Kabra Jewels Ltd Management Discussions

Global Economic Overview

The global economy demonstrated resilience through FY 2025-26, sustaining a growth trajectory broadly in line with recent years despite an unsettled external environment. According to Mid-Year update from World Economic Situation and Prospects 2026, United Nations, Department of Economic and Social Affairs, global growth is projected at 2.5 per cent in 2026 and 2.8 per cent in 2027 (0.2 and 0.1 percentage points below the January forecasts). This resilience has been underpinned by continued technology-led capital investment, accommodative financing conditions in several major economies, and the adaptability of the private sector to shifting trade and tariff regimes.

FIGURE 1

GROWTH OF ECOMOMIC OUTPUT

Source: World Economic Situation and Prospects 2026, Mid-Year Update, United Nations, Department of Economic and Social Affairs

The global economic environment during the year under review remained shaped by a combination of geopolitical developments, persistent commodity price pressures and evolving structural trends. The outbreak of conflict in the Middle East introduced renewed volatility in global energy markets and disrupted international supply chains, with a disproportionate impact on energy-importing and financially vulnerable economies. Global headline inflation is expected to increase from 4.1 percent in 2025 to 4.7 percent in 2026 before declining to 3.9 percent in 2027. At the same time, economies integrated into the artificial intelligence (AI)-driven technology value chain continued to benefit from sustained demand and investment. Against this backdrop, the global disinflationary trend, which had progressed steadily during 2024 and 2025, moderated during the year under review, as elevated commodity prices and firmer inflation expectations offset the disinflationary impact of moderating demand. Advanced economies recorded comparatively modest growth, while emerging market and developing economies continued to contribute the larger share of incremental global output. Outlook: Global growth in 2026 and 2027 is expected to hold broadly steady at rates modestly below the pre-pandemic historical average, with the balance of risks assessed as more evenly distributed than earlier in the year, though downside risks persist. A prolongation or widening of the conflict in the Middle East, renewed escalation in trade barriers, a reassessment of artificial-intelligence-related productivity expectations, or a disorderly repricing of financial assets remain the principal risks to the outlook. Elevated public debt levels and gradually eroding institutional credibility in several major economies add to underlying vulnerabilities.

Indian Economic Overview

India remained among the fastest-growing major economies during FY 2025-26, with provisional estimates released by the Ministry of Statistics and Programme Implementation placing real GDP growth for the year at 7.7 per cent, an improvement over 7.1 per cent recorded in the preceding fiscal. According to Provisional Estimates for the Financial Year 2025-26, Real GDP or GDP at Constant Prices is estimated to attain a level of 323.12 lakh crore in the FY 2025-26, against the First Revised Estimate (FRE) of GDP for the year 2024-25 of 299.89 lakh crore. Nominal GDP or GDP at Current Prices is estimated to attain a level of 346.36 lakh crore in the year 2025-26, against 318.07 lakh crore in 2024-25, showing a growth rate of 8.9%.

Growth was underpinned by resilient domestic consumption, sustained public capital expenditure, and buoyant activity in the industrial and services sectors, with real gross value-added expanding in step with headline GDP. In accordance with the Quarterly Estimates of Gross Domestic Product for the Second Quarter (July-September) of 2025-26 by PIB Delhi, a six-quarter high of 8.2 per cent growth was recorded in the second quarter of the fiscal, reflecting the combined effect of Union Budget-led fiscal support, monetary easing, and improving trade relations, including progress on India-US trade negotiations. The Reserve Bank of India maintained an accommodative policy stance through much of the year, having reduced the repo rate earlier in the cycle before holding it steady as inflation remained comfortably within the tolerance band. Retail inflation eased through the year on the back of subdued food prices, providing the central bank room to prioritise growth support. The Indian rupee and domestic bond markets, however, came under episodic pressure during the year, particularly following the escalation of geopolitical tensions in the Middle East, which affected the countrys energy import bill and exerted pressure on foreign exchange reserves and the current account.

Outlook: The Reserve Bank of India has projected real GDP growth for FY 2026-27 in the range of 6.6 to 6.9 per cent, a moderation from the exceptional pace of FY 2025-26 but one that the central bank characterises as a return to a more sustainable trend rather than a cyclical downturn. The economy nonetheless remains exposed to external risks, notably the rise in crude oil prices, which, together with persistent geopolitical tensions, could disrupt trade flows and weigh on growth. Notwithstanding these headwinds, India remains well-positioned to sustain its growth trajectory, underpinned by resilient domestic consumption, continued policy reforms, and rising foreign investment inflows.

Industry Overview

The Global Jewellery Industry Overview

The global jewellery industry sustained its growth trajectory in FY26, supported by rising disposable incomes, growing preference for luxury goods, and golds enduring appeal as both an adornment and an investment asset. Jewellery continues to be regarded as a symbol of status and personal style, particularly among affluent consumers, while demand for contemporary designs and the emergence of new-age designers are broadening market reach. Rising GDP per capita across key economies, together with sustained growth in consumer spending, is expected to support continued momentum in the global gold jewellery market over the coming years.

The global jewellery market was valued at USD 242.79 billion in 2025 and is projected to reach USD 387.36 billion by 2034, reflecting a CAGR of approximately 5.41% during the forecast period_. The sustained demand for gold jewellery, rising affluence, and increasing fashion-consciousness continue to support this growth. The market continues to evolve with a shift toward branded, certified products and growing adoption of omnichannel retail models, particularly in markets like India, the Middle East and North America.

_ Source: Fortune Business Insights, «Jewelry Market Size, Share & Industry Analysis,» 2026.

Asia Pacific accounted for USD 95.24 billion in 2025, representing 39.23% of the global market share, and is projected to reach USD 99.55 billion in 2026 and is dominating the global jewellery market share. Consumer preferences are also evolving, with rising interest in jewellery for everyday and fashion wear, extending beyond traditional bridal categories. The men>s jewellery segment, in particular, is emerging as a notable area of growth. On the competitive front, the market remains moderately fragmented, with players increasingly investing in technology, ethical sourcing practices and immersive omnichannel experiences to differentiate their offerings and strengthen customer engagement.

THE INDIAN GOLD MARKET OVERVIEW

India occupies a position of singular importance in the global gold ecosystem, ranking as the worlds second-largest gold market with annual net demand of approximately 800 tonnes. The industry encompasses jewellery manufacturing and retail, investment products such as bars, coins and gold-backed exchange-traded funds, and, increasingly, gold-backed lending. India is entirely import-dependent for its gold requirements, a structural feature that renders the sector sensitive to import duty policy, currency movements and the countrys broader external account position.

Indias jewellery retail landscape is undergoing a marked transformation, driven by increasing formalisation, rising brand consciousness and evolving consumer preferences. The sector, historically dominated by unorganised and fragmented players, is now steadily consolidating into five distinct formats.

The first comprises national brands with strong pan-India presence and customer recall, known for consistent quality, service standards and trust. The second consists of regional brands with strong, localised appeal within specific states or communities, catering closely to local tastes and traditions. A third format has emerged around omnichannel brands offering lightweight, routine and office-wear jewellery, resonating particularly with younger, digitally native consumers. The fourth format comprises premium Indian jewellery brands, offering a more design-led, elevated retail experience. The fifth format is represented by international luxury brands, which have carved out a niche among affluent, urban consumers drawn to global design sensibilities and craftsmanship.

The year under review was marked by a pronounced divergence between value and volume. Overall gold demand in Q1 CY2026 rose 10 per cent year-on-year to 151 tonnes, while its value nearly doubled to a record INR 2,275 billion, reflecting the extraordinary rise in international bullion prices. Investment demand for bars, coins and ETFs was the principal growth driver, rising 54 per cent year-on-year and nearly matching jewellery consumption in volume terms, while jewellery demand softened as record prices tempered discretionary purchases. In response to pressure on the current account arising from elevated crude oil prices and geopolitical tensions in West Asia, the Government of India raised the import duty on gold from 6 per cent to 15 per cent during the year, a measure expected to weigh further on near-term volume demand.

Outlook: The World Gold Council continues to identify India as one of the most structurally influential markets for global gold demand, citing enduring cultural affinity for gold, rising wedding-related spending, and growing retail participation in gold-backed investment products, including exchange-traded funds and gold loans, the latter having grown materially over the past year. The Company expects that value-led demand, driven by continued price strength, together with the sectors demonstrated ability to adapt through lighter-weight and exchange-based purchase formats, will continue to support the retail gold trade in India, even as near-term volume growth moderates under the combined weight of higher duties and elevated prices. A moderation in geopolitical risk, stability in crude oil prices, and any easing of import duty would represent meaningful upside to this outlook.

Growth Drivers

Cultural and social demand: Gold retains deep-rooted cultural, religious and social significance in India, particularly in the context of weddings and festivals, providing a structural floor to jewellery demand that is largely insulated from short-term price fluctuations.

Rising disposable incomes and urbanisation: Sustained GDP growth, expanding middle-class incomes and continued urbanisation are widening the base of gold consumers, particularly in Tier II and Tier III markets, where organised retail penetration remains comparatively low and presents a substantial growth opportunity. Shift toward investment-led demand: Bar, coin and gold ETF purchases have emerged as a structural growth driver, as investors increasingly treat gold as a hedge against inflation, currency depreciation and geopolitical uncertainty, a trend reinforced by the record price environment of the past year.

Formalisation and organised retail growth: Regulatory measures such as mandatory hallmarking, tightened Know Your Customer norms and GST-driven transparency are accelerating the shift from the unorganised to the organised segment, benefiting listed and compliance-oriented retail gold companies.

Product innovation: Lighter-weight jewellery, studded and lower-karatage designs, and old-for-new exchange schemes have enabled consumers to adapt purchasing behaviour to elevated prices, sustaining footfall and transaction volumes even as tonnage growth moderates.

Gold-backed lending: Growth in gold loan products has expanded the utility of household gold holdings as a source of liquidity, indirectly supporting demand and formalisation across the value chain.

Opportunities and Threats

Opportunities

Category		Opportunity			Description
Market-Related		Rising Disposable			Growing middle-class incomes and increasing urbanisation are
		Incomes			expanding the consumer base for jewellery, particularly in Tier II
					and Tier III markets.
		Shift to Organised			Increasing consumer preference for certified, hallmarked jewellery
		Retail			from trusted, organised players is accelerating the shift away from
					the unorganised segment.
		E-commerce and			Growing consumer comfort with online jewellery purchases
		Omnichannel			presents an opportunity to expand reach through digital and
		Expansion			omnichannel retail formats, complementing physical store
					presence.
		Wedding and Festive			India\u2019s deep-rooted cultural and social affinity for gold and
		Demand			jewellery, particularly around weddings and festivals, continues to
					provide a structural, relatively resilient demand base.
Regulatory/		Formalisation-Led			Mandatory hallmarking, GST-driven transparency and tightened
Policy		Growth			KYC/AML norms are accelerating formalisation of the sector,
					favouring compliant, organised players over unorganised
					competitors.
		Government Support			Policy initiatives promoting exports and ease of doing business in
		for Gems and			the gems and jewellery sector present opportunities for scale and
		Jewellery Exports			market expansion.
Operational		Product and Design			Lighter-weight jewellery, studded and lower-karatage designs,
		Innovation			and old-for-new exchange schemes allow businesses to adapt to
					price-sensitive consumers while sustaining volumes.
		Technology-Led			Adoption of digital inventory management, billing and customer
		Efficiency			relationship tools can improve operational efficiency, reduce
					shrinkage and enhance customer experience.
		Brand Building and			Investment in brand credibility, certification and transparent
		Trust			sourcing can help differentiate a business in an increasingly
					discerning and quality-conscious market.
Category			Opportunity			Description
Financial			Growth in Gold-			Rising consumer participation in gold loans, digital			gold and
			Backed Investment			gold-backed investment products creates opportunities for
			and Lending Products			diversification of business lines.
			Value-Led Revenue			Elevated gold prices, even amid softer volume growth, support
			Growth			higher revenue realisation per transaction, aiding				overall
						profitability.
			Access to Organised			Improved financial track record and formalisation enhance access
	Financing			to institutional credit and working capital financing on favourable
						terms.
Threats
Category	Threat			Description
Market-Related			Intensifying			Online marketplaces offer wider selection and			aggressive
			Competition			pricing, increasing competitive pressure on traditional jewellery
						businesses.
			Changing Consumer			Growing consumer demand for ethically sourced and sustainable
	Expectations			jewellery requires reconfiguration of traditional sourcing and
						business models.
			Urban Market			High density of stores in urban locations makes differentiation
			Saturation			and margin management increasingly difficult.
			Volatile Demand			Consumer sentiment remains sensitive to economic				cycles,
						leading to inconsistent sales patterns, particularly during uncertain
						periods.
Regulatory			Increased Compliance			Regulations such as mandatory hallmarking and GST compliance
	Burden			require process overhauls and may strain small and medium
						enterprises.
			Anti-Money			AML compliance necessitates technological and			operational
			Laundering (AML)			investment, particularly for high-value transactions.
	Requirements
			ESG Regulations			Growing expectations around transparency in sourcing and
						environmental responsibility may require significant			investment
						in sustainability programmes.
Operational			Supply Chain			Any disruption in the availability of raw materials,			particularly
	Vulnerabilities			imports, can affect the production cycle and			inventory
						management.
			Security Concerns			Jewellery businesses face heightened risk of theft and robbery,
						given the high value of inventory held.
			Internal Fraud Risks			Employee misconduct, if unchecked, can lead to			inventory
						shrinkage and reputational damage.
			Technology			Increasing reliance on digital infrastructure heightens vulnerability
			Dependence			to cybersecurity breaches and IT system failures.
Financial			Price Volatility			Fluctuations in gold and diamond prices directly affect				margin
						stability and inventory valuation.
			High Inventory Costs			Large investments in stockholding increase working				capital
						requirements and inventory-related risks.
			Credit Exposure			Extending credit to customers or dealers introduces the risk of
						bad debts, affecting liquidity.
			Rising Operating			Escalating wages, rent, energy and logistics costs compress profit
			Expenses			margins and impact scalability.

Risks and Risk Management Framework

The Company has instituted a structured risk management framework designed to proactively identify, assess and mitigate risks that could impact its operations, financial performance or reputation. The Company believes that a disciplined and proactive approach to risk management, combined with prudent financial and operational practices, will enable it to navigate market uncertainties while safeguarding stakeholder interests and supporting sustainable, long-term growth.

		Degree of
Risk	Category		Description	Mitigation Strategy
		Risk
Gold and	Financial	High	Fluctuations in gold,	The Company monitors metal price
Precious			silver and diamond	trends closely and adjusts procurement
Metal Price			prices affect inventory	and pricing to manage margin impact.
Volatility			valuation, margins and
			consumer purchase
			timing.
High	Financial	Medium	The nature of the	The Company maintains disciplined
Inventory			jewellery business	inventory planning aligned with
and Working			requires holding	demand patterns and available
Capital			significant precious	financing lines.
Requirements			metal inventory,
			increasing working
			capital needs.
Security and	Operational	Low	High-value inventory	The Company has implemented
Theft Risk			exposes the store to	security systems, insurance cover and
			risk of theft, burglary	standard safekeeping practices at its
			or robbery.	premises.
Regulatory	Regulatory	Medium	Mandatory hallmarking,	The Company follows applicable
Compliance			GST and KYC/AML	hallmarking, tax and KYC requirements
			norms require ongoing	and keeps its processes updated with
			compliance and	regulatory changes.
			documentation.
Local Market	Market	Medium	Competition from	The Company focuses on customer
Competition			other jewellers in	relationships, trust and consistent
			Ahmedabad, including	quality to retain its local customer
			larger regional and	base.
			national chains, may
			affect footfall and
			pricing.
Dependence	Market	Medium	A meaningful share of	The Company plans inventory and
on Festive			sales is concentrated	promotional activity around key
and Wedding			around wedding and	seasonal periods to manage demand
Season			festive periods, leading	fluctuations.
Demand			to seasonal demand
			patterns.

Company Overview

Kabra Jewels Limited has established itself as a trusted name in Gujarats jewellery retail landscape, built on a foundation of long-standing, trust-based relationships with its artisans (karigars) and manufacturers. These enduring partnerships ensure timely delivery, superior craftsmanship and consistent product quality, while a clear alignment of interests between the Companys artisans, third-party vendors and key stakeholders, including its Promoters and Directors, supports efficient operations and sustained long-term growth.

The Companys approach is firmly customer-centric, with a continued focus on building lasting relationships through active engagement, a deep understanding of evolving customer preferences, and the incorporation of customer feedback into its designs and offerings. This is reinforced by an unwavering commitment to quality and transparency: all gold jewellery is hallmarked through government-approved centres in line with Bureau of Indian Standards (BIS) norms, while diamond jewellery and loose diamonds are independently certified by recognised third-party agencies. This rigorous quality control has been instrumental to the Companys success across Gujarat, helping establish KK Jewels as a trusted, transparent brand with deep customer loyalty and strong industry standing.

The Companys flagship stores in Ahmedabad serve as its principal retail hubs, offering a comprehensive product range within a premium shopping environment, supported by trained staff, elegant displays and personalised service. This is complemented by a growing digital outreach strategy, including targeted engagement with millennial customers through platforms such as Instagram, aimed at strengthening brand visibility and driving online engagement. Together, these strengths in craftsmanship, quality assurance, customer relationships and omnichannel presence position Kabra Jewels as a differentiated and trusted jewellery retailer, dedicated to delivering timely, high-quality products and an exceptional customer experience.

Financial Performance in FY26

Particulars	FY26	FY25	% Change
Revenue from Operations ( Lakhs)	26,892.02	21,088.25	27.52%
Operating Profit ( Lakhs)	5607.57	3435.68	63.22%
Operating Profit Margin (%)	20.85%	16.29%	27.99%
EBITDA ( Lakhs)	4,545.98	2,659.73	70.92%
EBITDA Margin (%)	16.90%	12.61%	34.03%
Profit Before Tax ( Lakhs)	3,321.07	1,497.16	121.82%
Profit After Tax ( Cr)	2,476.91	1,141.38	117.01%
Net Profit Margin (%)	9.18%	5.40%	69.93%

Key Financial Ratios

Ratio			FY 2025-26	FY 2024-25	% Change Reason for Change
Debtors	Turnover		90.19	49.79	81.13% This indicates that the company has been
Ratio (Times)					able to recover outstanding	dues faster
					than previous year.
Inventory Turnover			1.04	1.28	(18.45%) Not Applicable
Ratio (Times)
Debt	Service		7.09	1.58	348.40% With increase in cash accruals	and
Coverage		Ratio			reduction in debt, DSCR of the company
(Times)					has improved.
Interest	Coverage		1.94	0.42	357.83% With reduction in debt and	increase in
Ratio (Times)					profitability of company the	company\u2019s
					ability to repay interest has improved.
Current		Ratio	3.05	2.27	34.52% It indicates improvement	in liquidity
(Times)					position for the company.
Debt Equity		Ratio	1.48	1.19	24.07% Not Applicable
(Times)
Operating		Profit	20.85%	16.29%	27.99% With increase in sales and	benefits of
Margin (%)					economies of scale, operating profit margin
					has improved for the company.
Net Profit Margin			9.18%	5.40%	69.93% With increase in sales and	benefits of
(%)					economies of scale, net profit margin has
					improved for the company.
Return	on	Net	26.73%	20.51%	30.35% With increase in sales and	benefits of
Worth (%)					economies of scale, return on equity has
					improved for the company.

Internal Control Systems and their Adequacy

The Company has in place adequate system of internal control. It has documented procedures covering all financial and operating functions. These controls have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls, monitoring of operations, protecting assets from unauthorized use or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with global best practices in these areas as well.

The Audit Committee of the Company evaluates and reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen them. Based on the reports of the Internal Auditors and the responses thereto, necessary corrective actions are undertaken to strengthen the controls.

Human Resources and Industrial Relations

The Companys philosophy is centred on building a strong, performance- and competency-driven culture underpinned by a heightened sense of accountability and ownership at all levels. Towards this objective, the Company has undertaken measured initiatives to strengthen organisational competency through active employee involvement and development, supported by robust systems designed to enhance productivity, equity, and accountability across functions.

Given the dynamic and increasingly competitive business environment, the Companys primary focus remains on upgrading the skills and knowledge of its existing workforce to meet evolving business requirements. This is achieved by providing effective leadership across all levels, fostering a results-oriented mindset, and instilling a culture of speed, ownership, and responsibility in decision-making and execution. To ensure that employees skills, knowledge, and business acumen remain current, the Company continues to invest in structured in-house training programmes across all levels of the organisation. The rationalisation and optimisation of the workforce remains an ongoing and continuous process, aligned with the Companys evolving operational needs. The Companys employee strength stood at 149 as on March 31 st , 2026.

Industrial relations remained cordial and harmonious throughout the year under review.

Cautionary Statement

Certain statements in this Management Discussion and Analysis describing the Companys objectives, projections, expectations, estimates, and predictions may constitute forward-looking statements within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed or implied due to various risks and uncertainties. The Company undertakes no obligation to publicly update or revise any forward-looking statements based on subsequent developments or events.

CERTIFICATE OF NON-DISQUA LIFICATION OF DIRECTORS

[Pursuant to Regulations 34(3) and Schedule V Para C Clause (10) (i) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015

TO,

Kabra Jewels Limited

(Formerly known as Kabra Jewels Private Limited) 6 Ground Floor, Iscon Center, Besides Tanishq, Shivranjani Cross Road, Satellite, Ahmedabad, Gujarat, India, 380015

I have examined the relevant registers, records, forms, returns and disclosures received from the Directors of KABRA JEWELS LIMITED (formerly known as Kabra Jewels Private Limited) having CIN: L52393GJ2010PLC061692 and having registered office 6 Ground Floor, Iscon Center, Besides Tanishq, Shivranjani Cross Road, Satellite, Ahmedabad, Gujarat, India, 380015and (hereinafter referred to as the Company), produced before me/us by the Company for the purpose of issuing this Certificate, in accordance with Regulation 34(3) read with Schedule V Para-C Sub clause 10(i) of the Securities Exchange Board Of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In my opinion and to the best of my information and according to the verifications (including Directors Identification Number (DIN) status at the portal www.mca.gov.in)as considered necessary and explanations furnished to me by the Company & its officers, I hereby certify that none of the Directors on the Board of the Company as stated below for the Financial Year ending on 31 st March, 2026 have been debarred or disqualified from being appointed or continuing as Directors of companies by the Securities and Exchange Board of India, Ministry of Corporate Affairs, or any such other Statutory Authority.

Sr. No.	Name	DIN	Date ofAppointment
1	Kailash SatyanarayanKabra	03135234	21/07/2010
2	JyothiKailashKabra	05272817	06/05/2012
3	Anand ChandubhaiThakkar	10975276	08/03/2025
4	HetalKarsanbhaiVaghela	10655242	11/06/2024
5	Nimesh Puranprakash Phophalia	10574019	01/04/2024
6	Indira Suresh Vora	10581630	06/04/2024

Ensuring the eligibility of for the appointment / continuity of every Director on the Board is the responsibility of the management of the Company. Our responsibility is to express an opinion on these based on our verification. This certificate is neither an assurance as to the future viability of the Company nor of the efficiency or effectiveness with which the management has conducted the affairs of the Company.