Goldkart Jewels Ltd Management Discussions

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GOLDKART JEWELS LIMITED AHMEDABAD

GLOBAL ECONOMY

Global economic activity and the outlook are being shaped by two major forces, pushing in opposite directions with asymmetric effects across countries. First is the negative supply shock induced by the war in the Middle East. Second is the ongoing positive technology shock manifesting in accelerated momentum of the global technology cycle, in no small part driven by advances in and deployment of artificial intelligence (AI) tools. The global economy as a whole has, so far, weathered the shock from the war better than feared. Movements in and repercussions from the main channels of transmission—commodity prices, inflation expectations, and financial conditions—have been relatively limited. However, transmission is still in the early stages—commercial and strategic destocking have provided temporary relief from reduced energy flows, whereas forward-looking indicators such as supply chain pressure and manufacturing purchasing managers indices point to softer momentum ahead—and some countries are experiencing more strain than others.

The global economy is facing another major shock. The conflict in the Middle East has triggered sharp increases in energy prices, renewed inflationary pressures, and fueled expectations of tighter monetary policy. Global growth is projected to slow from 2.9 percent in 2025 to 2.5 percent in 2026—the lowest rate since the COVID-19 pandemic—amid weaker prospects for economies dependent on energy imports and those directly affected by hostilities. Activity is expected to firm in 2027-28 as energy supplies recover, monetary easing resumes, and trade strengthens. Risks to the outlook remain skewed to the downside. A renewed escalation of hostilities or more prolonged disruptions to commodity flows could further raise commodity prices, intensify inflationary pressures and food insecurity, trigger financial stress, and lower growth. If energy supply disruptions prove to be more severe than assumed and are accompanied by substantial financial stress, global growth could fall to just 1.3 percent in 2026. Persistent trade policy uncertainty, geopolitical strains, and weather-related shocks also pose material risks. On the upside, a broadening of artificial intelligence (AI)-related investment and its adoption could lift activity. Policy action is critical to address ongoing challenges. Enhanced global cooperation is needed to safeguard energy and food security, bolster the trading system, and advance the energy transition. Domestically, policy makers will need to balance controlling inflation with supporting activity, strengthen fiscal sustainability, and maintain financial stability. Slower growth prospects translate into reduced investment, constrained hiring, and tighter fiscal space, compounding the challenge of creating jobs in EMDEs with growing workforces in an era of potentially transformative change linked to AI. Meeting this challenge will require a concerted agenda centered on the conditions for job creation: investing in physical, human, and digital capital; fostering a business-friendly environment; and mobilizing private investment.

INDIAN ECONOMY

The year 2025 may have begun with one set of expectations and ended with another for the world, India included. However, one notable continuity has been Indias strong macroeconomic performance, evident in the post-Covid period. Growth was strong in the first quarter and continued to improve in the subsequent two quarters. The central bank cut interest rates aggressively and loosened liquidity conditions. Macroprudential measures put in place in 2023 were relaxed since the underlying conditions had changed. The government announced significant tax breaks for households in the budget for fiscal year 2026 (FY26) in February. It achieved a fiscal deficit of 4.8% of GDP, against the budgeted 4.9%, and announced a target of 4.4% for FY26, fulfilling the promise made in 2021 to reduce the Union fiscal deficit by more than half from 9.2% in FY21. India received credit rating upgrades from three credit rating agencies in 2025, starting with Morningstar DBRS in May, followed by S&P in August and R&I in September. S&Ps upgrade of India from BBB- to BBB was Indias first credit rating upgrade from a major agency in nearly two decades.

Accordingly, the Indian Economic Survey now revises Indias potential growth rate to 7.0 per cent, up from 6.5 per cent three years ago. At that time, we correctly anticipated weaker global tailwinds, particularly from exports, but also noted that sustained domestic reforms and public investment could lift the economys underlying growth capacity. That possibility is now being realised. The expansion of infrastructure — illustrated by the doubling of the airport network over the past decade and the rapid growth of freight movement through inland waterways — is easing logistics constraints and raising economy-wide efficiency.

Growth in India is projected at 6.6% in FY27, as higher energy prices caused by the Middle East conflict and supply chain disruptions weigh on economic activity. But even with the slowdown, India remains among the fastest-growing major economies in the world, says the World Banks latest economic update.

(Source : World Bank)

INDIA - GEMS & JEWELLERY

In April 2026, inflows into Gold ETFs increased by 34% month-on-month to Rs. 3,040 crore (US$ 343.98 million) from Rs. 2,265 crore (US$ 256.29 million) in March, reflecting continued investor preference for gold-backed investment products. During the same period, Silver ETFs recorded net outflows of Rs. 126 crore (US$ 14.26 million), marking the third consecutive month of outflows. According to the World Gold Council, the AUM of Indian gold ETFs increased from US$ 7.2 billion in April 2025 to US$ 18.4 billion in May 2026, while physical gold holdings rose from 65.3 tonnes to 116.7 tonnes, indicating strong growth in investor demand for gold-backed ETFs.

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 the Government of India. The Indian Government also signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) in March 2022, this will allow the Indian Gems & Jewellery industry to further boost exports. CEPA will provide the industry with duty-free access to the UAE market. Indias Gems Jewellery Export Promotion Council (GJEPC) aims to triple its exports to the UAE post the CEPA.

MARKET SIZE

Indias gems and jewellery market size is valued at approximately USD 85 billion (around Rs. 7.31 lakh crore) for 2025-26, and is growing at an annual growth rate (CAGR) of about 8.86% to reach USD 154 billion by 2032

GOLD DEMAND

India is the largest consumer of gold in the world. Rising middle class population and increasing income levels are key drivers behind the demand of gold and other jewellery in India. 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. ndias gold demand is projected to remain in the range of 600-700 tonnes in 2026, with rising investment demand offsetting weaker jewellery consumption due to elevated gold prices.

(Source: IBEF Report on Gems & Jewellery Sector)

OPPORTUNITIES & THREATS

Demand for gold and diamond jewellery has been steadily rising, driven by a combination of factors, including expanding urbanisation, higher affluence, growing aspirations and burgeoning income levels. Gold jewellery has been a central part of the Indian culture, and is considered a store of value, a symbol of wealth and status and a fundamental part of several rituals and festivals. Gold has historically proved to be a safe haven and a stable asset-class, providing maximum returns over the long term, despite investing not leading to steady income generation. India is poised for robust economic growth and is home to one of the worlds youngest populations. Increasing aspirations and changing preferences of young demographics, coupled with rising disposable incomes, will propel demand for fashion jewellery.

The jewellery industry is highly capital intensive due to its long working capital and realisation cycle. A few recent incidents of financial defaults have created a liquidity squeeze in the industry, prompting banks and financial institutions to reduce their exposure to industry players. This liquidity crunch has caused a blip in profitability and growth of the jewellery industry. The jewellery industry is susceptible to continuous changes in the regulatory framework and market conditions. Adverse economic factors, regulatory upheavals and unfavourable Government policies can lead to disruptions in the industry performance.

INDUSTRY OUTLOOK

In the coming years, growth in gems and jewellery sector would largely be contributed by the development of large retailers/brands. Established brands are guiding the organised market and are opening opportunities to grow. Increasing penetration of organised players provides variety in terms of products and designs. Also, the relaxation of restrictions of gold import is likely to provide a fillip to the industry. The improvement in availability along with the reintroduction of low-cost gold metal loans and likely stabilisation of gold prices at lower levels is expected to drive volume growth for jewellers over short to medium term. The demand for jewellery is expected to be significantly supported by the recent positive developments in the industry.

(Source: IBEF Report on Gems & Jewellery Industry)

RISKS AND CONCERNS

The Indian economy is on a high growth trajectory, with several favourable macroeconomic indicators supporting the growth momentum. The jewellery industry is expected to benefit from the recent developments in the economy. Higher income in the hands of farmers and rural population, driven by normal monsoon forecast, will translate into robust spending and consumption, thus fuelling the demand for jewellery. Frequent regulatory changes and fluctuations in gold and commodity prices may pose a challenge to the Companys margins. Presence of unorganised players and expansion of regional players results in intense competition in the jewellery industry.

FINANCIAL PERFORMANCE

The Companys financial performance for the year ended on March 31, 2026 is as below:

Particulars	2025-26	2024-25
Total Revenue	1,173,182,023	82,35,46,311
Total Expenditure	1,127,109,702	77,76,17,118
Profit /(Loss) Before Tax	46,072,321	4,59,29,193
Less: Current Tax	(10,500,000)	(12500000)
Deferred Tax	(43,448)	(264549)
Profit /(Loss) after Taxation	35,528,873	3,31,64,644
Balance carried to Balance Sheet	35,528,873	3,31,64,644

DETAILS OF SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS

Particulars	Items included in numerator and denominator	Ratio as at 31st March, 2026	Ratio as at 31st March, 2025	Variation	Remarks
(a) Current Ratio	Current Assets ( including Bank Deposits having maturity of more than 1 year)/ Current Liabilities	1.85	2.64	-29.97%	NA
(b) Debt-Equity Ratio	Net Debt/Total Equity	0.60	0.27	120.69%	Note-1
(c) Debt Service Coverage Ratio	Earnings before Interest, Depreciation, Tax and Foreign Exchange Loss or (Gain) (net) / (Interest + Finance charges + Repayment of long-term debt made during the period (net of refinance))				Note-1
(d) Return on Equity Ratio	Net Profit after Taxes Average Shareholders Equity	6.56%	6.60%	-0.05%	NA
(f) Trade Receivables turnover ratio	Revenue from operations Average Trade Receivables	11.88	6.04	96.64%	Note 2
(g) Trade payables turnover ratio	Operating expenses + Other expenses Average Trade Payables	-	#DIV/0!	#DIV/0!	NA
(i) Net profit ratio	Profit After Tax T otal Income	3.03%	4.03%	-24.80%	NA
(k) Return on investment	Profit After Tax Average Shareholders Fund	6.56%	6.60%	-0.05%	NA

Notes

Debt Service coverage ratio has been decreasing due to Repayment of loan started in current finanical

1 year

Company has achieved significant growth in Sales, hence it has been able to improve its inventory

2 Turnover Ratio.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The company has implemented proper system for safeguarding the operations/business of the company, through which the assets are verified and frauds, errors are reduced and accounts, information connected to it are maintained such, so as to timely completion of the statements. The Company has adequate systems of Internal Controls commensurate with its size and operations to ensure orderly and efficient conduct of business. These controls ensure safeguarding of assets, reduction and detection of fraud and error, adequacy and completeness of the accounting records and timely preparation of reliable financial information. The company gets internal audit and verification done at regular intervals. The requirement of having internal auditor compulsory by statue in case of listed and other classes of companies as prescribed shall further strengthen the internal control measures of company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES AND INDUSTRIAL RELATIONS FRONT

Your Company has undertaken employees development initiatives, which have very positive impact on the morale and team spirit of the employees. The company has continued to give special attention to human resources and overall development.

CAUTIONARY STATEMENT

Certain statements in the reports of the Board of Directors and Managements discussions and analysis may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied since Companys operations are influence by many external and internal factors beyond the control of the Company. The Company assumes no responsibility to publicly amend, modify or revise any of these statements on the basis of any subsequent developments, information or events.