

5. Strengthened balance sheet - The

balance sheet strengthened significantly
during the year, aided by the successful
completion of IPO and improving internal
accruals. Net debt reduced to 43,469
million as at 31^st March 2026 from 46,171
million a year earlier. Return on Capital
Employed turned positive at 8.6%, as
against (4.7)% in FY25, reflecting both the
return to profitability and more efficient
capital deployment. The increase in net
worth and reduction in debt levels versus
previous year are signs of a strong balance
sheet.

6. A robust foundation for the next phase
of growth - The Companys net worth
was materially augmented during the
year following the equity raised through
the IPO, providing a strong and well-
capitalized Balance Sheet to support the
Companys growth ambitions. Beyond the
reported financials, we continue to invest
in the long-term equity of the BlueStone
brand-through our design-led, "jewellery
for the wardrobe" positioning, deepening
omni-channel consumer engagement,
and a growing base of loyal, repeat
customers. A high repeat revenue ratio
and an expanding lifetime customer base
of over 9.4 lakh customers underscores
the strength of the franchise, which we
regard as a key intangible asset and a
durable source of competitive advantage.

Opportunities

1 Shift from unorganized to

organized retail

The Indian jewellery market is rapidly
formalizing. BlueStone is positioned to
capture market share from traditional,
unorganized family jewelers as consumers
increasingly demand transparency,
hallmarking, and brand trust.

3 Digital-First Consumer Behavior

With high smartphone penetration, more
consumers "browse online" before buying.
BlueStones digital-first DNA allows them to
capture top-of-funnel interest through their
website and app.

3 Rising Demand for Lifestyle, Daily &
Occasion wear Jewellery

Unlike traditional players focused on heavy
wedding jewellery, BlueStone capitalizes on
the growing segment of daily & occasion
-wear and self-purchase jewellery. This
category is growing at nearly double the
rate of the overall market (15-18% CAGR) as
younger, urban consumers view jewellery
as a fashion accessory rather than just a
financial asset.

Expansion in Underpenetrated Cities

Tier-II and Tier-111 cities are seeing increased
disposable income and evolving tastes but
remain underserved by branded jewellery
players.

Omni-channel Retailing

BlueStone has built a truly digital-first
jewellery retail model, where online
discovery meets offline trust. Customers are
acquired through our strong digital presence
and then engaged through physical stores
and services like video consultations. This
integrated approach not only offers a
seamless shopping experience but also
optimizes inventory and capital efficiency,
making omni-channel our core competitive
edge.

^ 6 Fast evolving fashion trends and
price volatility

In a volatile gold price environment, there is
a massive opportunity to capture budget-
conscious consumers. BlueStones vertically
integrated operations and manufacturing
capabilities allows us to redesign and
reinvent to capture lower price points still
using premium designs much faster than
industry average.

Threats

Economic conditions

The jewellery industry is highly
sensitive to broader economic
conditions. While economic stability
and growth typically leads to higher
disposable incomes and increased
consumer spending power, which
boost jewellery sales; economic
downturns can lead to reduced
discretionary spending, directly
impacting jewellery demand.

High interest rates raise the cost
of borrowing for both jewellers
and consumers, making it more
expensive to finance operations and
purchases. Furthermore, investors
may shift their preferences to
financial instruments with better
returns, diminishing the appeal of
gold and jewellery as investments.

Price Volatility in Precious
? Metals and Gemstones

Fluctuations in gold and diamond
prices can impact both input
costs and consumer demand as
high prices lead to postponed or
cancelled purchases and consumers
may opt for lighter or less expensive
pieces.

A Intensifying Competition

National jewellery chains, regional
brands, and emerging D2C players
are all vying for market share.
Aggressive pricing, promotional
campaigns, and expansion by
competitors can compress margins
and limit customer acquisition.

\y- -

Changing Consumer Preferences

A fast-evolving fashion landscape
requires constant product
innovation. Delays in anticipating or
responding to design trends could
affect sales.

Outlook

Store Network Expansion

The company plans to significantly increase
its retail footprint in F.Y. 2027, with a
strategic focus on driving both density and
expanding geographical footprint across
tiers. In addition, we have also opened
two dedicated stores to Mens and Kids
category in the year as this remains a largely
underserved category in the country. We
see healthy traction in such formats will
continue to expand in this domain as well.

Product Portfolio Diversification

Beyond our core daily and occasion-wear
lines, we aim to scale our product portfolio
across sub-categories, price points and
materials applying our modern, design-
led aesthetic to meet diverse cultural
preferences across India. This evolution will
allow us to capture the entire customer
lifecycle, ensuring BlueStone remains the
preferred jeweller as our patrons tastes and
requirements mature over time.

Deeper Omni-channel Integration

Further integration of online and offline
channels will enable seamless inventory
visibility, virtual design consultations, and
personalized marketing, enhancing the
customer journey and conversion rates.

Brand investments

We view advertising and marketing not
merely as an acquisition cost, but as a
strategic investment in long-term brand
equity. We will continue to scale our
presence across digital and traditional
media to ensure BlueStone remains the
"top-of-mind" destination for the modern
jewellery consumer. Through high-impact
campaigns and premium storytelling, we
will continue to distinguish ourselves from
traditional retailers, positioning BlueStone
as a contemporary lifestyle brand rather
than a purely transactional jeweler.

Operational Efficiencies

Continued investment in supply chain
technology, vendor partnerships, and
design automation will reduce costs and
improve margins as operating leverage
continues to flow through as scale expands.

Details of Significant Changes in Key Financial Ratios

(changes of 25% or more as compared to the immediately previous Financial Year):

Ratios	As at 31 March 2026	As at 31 March 2025	YoY change %	Explanation for the variance
Current Ratio	1.66	1.24	34%	Movement due to increase in current assets during the year.
Debt to equity	0.92	1.67	(45%)	Movement due to increase in share capital (fresh issue) during the year.
Debt service coverage ratio	0.14	(0.01)	NA	Movement due to profitability during the current year.
Return on Equity Ratio	1.9%	(34.05%)	NA	Movement due to increase in equity and profitability during the current year.
Inventory Turnover Ratio	0.65	0.83	(22%)	NA - as the variance is less than 25%
Trade receivables turnover ratio	372.59	443.48	-16%	NA - as the variance is less than 25%
Trade payables turnover ratio	11.03	7.82	41%	Movement on account of decrease in trade payables
Net Capital Turnover Ratio	2.68	10.99	(76%)	Movement on account of increase in revenue and inventory
Net Profit Ratio	1.07%	(12.38%)	NA	Movement due to increase in revenue and profitability in current year
Return on Capital Employed	11.20%	(0.95%)	NA	Movement on account of profitability and increase in capital employed
Return on Investment	0.53%	(6.20%)	NA	Movement on account of profitability
Basis standalone financials reporting

Risks and
Concerns

BlueStone operates in a dynamic business
environment where multiple internal and
external factors can influence performance.
One key risk is the dependency for
sourcing raw materials such as gold,
diamonds, and gemstones, as well as for
certain manufacturing processes. Any
disruption in supply or deterioration in
quality could delay production and affect
customer satisfaction. The Company is
therefore expanding its vendor base and
strengthening long-term relationships to
ensure business continuity.

n Supply chain and sourcing

1 dependency

Our operational efficiency is closely tied to
the consistent availability of high-quality
raw materials, including gold, diamonds,
and gemstones. Any disruption in the
supply chain or a drop in material quality
could lead to production delays and
diminished customer satisfaction. We are
actively diversifying our vendor base and
fostering long-term strategic partnerships
to ensure business continuity and maintain
stringent quality standards.

I Evolving trends

The industry is subject to immense
volatility and needs to keep pace with
evolving global and regional fashion trends
& adoption of new materials/components
such as LGDs. The risk pertains to its
impact on the sales and growth of our
product portfolio. We actively monitor
industry and fashion trends. We ensure our
catalogue of products is refreshed regularly
to keep up with the trends. Furthermore,
we have a Subsidiary Ethereal House
Private Limited which operates in lab
grown diamonds.

Regulatory & Compliance Volatility

The jewellery sector is subject to frequent
and significant regulatory shifts. Changes
in import duties, hallmarking mandates,
foreign trade policies, and GST structures
can abruptly alter cost bases and
necessitate changes in pricing strategies.
BlueStone actively monitors policy
developments and engages with industry
associations to adapt swiftly.

^R^- Commodity Price Fluctuations

Our cost structure is highly sensitive to the
global market prices of precious metals
and gemstones. Sharp volatility in gold and
diamond prices, driven by global economic
trends, impacts consumer affordability,
increases working capital requirements,
and may compress margins. We employ
prudent sourcing and inventory management
practices, coupled with dynamic hedging
models, to protect us against extreme price
movements.

r 5)- Macroeconomic volatility

Events such as inflation spikes, currency
depreciation, or geopolitical disruptions can
weaken consumer sentiment, especially
for high-value discretionary categories like
jewellery.

^R6- Intensifying Competitive Landscape

The Indian jewellery market is witnessing
aggressive expansion from national chains,
regional players, and new D2C entrants.
increased competition in pricing, aggressive
promotions, and higher marketing spend by
peers can escalate customer acquisition costs
(CAC) and exert pressure on profitability. Our
focus remains on design-led differentiation
and a superior, tech-integrated customer
experience to maintain brand loyalty and a
competitive edge.

(Ry)- Seasonality

Jewellery consumption in India is deeply
rooted in cultural cycles, with peak demand
occurring during festive and wedding seasons.
We are strategically expanding our non-
seasonal portfolios, such as "Everyday Wear"
and gifting collections, to stabilize demand
and revenue streams throughout the year.
Further, our demand and production planning
considers the seasonality of the business, and
our manufacturing facilities have sufficient
capacity available to cater to seasonal spikes.

r8)- Cybersecurity and Data Privacy

With its strong digital and omni-channel
presence, BlueStone handles large volumes
of customer data and financial transactions,
making cybersecurity and data privacy
critical concerns. Any breach could result
in operational disruption, legal liabilities,
and reputational damage. Robust security
protocols and continuous monitoring help
mitigate these risks.

- Internal Control

Systems and Adequacy

BlueStone has established a
comprehensive internal control framework
designed to safeguard assets, ensure
the accuracy and reliability of financial
reporting, and promote operational
efficiency. These controls are aligned with
industrys best practices and statutory
requirements under the Companies Act,
2013.

[ 01 Structured policies and procedures -

All key operational and financial processes
are governed by documented standard
operating procedures, ensuring uniformity
and compliance across the organization.

[02 Technology enabled monitoring -

The companys ERP and POS systems
integrate inventory, sales, procurement,
and accounting, enabling real-time
monitoring and reducing the scope for
manual errors.

[ 03 Independent Internal Audit function -

A dedicated Internal Audit Team,
supplemented by external audit firms
where required, conducts periodic reviews
of processes and transactions, with findings
reported directly to the Audit Committee of
the Board.

[ 04 Risk Management Framework -

The internal control environment is
linked to BlueStones risk management
framework, ensuring that high-risk areas,
including inventory handling, vendor
management, and cybersecurity, receive
enhanced oversight.

[ 05 Management oversight -

Monthly management reviews monitor
business performance, control adherence,
and key risk indicators, with variances
promptly investigated and corrective
actions implemented.

^06 Board-level Governance -

At the board level, the Audit Committee
provides strategic oversight, reviews audit
reports, and monitors the implementation
of recommendations, reinforcing
accountability at the highest level.

The Board believes that these internal
controls are adequate and commensurate
with the size, scale, and complexity of
BlueStones operations, and they are
continually enhanced to adapt to business
growth and technological advancement.

Human Resources

BlueStones human capital is one of its
most critical assets, given the highly
customer-facing and design-led nature of
the jewellery business. The company places
strong emphasis on attracting, retaining,
and developing talent across its retail,
corporate, and manufacturing operations.

^ 01 Workforce Composition - As of 31^st March
2026 BlueStone employed 2,576 full-time
employees, including store managers, sales
associates, jewellery consultants, designers,
merchandisers, manufacturing specialists,
and corporate staff.

[ 02 Organization Structure - The organization
has been structured to remain nimble with
right incentive structures to strengthen
accountability, improve strategic alignment,
and create a scalable operating model for
growth.

[ 03 Training & Development - Employees
undergo structured training modules
covering product knowledge, design
trends, customer engagement, technology
tools, and compliance requirements. Store
staff receive ongoing training on product,
consultative selling and personalized
service delivery.

[ 04 Performance Management -

Performance is managed through a
transparent, outcome-linked appraisal
system that ties individual and team goals
to business results, with incentives aligned
to key metrics such as sales conversion
rates, customer satisfaction scores, and
inventory management efficiency.

[ 05 Culture and Engagement - BlueStone

promotes a collaborative, inclusive culture
that encourages creativity and innovation.
Town halls, feedback sessions, and cross-
functional projects foster employee
engagement and a sense of ownership.

[ 06 Diversity & Inclusion - The workforce
reflects diversity across gender, age, and
background, with women contributing
approximately 39% of total headcount.
Initiatives are in place to encourage
greater female representation in
leadership roles and to provide flexible
working arrangements where applicable,
underpinned by a no-discrimination policy
across all aspects of business operations.

[07 Employee Wellbeing- Employee

wellbeing is an integral part of the
HR strategy, encompassing health
and wellness benefits, counselling
services, caretaker support, and a
strong focus on safe and hygienic
work environments. The company
recognises that employee satisfaction
directly shapes the customer
experience.

[08 Talent Retention - On talent retention,
disciplined churn management,
stronger pre-hire selection, and
competitive performance-linked
compensation (including ESOPs) are
improving talent density and reducing
attrition rates, while active investment
in high-performing individuals builds
the leadership pipeline from within.

BlueStone views its people as brand
ambassadors who shape the customer
experience, and continues to invest
significantly in their professional
growth, workplace satisfaction, and
long-term career development.