Goldiam International Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

This report covers the operations and financial performance of the Company for the year ended March 31,2025. The Company has two segments viz. jewellery manufacturing and investment activity. The contribution of Jewellery manufacturing segment to the total standalone turnover of the Company was 97.30% during the FY 2024-25 and residual portion was contributed by investment activity.

Business Segment:- Gold, silver Jewellery and diamonds

INDUSTRY STRUCTURE AND DEVELOPMENTS:

The gems and jewellery industry plays a vital role in the Indian economy. It contributes about 7 percent of the GDP and employs more than five million skilled and semi-skilled workforces in the country. The sector contributes about 15.71% of Indias total merchandise exports, accounting for the third largest commodity share. The Government of India declared the gems and jewellery industry as a focal point for exports. India is considered a global hub for low costs and inexpensive skilled labour.

For India, the growth outlook is relatively more stable at 6.2% in 2025, supported by private consumption, particularly in rural area. However, on account of higher levels of trade tensions and global uncertainty, GDP growth is expected to slightly moderate to 6.2% in 2025 and 6.4% in 2026.

The sector is projected to grow at a compounded annual growth rate (CAGR) of 5.7% over the next decade, reaching about USD 124.70 billion by 2030. This growth reflects the expanding middle class, increasing disposable incomes, and a strong inclination towards gold and diamond jewellery as part of cultural and marriage-related traditions.

According to the IMF, India is projected to become the third-largest economy by 2027 in USD terms at market exchange rates The combination of a sustained anti-inflationary monetary policy stance and proactive supply management measures has kept headline inflation largely within the tolerance band.

India is one of the largest exporters of gems and jewellery and it contributes a major chunk to the total foreign reserves of the country and also one of the fastest growing industries in the country. It is extremely export oriented and labour intensive.

The overall gross exports of gem & jewellery from April 2024- March 2025 stood at US$ 28500 million, showing a decline of 11.71% in dollar terms as compared to US$ 32280 million in FY 2023-24.

OPPORTUNITIES:

a) Product Diversification

We continue to diversify our product portfolio, with a focus on launching exclusive, high-margin, and trend- aligned items. For instance, Lab Grown Diamonds have been performing well and show strong potential. We see opportunities to build on this success by expanding into similar high potential categories that align with our inhouse brand(ORIGEM) and customer base.

b) Technology-Driven Engagement

Emerging technologies such as AI, machine learning, and augmented reality offer opportunities to personalise the customer journey, improve recommendations, and enable immersive shopping tools like virtual try-ons. At Goldiam, we are actively leveraging these technologies. These innovations can help boost conversion rates and customer satisfaction.

c) Government Initiatives

Based on its potential for growth and value addition, the Government declared gems and jewellery sector as a focus area for export promotion. The Government has undertaken various measures recently to promote investment and upgrade technology and skills to promote ‘Brand India in the international market.

The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or Government of India.

The Indian government accepted the recommendation of GJEPC to promote indigenous manufacturing in the emerging Lab-grown diamond sector by providing research grants to the Indian Institute of Technology (IIT) for five years.

The Government has reduced custom duty on cut and polished diamond and coloured gemstones from 7.5% to 5% and NIL, that will help the gems and jewellry exports market in India become globally competitive. The Bureau of Indian Standards (BIS) has revised the standard on gold hallmarking in India from January 2018 to include a BIS mark, purity in carat and fitness, as well as the units identification and the jewellers identification mark on gold jewellery. The move is aimed at ensuring stringent quality check on gold jewellery. The Government has made hallmarking mandatory for gold jewellery and artefacts. The Government of India has recently laid out four steps to grow the gems and jewellery industry in the country. The focus is to be given to the creation of patented designs to increase value, diversification of the exported products, collaboration with other nations for cost- effective methods and promotion of lab-grown diamonds. In addition to this, the GJEPC (Gems Jewellery Export Promotion Council) arranges several trade shows, buyer-seller meets and expositions to increase the exposure of Indian goods.

THREATS:

The growth trend of the diamond industry continued fueled by strong demand for rough diamonds amid continuing geo-political tensions and sanctions imposed on Russia, steady recovery in key export destinations such as USA, Europe, Israel, among others, resilient consumer & business sentiment, easing of almost all covid-19 restrictions pertaining to manufacturing in the domestic market. However, the diamond outlook for the 2025 remains uncertain with concerns rose about Russian sanctions, inflation and supply chain issues.

Labor costs affect nearly every industry, including the jewelry market. Rising labor costs are stagnating the gems and jewelry industries, and those price increases trickle down to affect the cost of the final product, creating significant challenges.

The Company is exposed to risk in exchange rate fluctuations as the Company is dependent on exports sales. However, the Company closely monitors and takes appropriate steps to reduce such risks.

Competition which has always been a challenge is countered by better quality and designs, branding, catering to changing customer demands/styles and cost control measures. Increasing prices of raw materials have affected and can affect the profit margins. However, the Company continuously thrives for improved production efficiency to counter this risk as far as possible.

STRENGTHS:

d) Wide Range of Products:

Offering a diverse range of jewellery products, from traditional to contemporary designs, caters to various customer preferences, enhancing market reach.

e) Digital Presence:

An integrated online platform complements physical stores, enabling seamless shopping experiences and capitalising on the burgeoning trend of digitally originated business. Goldiam distinguished Board of Directors comprises individuals from diverse backgrounds, bringing a wealth of experience and expertise.

f) Omni-Channel Presence

We have built a strong presence across multiple platforms -websites, mobile apps, social media, and third-party marketplaces. This mix helps us stay connected with customers wherever they choose to shop.

g) In-House Manufacturing

Having our own production setup helps us stay nimble. We can respond to trends faster and bring new designs to market without long lead times.

h) Vertically Integrated Supply Chain

Our supply chain model gives us flexibility and control. With both in-house manufacturing and global sourcing, we can navigate quickly, manage costs better, and stay resilient even when supply conditions change.

i) Scalability and Expansion

Our business model is designed to scale. Whether it is entering a new country or expanding a product line, the systems are in place to grow without needing to rebuild the system. This scalability enables us to respond quickly to new opportunities, replicate successful models across geographies, and efficiently manage expansion while maintaining operational consistency and cost-effectiveness.

RISKS AND CONCERNS:

Risk management is integral to your Companys strategy and to the achievement of Goldiams long-term goals. The nature of the Companys business exposes it to several inherent risks and concerns. The Company strives to closely monitor the risks and to mitigate them by adopting suitable, pragmatic strategies.

a) Bullion Risk:

The volatility in the gold prices exposes the Company to bullion risk as gold forms approximately 30% to 50% of the cost of the finished product.

b) Raw Material Supplies Risk:

Though India plays a dominant role in the Gems & Jewellery industry in terms of processing and consumption, mining of gold and diamond is amongst the lowest in the world.

India imports gold and rough diamonds along with other precious metals.

c) Laboures availability Risk:

Gems and jewels industry is a highly labour-bounded and export-oriented sector. The labourers shifted back to their native places due to Covide-19 and lockdown, which is resulted non- availability of Laboures

d) Currency Risk:

Currency risk arises from exposure to foreign currencies and the volatility associated therewith. 100% of our exports have been transacted in US Dollars. While the Company hedges majority of its receivables, any sharp fluctuation in currency is likely to affect the cash flow of the Company as well as its profitability.

e) Geography Risk:

Dependence on any geographic location makes the Companys business in that region vulnerable to the economic slowdown therein. While USA continues to be our prime export destination.

f) Margin risk:

Lack of control over the cost, may lead to lower profitability and can impact future growth prospects. OUTLOOK:

Moving forward, Goldiam projects GDP growth to remain steady at 6.4% in FY26, despite potential headwinds arising from geopolitical developments and global trade uncertainties, including tariff actions by the United States. Factors expected to support growth include easing food inflation, tax incentives announced in the Union Budget 2025-26, and lower borrowing cost, all of which are expected to boost discretionary consumption.

Elevated gold rates could see shifts in demand segments. Gold prices are expected to remain high, given the geopolitical and macroeconomic uncertainties globally. The Company will continue to prioritise topline growth driven by market share gain with sustained investments in retail expansion, product assortment in stores, new collections, manufacturing excellence and visible marketing.

As the Company looks ahead to Financial Year 2025-26, the Company remains confident in the long-term growth trajectory of our businesses, supported by strong and aspirational consumer base, increasing formalisation of the economy and the deepening reach of digital commerce. While global macroeconomic uncertainties and geopolitical tensions may persist, the Company is confident of its diversified portfolios, agile execution capabilities, and deep customer insights which would help in navigating to the evolving environment. The Companys continued investments in innovation, customer experience, digital transformation, and omni-channel presence would further strengthen its competitive edge. Backed by the trust in the Companys brand, the commitment of its employees, and the resilience of the retail, distribution, and vendor ecosystems, the Company is optimistic that Financial Year 2025-26 would be a year of strong, profitable, and sustainable growth.

INTERNAL CONTROL AND ITS ADEQUACY:

The Company has proper and adequate systems of internal controls in order to ensure that all assets are safeguarded against loss from unauthorised use or disposition and that all transactions are authorised, recorded and reported correctly. Regular internal audits and checks are carried out to ensure that the responsibilities are executed effectively and that adequate systems are in place. The Management continuously reviews the internal control systems and procedures to ensure orderly and efficient conduct of business. The emphasis of internal control will be further strengthened across functions and processes, covering the entire gamut of activities including manufacturing, finance, supply chain sales & distribution, marketing etc. The Company has adopted Risk Management Policy.

FINANCIAL PERFORMANCE:

During the financial year ended March 31,2025, your Company recorded a consolidated turnover of Rs.78097.82 lakhs as compared to the turnover of Rs.60286.98 lakhs in the previous financial year ended March 31,2024 thereby consolidated turnover increased by 29.54% over previous year. The consolidated Profit before tax and exceptional items were Rs.17251.77 lakhs as against Rs.12209.48 lakhs of the previous year resulted in an increased of consolidated profit approximately by 41.29% over previous year. The consolidated Profit after tax stood at Rs.11710.49 lakhs as compared to the profit of Rs.9090.74 lakhs in the previous year.

The Company has achieved a standalone turnover for FY 2024-25 was of Rs.61061.13 lakhs over the turnover of Rs.37377.81 lakhs during the previous year reflects a growth of 63.36% over the corresponding financial year ended March 31,2024. The standalone profit after tax of the Company increased by 6.07% from Rs.5930.88 lakhs to Rs.6290.99 lakhs in the FY 2024-25.

KEY RATIOS

The ratios for the years ended March 31,2025 and March 31,2024 are as follows:

Ratios	As at March 31, 2025	As at March 31, 2024	Variance (%)	Reason for variance
Current ratio	3.55	4.16	-14.60	‘Refer note
Debt to equity ratio	0.03	-	0	‘Refer note
Return on equity ratio	0.19	0.21	-9.05	‘Refer note
Debt Service Coverage Ratio	236.27	2595.30	-90.90	Variance due to increase in finance cost
Trade receivables turnover ratio	4.16	2.65	56.66	Variance due to increase in sale
Trade payable turnover ratio	7.79	4.90	55.34	Variance due to increase in purchase
Net capital turnover ratio	2.25	1.65	36.41	Variance due to increase in sale
Net profit ratio	0.10	0.16	35.07	Variance due to reduction in margin
Return on capital employed	0.28	0.28	2.65	‘Refer note
Return on investment	0.19	0.21	-9.05	‘Refer note
Inventory turnover ratio	7.19	7.41	-2.99	‘Refer note

*Note: In respect of aforesaid mentioned ratios, no reasons for variance provided where changes is less than 25% in FY2024-25 in comparison to FY 2023-24.

KEY DEVELOPMENTS-RETAIL BUSINESS-ORIGEM

First ORIGEM store was opened during the festive seasons of Diwali at Borivali (W) for lab grown diamond jewellery retail. In December 24, Goldiam opened its second ORIGEM store at Kharghar (Navi Mumbai), and its third Mumbai Flagship store in the key jewellery market of Turner Road in Bandra respectively, marking its entry into one of the most prestigious shopping destinations in India. Subsequently, ORIGEM opened three more stores at Mulund West, at Farimont Hotel near T2 of Mumbai International Airport, and at Andheri West. All six Mumbai stores are strategically located, catering to micro-markets with high discretionary spending.

Goldiam also established its online sales channel with the launch of www.origemindia.com .

The enthusiastic customers response at all the stores gives us significant confidence about the huge market acceptance for Lab Grown Diamond Jewellery as we continue to identify strategic locations for additional stores.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS:

The Company considers its human resources as amongst its most valuable assets and continues to place emphasis on their development. It has been Companys constant endeavour to impart requisite training and thereby develop and hone the skills and talent of its personnel and enable them to realize their potential.

The overall Industrial Relations in the Company have been quite peaceful and cordial.

CAUTIONARY STATEMENT:

Statements in the Management Discussion and Analysis describing Companys objective, projections, estimates and expectations may be "forward looking statements" within the meaning of applicable securities laws and regulations.

Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which the Company operates, changes in Government regulations, tax laws, statutes and other incidental factors.