Divine Hira Jewellers Ltd Management Discussions

• INDUSTRY STRUCTURE AND DEVELOPMENTS

The global jewellery industry continues to grow steadily, led by demand in Asia-Pacific, with India and China contributing the largest share. Rising disposable incomes, shifting consumer preferences toward branded products, and the tradition-driven demand for gold jewellery underpin the sectors resilience. In India, the organised jewellery market is witnessing accelerated growth due to mandatory hallmarking, consumer trust in certified products, and increasing penetration of lightweight and contemporary jewellery among younger demographics. The Indian market is also experiencing rising interest in platinum and diamond jewellery, complementing the strong base of gold. Overall, the industry outlook remains robust, supported by favourable demographics, cultural affinity, and digital adoption in retail.

• OPPORTUNITIES AND THREATS

The opportunities before the Company are driven by Indias growing middle class, rising wedding and festive consumption, and an increasing preference for lightweight and designer jewellery. The introduction of platinum products and the consistent expansion of gold bar sales position Divine Hira to capture diversified consumer segments. However, the business is also exposed to threats, including volatility in gold and precious metal prices, regulatory changes, global economic uncertainties, and heightened competition from established organised players and local unorganised jewellers. Managing these risks through hedging, agile pricing, and strong brand positioning remains critical to sustaining growth.

• SEGMENT-WISE AND PRODUCT-WISE PERFORMANCE

During F.Y. 2023-2024, Divine Hira Jewellers recorded stable growth across its core segments, driven largely by sales of gold jewellery and bars. The momentum accelerated in F.Y. 2024-2025, with revenue increasing by 95.8% compared to the previous year, reaching Rs246 crore. This growth was primarily attributable to higher sales of gold bars and jewellery, coupled with the successful introduction of platinum bars as a new product line. Jewellery sales alone witnessed a 71% year-on-year increase in F.Y. 2024-2025 compared to F.Y. 2023-2024, reflecting both consumer preference for contemporary designs and the brands strong positioning in key markets. The Companys flagship operations in Zaveri Bazar, Mumbai, supported by expanding wholesale and retail relationships in Tier-I and Tier-ll cities, contributed significantly to this performance.

• DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECTTO OPERATIONAL PERFORMANCE

The financial performance of the Company in F.Y. 2024-2025 mirrored the operational progress achieved during the year. Revenue growth of 95.8% was matched by a 274.9% surge in net profit, driven by improved sales volumes, an expanded product portfolio, and disciplined cost management. The introduction of new high-value products like platinum bars provided incremental revenue streams, while inventory management efficiencies enhanced turnover. The Current Ratio improved from 1.50 in F.Y. 2023-2024 to 2.97 in F.Y. 2024-2025, reflecting stronger liquidity. Debt-to- equity reduced significantly from 1.90 to 0.44, highlighting balance sheet strengthening post-IPO. Net Profit Margin nearly doubled from 0.80% in F.Y. 2023-2024 to 1.54% in F.Y. 2024-2025, underscoring improved operational efficiency despite gold price volatility.

• INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Divine Hira Jewellers has established internal control systems designed to ensure accuracy in financial reporting, safeguarding of assets, and strict compliance with applicable laws and regulations. Regular internal and statutory audits are carried out to review the effectiveness of these controls, while ERP-enabled processes strengthen supply chain visibility and inventory management.

• MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS

Human capital remains at the heart of the Companys growth journey. As of F.Y. 2024-2025, Divine Hira Jewellers employed nine people, including skilled artisans, operational staff, and management professionals. The Company recognises the importance of artisan welfare and is committed to providing training in modern design techniques, CAD/CAM tools, and craftsmanship upgrades while preserving traditional artistry. Industrial relations remained cordial throughout the year, with no disruptions in operations. Going forward, management intends to gradually scale its

workforce in line with retail and wholesale expansion, ensuring that employee development remains aligned with business growth.

• DETAILS OF SIGNIFICANT CHANGES IN KEY RATIOS

THE YEAR UNDER REVIEW WITNESSED NOTABLE IMPROVEMENTS IN FINANCIAL RATIOS, REFLECTING THE COMPANYS OPERATIONAL EFFICIENCY AND FINANCIAL DISCIPLINE. THE DEBT-TO-EQUITY RATIO IMPROVED SIGNIFICANTLY FROM 1.90 IN F.Y. 2023-2024 TO 0.44 IN F.Y. 2024-2025, DRIVEN BY STRENGTHENED EQUITY POST-IPO AND PRUDENT DEBT MANAGEMENT. NET PROFIT MARGIN INCREASED FROM 0.80% IN F.Y. 2023-2024T01.54% IN F.Y. 2024-2025, AIDED BY IMPROVED PRODUCT MIX AND COSTOPTIMISATION

• RETURN ON NET WORTH

The Return on Net Worth (RoNW) demonstrated a strong upward trajectory, increasing from \~9.5% in F.Y. 2023-2024 to \~15.1% in F.Y. 2024-2025. This improvement was primarily driven by higher profitability, improved asset utilisation, and stronger equity capital following the IPO. The rise in RoNW reflects the Companys ability to deliver enhanced shareholder value while maintaining a conservative financial profile.

• RISK

The jewellery sector remains sensitive to volatility in gold prices, regulatory compliance, and shifting consumer preferences. However, Divine Hira Jewellers has mitigated these risks through active hedging practices, agile pricing models, and a product strategy that caters to diverse income segments. Compliance with mandatory hallmarking requirements has been smoothly integrated across operations, strengthening customer trust and product authenticity. With the upcoming festive and wedding seasons providing visibility of strong demand, F.Y. 2024-2025 is expected to build upon FY..2024-2025 momentum, supported by new store additions, deeper wholesale penetration, and a continued focus on lightweight, contemporaryjewellery.

• OUTLOOK FOR F.Y. 2025-2026

Looking ahead, Divine Hira Jewellers is poised to build on the strong foundation laid in the previous two years. With Indias jewellery demand expected to remain robust during the festive and wedding seasons, the Company aims to expand its retail and wholesale presence in Tier-ll cities while strengthening international partnerships in the Middle East. Product innovation will remain a core priority, with further launches in platinum jewellery and lightweight gold collections. Backed by disciplined financial management, technology-driven efficiency, and a strong brand reputation, the Company remains confident of sustaining its growth trajectory and delivering long-term value for stakeholders.