Goldiam International Ltd Management Discussions

OPPORTUNITIES:

The Company believes that the Indian gems and jewellery industry offers significant long-term growth opportunities, supported by favourable demographic trends, rising disposable incomes, evolving consumer preferences and increasing global demand for branded jewellery. The key opportunities available to the Company include:

Export Business

India continues to maintain a leadership position in the global gems and jewellery industry owing to its skilled workforce, integrated manufacturing capabilities and cost competitiveness.

Growing demand for lightweight, design-led and value-added diamond studded jewellery in key export markets such as the United States, the Middle East, Europe and Australia provides substantial opportunities for expanding the Company s export business.

India s Free Trade Agreements (FTAs), including the India-UAE Comprehensive Economic Partnership Agreement (CEPA) and the India-Australia Economic Cooperation and Trade Agreement (ECTA), along with ongoing trade negotiations with other countries, are expected to enhance export competitiveness by providing improved market access and favourable tariff regimes.

Diversification into emerging international markets and strengthening relationships with global retailers are expected to support sustainable export growth.

Increasing adoption of technology, digital product development and efficient supply chain management provide opportunities to improve productivity, reduce lead times and enhance customer satisfaction.

Retail Business

The organised jewellery retail sector in India continues to grow at a faster pace than the unorganised segment, driven by increasing consumer preference for trusted brands, certified products and superior shopping experiences.

Rising urbanisation, increasing disposable incomes and changing consumer lifestyles are driving demand for branded diamond jewellery across metropolitan as well as Tier II and Tier III cities.

Consumers are increasingly preferring contemporary, lightweight and everyday wearable jewellery, creating opportunities for expanding product offerings across various customer segments.

Omni-channel retailing, digital marketing and e-commerce platforms are enabling jewellery companies to reach a wider customer base and enhance customer engagement.

Lab-Grown Diamond Jewellery

Lab-grown diamonds are gaining widespread consumer acceptance globally owing to their identical physical, chemical and optical characteristics compared to natural diamonds, while offering greater affordability and sustainability.

Increasing awareness among younger consumers regarding environmentally responsible and ethically sourced products is accelerating demand for lab-grown diamond jewellery.

The significant price advantage of lab-grown diamonds over natural diamonds enables consumers to purchase larger or higher-quality jewellery within comparable budgets, thereby expanding the addressable market.

Expansion of organised branded retail chains dedicated to lab-grown diamond jewellery presents significant opportunities for increasing domestic market penetration.

Continuous innovation in jewellery designs, customisation, product differentiation and branding is expected to further accelerate demand in this fast-growing segment.

THREATS:

The Company s business is exposed to various external and industry-specific risks that could impact its operational and financial performance. While the Company continuously monitors these risks and adopts appropriate mitigation strategies, the following remain the key threats to its business:

Export Business

Global economic slowdown, inflationary pressures and geopolitical uncertainties may adversely affect discretionary consumer spending on jewellery in key export markets.

Changes in international trade policies, tariffs, import duties, sanctions and regulatory requirements may impact the competitiveness of Indian jewellery exports.

Volatility in foreign exchange rates could affect export realizations and profit margins.

Fluctuations in the prices of gold, natural diamonds, lab-grown diamonds and other precious metals may influence consumer demand, inventory valuation and profitability.

Increasing competition from other jewellery manufacturing and exporting countries, including China, Thailand, Vietnam and Turkey, may exert pressure on pricing and market share.

Supply chain disruptions, logistics constraints, availability of raw materials and shipping delays may impact timely execution of export orders.

Changes in consumer preferences, particularly in developed markets, may require continuous product innovation and design enhancement to remain competitive.

Dependence on a limited number of large international customers or specific geographies may expose the business to concentration risks.

Retail Business

Intense competition from established national jewellery brands, regional players and new entrants may affect market share and profitability.

Rising rentals, employee costs, marketing expenditure and other operating expenses associated with retail expansion may impact margins.

Volatility in gold prices may influence consumer purchasing decisions and result in temporary demand fluctuations.

Changes in consumer buying behaviour, increasing preference for online shopping and evolving fashion trends require continuous investment in product development and omni-channel capabilities.

Delays in opening new retail stores, obtaining statutory approvals or identifying suitable locations may impact planned expansion.

Counterfeit products, grey market activities and price-based competition from unorganised players may adversely affect organised retailers.

Lab-Grown Diamond Jewellery

Continued decline in lab-grown diamond prices due to technological advancements and increased global production may affect inventory values and margins unless managed through efficient procurement and inventory controls.

Misconceptions regarding the distinction between natural and lab-grown diamonds or inadequate consumer awareness may impact purchasing decisions.

Rapid changes in manufacturing technology and evolving certification standards require continuous investment in quality assurance, product innovation and customer education.

Any adverse changes in regulations governing the production, certification, import or export of diamonds and jewellery may affect business operations.

STRENGTHS:

a) Diversified Business Model:

The Company operates across jewellery manufacturing, exports and branded retail, providing multiple revenue streams and reducing dependence on any single market or customer segment.

b) Wide Range of Products:

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

c) 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.

d) Technology Leadership:

The launch of India s First Digital 3D Ring Builder reflects the Company s focus on innovation and digital transformation. The platform enables customers to customise and visualise jewellery designs in real time, enhancing customer experience, supporting omnichannel sales, and differentiating the Company s retail offerings in a competitive market.

e) Omni-Channel Presence

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

f) Growing Retail Network:

The Company is strengthening its presence in the domestic organised jewellery market through its ORIGEM brand. As on the date of this Report, the Company operates 26 retail stores across India, enabling direct customer engagement and enhanced brand visibility.

g) Leadership in Lab-Grown Diamond Jewellery:

The Company is well positioned to capitalise on the rapidly growing demand for lab-grown diamond jewellery through innovative product offerings, contemporary designs and a customer-focused retail strategy.

h) Design and Product Innovation:

Continuous investment in product development and design capabilities enables the Company to offer contemporary collections that cater to changing consumer preferences across domestic and international markets.

i) 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.

j) Experienced Management Team:

The Company is led by an experienced management team with extensive industry knowledge, supported by qualified professionals across manufacturing, marketing, finance, retail and corporate functions.

k) Financial Strength:

A healthy financial position, disciplined capital allocation and prudent working capital management provide the Company with the flexibility to pursue strategic growth opportunities. The successful Qualified Institutions Placement (QIP) has further strengthened the Company s financial resources to support expansion of its branded retail business.

l) 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.

m) 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.

The Company believes that these strengths position it favourably to capitalise on emerging opportunities in both the domestic and international jewellery markets and to create sustainable long-term value for all stakeholders.

RISKS AND CONCERNS:

Risk management is integral to your Company s strategy and to the achievement of Goldiam s long-term goals. The nature of the Company s 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) Commodity Price Risk

The prices of gold, natural diamonds, lab-grown diamonds and other precious metals are subject to significant fluctuations due to global economic conditions, geopolitical developments, demand-supply dynamics and currency movements. Such volatility may impact raw material procurement costs, inventory valuation, pricing strategies and profitability. The Company continuously monitors commodity price movements and adopts appropriate procurement and inventory management practices to mitigate this risk.

c) Laboure s availability Risk:

The gems and jewellery industry is highly labour-intensive and export-oriented. The migration of skilled labourers back to their native places, driven by various socio-economic factors and changing employment preferences, has resulted in a shortage and non-availability of skilled manpower, thereby adversely impacting production capacity and operational efficiency.

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) Market Competition

The jewellery industry is highly competitive, with the presence of established domestic and international brands, organised retailers and regional players. Continuous innovation, competitive pricing, superior customer service and effective brand positioning are essential to sustain market share and profitability.

f) Retail Expansion Risk

The Company s retail growth strategy involves expansion of its store network under the ORIGEM brand. Delays in identifying suitable locations, obtaining statutory approvals, increasing rental costs, higher employee costs and slower-than-expected customer acquisition may affect the expected returns from retail expansion.

g) Regulatory and Compliance Risk

The Company operates in a highly regulated environment and is subject to various laws and regulations relating to corporate governance, taxation, customs, foreign trade, environmental standards and labour laws. Any significant regulatory changes or non-compliance may impact business operations and financial performance. The Company has established robust compliance systems to ensure adherence to applicable legal and regulatory requirements.

h) Margin risk:

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

The outlook for the Company s export business remains positive over the medium to long term, while the global operating environment continues to be influenced by geopolitical tensions, inflationary pressures, exchange rate volatility, and evolving trade policies, including tariff-related developments in certain export markets, the Company remains well-positioned to address these challenges through its diversified product portfolio, strong customer relationships, manufacturing excellence, and continued focus on innovation and operational efficiency.

The Company will continue to strengthen its presence in existing markets while exploring opportunities in new geographies, expanding strategic customer partnerships, and leveraging digital technologies to enhance customer engagement and improve speed-to-market. With its focus on quality, timely delivery, product innovation, and sustainable manufacturing practices, the Company remains confident of strengthening its export franchise and delivering sustainable long-term growth.

Retail Business:

Moving forward, the Company expects the Indian economy to maintain a steady growth trajectory in FY 2026-27, notwithstanding potential headwinds arising from geopolitical developments, global trade uncertainties, and evolving tariff policies, including those of the United States. Domestic economic activity is expected to be supported by easing food inflation, income tax relief and reforms measures announced in the Union Budget 2026-27, and a relatively lower interest rate environment, which are likely to improve consumer sentiment and boost discretionary spending. These macroeconomic factors, coupled with increasing consumer preference for branded, customised, and technology-enabled jewellery, are expected to provide a favourable operating environment for the Company.

The Company remains focused on expanding its retail footprint, strengthening its digital capabilities through innovative initiatives such as India s First Digital 3D Ring Builder, and enhancing its omnichannel presence to capitalise on emerging growth opportunities while maintaining operational excellence and long-term value creation for stakeholders.

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:

KEY RATIOS

*Note: In respect of aforesaid mentioned ratios, no reasons for variance provided where changes is less than 25% in FY2025-26 in comparison to FY 2024-25.

KEY DEVELOPMENTS-RETAIL BUSINESS-ORIGEM

The Company continues to strengthen its presence in the retail segment of lab-grown diamond jewellery under its flagship retail brand ORIGEM . During the year and up to the date of this Report, the Company has made significant progress in expanding its retail footprint in line with its long-term growth strategy.

As on the date of this Report, the Company has successfully established 26 retail stores under the ORIGEM brand across various cities in India. These stores offer a wide range of premium lab-grown diamond jewellery and are aimed at providing customers with an enhanced shopping experience while strengthening the Company s brand presence in the fast-growing lab-grown diamond jewellery market.

To support its retail expansion plans, the Company successfully raised 20204.98 lakhs through a Qualified Institutions Placement (QIP) during the year. The funds raised are being utilised primarily for the expansion of the Company s retail network, including the opening of new ORIGEM stores, and for other purposes as set out in the Objects of the Issue disclosed in the QIP offer documents.

The Management believe that the continued expansion of the ORIGEM retail network, supported by the capital raised through the QIP, will further enhance the Company s market presence, strengthen its competitive position in the lab-grown diamond jewellery segment, and create sustainable long-term value for its stakeholders.

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 Company s 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 Company s 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 Company s 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.