Kalyan Jewellers India Ltd Management Discussions

ECONOMIC REVIEW Global Economic Review

According to the April 2024 report by the IMF, the baseline forecast is for the world economy to continue growing at 3.2 % during 2024, at the same pace as in 2023. Also, in 2025 the projected growth rate is 3.2%. Conversely, upside factors include the potential for a short-term fiscal stimulus in light of numerous countries holding elections in 2024, expedited monetary policy accommodation, and productivity enhancements facilitated by advancements in technologies such as artificial intelligence.

Table: World Economic Outlook Projection (%)

	2023	2024(P)	2025(P)
WORLD ECONOMIC OUTLOOK	3.2	3.2	3.2

Source: World Economic Outlook, IMF, April 2024 Note: P stands for projections

The world economy exhibited immense potential for high growth rates in 2023; it was however disrupted by global geopolitical tensions. These tensions have not shown definitive signs of immediate resolution, despite diplomatic efforts and ceasefire agreements in some regions, reducing the intensity of conflicts in the short term. Additionally, new commodity price spikes from geopolitical shocks, including Red Sea Crisis and supply disruptions and more persistent underlying inflation, could prolong tight monetary conditions. In China, without a comprehensive response to the troubled property sector, growth could falter, hurting trading partners. Amid high government debt in many economies, a disruptive turn to tax hikes and spending cuts could weaken activity, erode confidence, and sap support for reform and spending to reduce risks from climate change.

Outlook

The near-term priority for central banks is to ensure that inflation touches down smoothly, by neither easing policies prematurely nor delaying too long and causing target undershoots. At the same time, as central banks take a less restrictive stance, a renewed focus on implementing medium-term fiscal consolidation to rebuild room for budgetary manoeuvre and priority investments, and to ensure debt sustainability, is in order. Cross-country differences call for tailored policy responses. Intensifying supply-enhancing reforms would facilitate inflation and debt reduction, allow economies to increase growth toward the higher prepandemic era average, and accelerate convergence toward higher income levels. Multilateral cooperation is needed to limit the costs and risks of geoeconomic fragmentation and climate change, speed the transition to green energy, and facilitate debt restructuring.

Indian Economic Review

Amidst global uncertainty, the Indian economy exhibited remarkable performance in FY 2024, with real GDP growth rising to 8.2% from 7.0% in FY 2023, driven by strong fixed investment, as per provisional estimates from the National Statistical Office (NSO). During this period, headline inflation eased into an acceptable range due to anti-inflationary monetary policies, effective supply management, and adjustments in global commodity prices. Core inflation sequentially moderated from 5.2% in May 2023 to 4.2% in October 2023 and further to 3.2% in April 2024, registering a decline of about 2 percentage points, indicating a decrease in both goods and services inflation. Assuming a normal monsoon, the CPI inflation for 2024-25 is projected at 4.5%. Monetary policy must remain focused on disinflation, maintaining a steadfast commitment to achieving a long-term inflation target of 4.0%. Sustained price stability will lay a strong foundation for a high-growth period. (Source: RBI)

Despite Indias economic growth, recent months have seen rising inflation and a weakening rupee. This could impact gold prices in two ways: increased import costs and inflation driving domestic prices higher. These factors may reduce overall consumption, particularly among price-sensitive rural consumers, leading to uncertainties in discretionary spending. During periods of extreme market volatility, customers often hesitate and wait for the opportune moment to make their purchase decisions.

Outlook

, India has achieved the highest growth among major , advanced and emerging market economies in FY2023- , 24. According to the IMF, India is projected to become the third-largest economy by 2027 in USD terms at _t 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. The Reserve Bank of India has revised its real GDP growth forecast for FY25 to 7.2% from the previous 7 percent due to improved rural and urban demand, bolstered by monsoon predictions. The growth outlook remains positive, bolstered by the governments ongoing focus on capital expenditure and fiscal consolidation.

Indias Growth Forecast

The Global Jewellery Industry Overview

There is a rising trend in global jewel consumption as more people are inclined toward luxurious products. Various positive attributes of the product include assisting in highlighting specific features of the body, showcasing fashion trends/style, helping to enhance looks, and others. The products growing popularity among high-income earners as a symbol of high status is helping to accelerate the consumption rate. Rising demand for contemporary jewels and an increasing number of designers entering the market continue contributing to market growth. The global gold jewellery market will grow during the forecasted period due to rising GDP per capita, increasing consumer disposable income, and the appeal of gold as a long-term investment.

Global Jewellery Market

Share by product type, 2023 (%)

Market Size

The Global jewellery market size was valued at USD 224.39 billion in 2023 and is projected to grow from USD 232.94 billion in 2024 to USD 343.90 billion by 2032, exhibiting CAGR of 4.99% during the forecast period. (Source: Fortunate Business Insight)

THE INDIAN GOLD MARKET OVERVIEW Overview

Indias strong affinity for gold and its deep cultural significance have created the growth of a vibrant gold- based financial market. Gold serves multiple purposes, including preserving wealth, hedging against inflation, and acting as collateral for loans. Consequently, India has become the fifth-largest importer of gold and holds one of the worlds largest gold reserves. (Source: Statista)

With rising disposable incomes and technological advancements, the demand for both traditional and contemporary jewellery is rising. The market also sees a growing preference for lightweight and fusion jewellery that appeals to modern tastes. Retail sales are boosted by consumer spending during weddings and traditional occasions such as Dhanteras, Akshaya Tritiya, Baisakhi, Karva Chauth, Durga Puja, Gudi Padwa. (Source: TECHNAVIO) Bridal jewellery is a major market driver, especially in India, where substantial spending on wedding ceremonies and celebrations positively impacts market growth. Gold jewellery demand and ownership is higher in rural India and rises with income levels. Bridal jewellery accounts for 50-55% of the gold jewellery market. Gold continues to be a timeless favourite, showcasing Indias enduring appreciation for precious metals and intricate craftsmanship. (Source: Technavio)

Market Size

The India jewellery market size was estimated at USD 85.52 billion in 2023 and is expected to grow at a CAGR of 5.7% from 2024 to 2030. In FY23 India jewellery market accounted for the share of 24.21% of the global jewellery market. Meanwhile, gold jewellery accounted for a revenue share of 77.72%. (Source: Grand View Research) The Indian gold market has experienced 6-7 % growth in the first quarter of 2024. (Source: Deccan Herald)

Gold prices in India have seen significant fluctuations and increases over the past few years. In year 2022, the price of gold was H52,670 (24 Karat per grams), which jumped to H65,330 in 2023, and has further increased to H74,175 in 2024. The rise in gold prices in 2023 was notable, with a gain of almost H3,000, marking an increase of approximately 6.5% over the first six months of the year. This upward trend can be attributed to various factors including the Russia- Ukraine war, the US Federal Reserves rate increases, and inflation. These geopolitical and economic factors have significantly influenced the gold market, leading to the observed price hikes. ( Source: bankbazaar)

Despite high gold prices, retail sales remained resilient, especially during the festive season, which was one of the most successful in recent years, reflecting strong consumer confidence. South India leads in gold jewellery consumption, accounting for 40% of the countrys total demand. (Source: WGC) Indias gold consumption is expected to stay robust in 2024, estimated between 700 to 800 tonnes, with South India being a major contributor (Source: Deccan

Herald). Plain gold jewellery continues to hold 80-85% of the market share, predominantly 22-carat, although the market for 14-18-carat jewellery is expanding.

India, the worlds second-largest consumer of gold jewellery, has faced notable changes in recent years due to shifting demographics. Long-term demand for gold jewellery in India will be influenced by factors such as economic growth, rising incomes, wealth distribution, and the pace of urbanisation. (Source: World Gold Council) Gold remains the most popular and durable material for jewellery in India, maintaining its status as the preferred choice for adornments.

*Data as of 31 December 2023 Source: Metals Focus, World Gold Council

Key Growth Drivers

The Indian jewellery market size was estimated at USD 85.52 billion in 2023 and to understand the market better, let us look at the sectors growth drivers.

The Hyperlocal Approach

Indian jewellery preferences are highly diverse, with distinct regional styles, varying budgets, and a wide range of traditions. Consequently, demand is very localised. The most effective approach is to establish a strong local presence while maintaining national branding. By connecting with local communities and adopting a nuanced strategy, one can become a truly national brand. This will enable us to generate revenue from all parts of the country.

The South, where classic gold designs reign supreme, is a huge market, making up 40% of Indias gold jewellery demand. In the East (15%), theres a strong appreciation for jewellery in general. The North and West offer a captivating mix, appealing to those who love both traditional and diamond-studded pieces.

The Indian Jewellery Retail Market Break-up by Region:

Jewellery demand experiences pronounced seasonality, driven by weddings, festivals, and agricultural harvests in rural areas. Specific to each region, these events play a pivotal role in driving growth. The unique seasonality of jewellery demand necessitates a deep understanding of local consumer preferences, tailored marketing approaches for diverse audiences, localised sourcing and product strategies, and substantial working capital.

Because jewellery preferences are so local, its tough for businesses to break out of their own area. Very few local jewellers have managed to become regional players, and even fewer have gone national. This hyperlocal trend highlights the importance of having a smart and strategic approach to reach all these different markets. Basically, you need a clever plan to cater to all these diverse tastes.

OUR RESPONSE

At Kalyan Jewellers, our hyperlocal approach is essential to catering to diverse geographies and customer segments. We conduct state and city- specific brand campaigns with ambassadors who appeal nationally, regionally, and locally, ensuring communication in local languages. Our product portfolio is tailored to local market preferences, engaging local artisans and operating 13 procurement centres to reflect cultural heritage. Our showrooms are staffed with individuals who speak local languages and understand local cultures, creating a welcoming environment. Additionally, our "My Kalyan" network, with 4,003 dedicated personnel, focuses on grassroots outreach across urban, semi-urban, and rural areas, ensuring personalised customer interactions. This comprehensive localisation strategy enables us to connect deeply with our customers and reinforce our reputation as a trusted jeweller.

E-commerce Transforms Jewellery Market

The rise of e-commerce in the jewellery market in India has been significant in recent years. With the increasing popularity of online shopping, many jewellery brands and retailers have established an online presence to reach a wider customer base. This has led to increased competition and innovation in the industry, as well as changes in consumer behaviour and preferences. Additionally, the use of technology and digital marketing has become crucial for success in the e-commerce space.

Our Response

At Kalyan Jewellers, we recognise the transformative impact of e-commerce on the jewellery industry and are proactively adapting to this shift. The rise of e-commerce has enabled us to expand our reach beyond physical showrooms, providing customers with the convenience of shopping for their favourite jewellery pieces from the comfort of their homes.

Source: Investor Presentation

Furthermore, our acquisition of Candere, a leading online jewellery store, has significantly bolstered our online capabilities. Canderes expertise in the online market complements our offline strengths, to develop a robust omni-channel platform and an enriched shopping experience.. This partnership exemplifies our commitment to innovation and growth in the digital space, ensuring that we remain at the forefront of the jewellery industry.

This integration of e-commerce with our traditional retail strengths ensures that we continue to deliver the exceptional quality and service at Kalyan Jewellers. Embracing e-commerce allows us to reach a broader audience, stay competitive, and meet the growing demand for online shopping. All this is achieved while maintaining the core values of our brand.

Indias Jewellery Market Formalises

The retail jewellery market has undergone notable changes over the last decade, driven by evolving consumer preferences and government regulation that has encouraged the industry to become more organised. That said, a large part of the industry remains fragmented and dominated by independent retailers. There is no single industry definition to distinguish between unorganised and organised retailers. For the purpose of this analysis, Metals Focus has considered jewellers who sell gold via invoice, have proper banking , channels and enterprise resource planning (ERP) systems in place, and are registered under the Bureau _; of Indian Standards (BIS) as organised jewellers.

I Rising Share of Organised Retail in l Jewellery to Continue

Over the last few years demonetisation and the introduction of the Goods and Services Tax (GST) have helped the industry to become more organised and therefore more transparent. In response to these regulatory changes, many jewellers have adopted proper accounting software and now record sale proceeds via an official bill and maintain books of accounts. It is worth noting that a number of jewellers in large cities and towns belong to the organised sector. However, the unorganised sector still dominates most parts of the country, including large cities, accounting for over 60% of the overall Indian jewellery industry.

Changing consumer preferences have also aided industry organisation. Consumers desire a better shopping experience, transparent pricing and buyback policies, and they want to purchase via bills and online transactions.

Our Response

As a pioneer in the organised retail sector, Kalyan Jewellers has successfully transitioned from traditional retail formats to a modern, structured approach. This shift has not only streamlined our operations but also enhanced our customer experience through well- defined processes and standardised services across our numerous outlets. Our commitment to transparency and customer satisfaction is evident in our extensive network of showrooms, each designed to provide a consistent and high-quality shopping environment.

Our organised approach to work is reflected in our comprehensive supply chain management, from sourcing raw materials to delivering finished products. We have established strong relationships with local artisans and manufacturers, ensuring that our jewellery not only meets the highest standards of quality but also resonates with the cultural preferences of our diverse customer base.

Focus on Rural/Semi-Urban Markets

Jewellery isnt just a fashion statement in rural and semi-urban India, its deeply ingrained in the culture. This vibrant market segment makes up over half of the total demand for gold jewellery in the country. People here have a strong traditional affinity towards gold, creating a fertile ground for continued growth in this sector.

Gold Jewellery Demand and Ownership is Higher in Rural India and Rises with Income Levels

Furthermore, government initiatives that aim to revitalise the rural economy by investing in infrastructure, agriculture, and improving livelihoods will act as a catalyst, further boosting the demand for jewellery. This presents a significant opportunity for the jewellery industry.

However, theres a hurdle to overcome. Organised jewellery retailers havent yet fully penetrated the rural market. The main challenge lies in the higher costs associated with setting up and running stores in these areas.

Despite this obstacle, the potential of rural India is undeniable. By finding ways to overcome these barriers, the jewellery industry can bring the elegance and beauty of exquisite jewellery to every corner of the nation, unlocking the vast potential of this golden market.

Our Response

At Kalyan, we recognise the immense potential within Indias rural and semi-urban markets. These regions are not only underserved but also represent a rapidly growing segment that aligns perfectly with our strategic vision. Our focus is on tailoring products and services to meet their unique needs, ensuring accessibility and relevance.

The growth in Tier 2 and Tier 3 cities has been noteworthy, driven by rising incomes and increased consumer spending power. These cities are becoming vibrant economic hubs, offering significant expansion opportunities. We aim to capture loyalty in these emerging markets by investing in localised marketing, expanding distribution networks, and enhancing our digital presence.

Despite the challenge of higher costs associated with setting up and running stores in these areas, we have successfully navigated this hurdle with initiatives like MYKalyan. MYKalyan allows us to streamline operations, optimise costs, and enhance efficiency, ensuring sustainable growth and long-term value creation for our stakeholders. This approach not only supports our growth ambitions but also fosters inclusive economic development across the country..

Performance in FY24

In FY24, the domestic organised jewellery retail industry in India demonstrated robust performance, benefiting from several positive factors. Despite challenges such as volatile gold prices and inflation, the industry saw significant growth. One key driver was the continued expansion into Tier 1 and Tier 2 cities, which contributed to higher sales volumes. Organised retailers capitalised on their strong balance sheets to fund store expansions, resulting in doubledigit growth post-pandemic.

The industrys revenues were strengthened by strategic marketing and branding efforts. Organised players leveraged digital platforms to enhance their reach, while also benefiting from a gradual shift in consumer preferences towards branded and certified jewellery. This shift was partly due to the increasing awareness of quality and trust associated with organised retail.

Despite a 14.94% decline in gems and jewellery exports, the domestic market remained resilient. The expanding middle class and urbanisation trends have fuelled demand for luxury items, including jewellery. Moreover, government initiatives such as the Goods and Services Tax (GST) and various gold monetisation schemes have supported industry growth by simplifying the business environment and promoting ethical sourcing..

Overall, FY24 was a year of strong performance for the organised jewellery retail sector in India, with sustained growth driven by market expansion, digital transformation, and evolving consumer preferences.

Sources: https://www.ibef.org/industry/gems- jewellery-india

https://www.fortuneindia.com/investing/gold-iewellery-demand-in-india-to-iump-11-in-fy23-icra/108001

Outlook

Organised retailers are projected to continue gaining market share from their unorganised counterparts, driven by evolving consumer preferences and expansion into Tier 2 and Tier 3 cities. With strong balance sheets, store expansions have seen significant double-digit growth since the pandemic. The sectors outlook remains stable, supported by expected steady revenue and earnings growth.

COMPANY OVERVIEW

Established in 1993 by Mr. T.S. Kalyanaraman, Kalyan Jewellers has grown to become one of Indias largest and most respected jewellery companies. Rooted in a rich family legacy and decades of industry expertise, Kalyan Jewellers has built a robust brand synonymous with trust and transparency. Our pioneering efforts in introducing transparency and consumer-friendly measures have set us apart in the jewellery sector.

Our extensive product portfolio includes a wide range of gold, studded, and other jewellery items, catering to diverse customer preferences and various price points. With a Pan-India presence and scaled operations in the Middle East, Kalyan Jewellers has a significant global footprint. Our hyperlocal business model allows us to effectively localise our offerings, ensuring we meet the unique tastes and cultural preferences of our diverse clientele.

We emphasise localisation in all aspects of our business. Our brand communication and marketing strategies are tailored to specific states and cities, utilising brand ambassadors with national, regional, and local appeal. In our showrooms, we create a welcoming environment by employing staff who speak the local language and understand the local culture. This ensures that our showrooms reflect the tastes and sensibilities of the communities they serve.

Kalyan Jewellers continues to uphold its tradition of excellence by offering quality products and exceptional customer service. Our dedication to localisation and customer-centricity has solidified our reputation as Indias trusted jeweller, committed to exceeding the expectations of our diverse customer base.

SWOT ANALYSIS Strengths

1. Strong Brand Recognition: Kalyan Jewellers is a well-established name in the jewellery market with a significant presence across India. The brands reputation for quality and trustworthiness draws in a large customer base.

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

3. Extensive Network: With numerous stores across urban, semi-urban, and rural areas, Kalyan has a broad geographical footprint that facilitates accessibility for a wide customer demographic.

4. Innovative Marketing Strategies: The companys effective use of celebrity endorsements and advertisement campaigns, both localised and national, strengthens brand appeal and customer loyalty.

5. Digital Presence: An integrated online platform complements physical stores, enabling seamless shopping experiences and capitalising on the burgeoning trend of digitally originated business. Robust Governance Framework: Kalyan Jewellers distinguished Board of Directors comprises individuals from diverse backgrounds, bringing a wealth of experience and expertise. Kalyan Jewellers takes pride in having an independent director as the Chairman of the Company, ensuring strong governance and strategic leadership.

6. Pan-India Player: Kalyan Jewellers is one of Indias largest jewellery companies with a pan- India network of showrooms

Weaknesses:

1. Dependence on the Indian Market: A substantial portion of revenue is derived from the Indian market, making the company vulnerable to domestic economic fluctuations and policy changes.

Opportunities:

1. Expansion in Rural and Semi-Urban Markets:

With rising incomes and aspirations in these regions, there is a significant growth potential by further penetrating these underserved markets.

2. Growing Online Sales: The shift towards online shopping represents a significant opportunity to enhance our omni-channel strategy and extend our reach to a wider audience. While focusing solely on online channels may have limited growth prospects in India in the near term, integrating omni-channel capabilities allows us to leverage both online and offline strengths for sustainable growth.

3. Category Expansion: We will be looking for opportunities in the emerging categories within the jewelry segment, such as lightweight and everyday wear jewelleries.

4. Global Expansion: Entering new international markets, especially in regions with high Indian diaspora, can diversify revenue streams and reduce dependency on the domestic market.

Threats:

1. Economic Downturns: Prolonged economic instability or downturns can impact discretionary jewellery spends.

2. Intense Competition: The jewellery market is highly competitive with numerous players, both large and small, which can impact market share and pricing strategies.

Operational Performance

Kalyan Jewellers has achieved remarkable success, witnessing strong growth in footfalls, revenue, and profitability across all markets. Kalyan Jewellers experienced a significant increase in return ratios, showcasing resilience and adaptability. Indias standalone revenue grew substantially, reaching H1,57,826 million in FY24 from H1,15,840 million in FY23. This growth is complemented by an improved

EBITDA, which rose from H9,331 million in FY23 to H11,157 million in FY24.

The number of showrooms also expanded notably. By FY24, Kalyan Jewellers operated 204 showrooms in India, up from 147 in FY23, and 36 showrooms in the Middle East, an increase from 33 in the previous year. Additionally, during FY24, we launched first FOCO showroom in the Middle East and have plans to convert showrooms and optimise capital employed in FY25 and beyond. This growth in physical presence further cements the companys market dominance and accessibility to a broader customer base. Furthermore, the performance of Candere, Kalyans digital-first platform, was bolstered with the launch of its first FOCO (Franchise Owned Company Operated) showroom in FY24, leading to a total of 13 showrooms - 8 FOCO and 5 COCO, by March 31, 2024. This strategic move enhances Canderes operational efficiency and expands its market reach. In FY 24 Canderes Revenue reached H1,303 mn.

FINANCIAL PERFORMANCE FY24

Summary of consolidated profit and loss

Particulars	FY24	FY23	YoY
Revenue	1,85,483	1,40,714	31.8%
Gross Profit	27,137	21,992	23.4%
Gross Profit Margins (%)	14.6%	15.6%
Total Operational Expenses	14,010	10,852	29.1%
Advertisement and Promotion Expenses	3,553	2,881	23.3%
Other Operational Expenses	10,458	7,971	31.2%
EBITDA	13,127	11,140	17.8%
EBITDA Margin (%)	7.1%	7.9%
Depreciation	2,743	2,446	12.2%
EBIT	10,384	8,694	19.4%
EBIT Margin (%)	5.6%	6.2%
Finance Costs	3,232	3,026	6.8%
Other Income	737	379	94.5%
Profit before exceptional items & tax	7,888	6,048	30.4%
Profit before exceptional items & tax margin (%)	4.3%	4.3%
Exceptional Items	-	333	(100%)
PBT	7,888	5,715	38.0%
PBT Margin (%)	4.3%	4.1%
PAT	5,963	4,319	38.1%
PAT Margin (%)	3.2%	3.1%

Revenue from Operations

The revenue from operations for FY24 reached H185,483 million, marking a 31.8% increase from H140,714 million in FY23 This growth was driven by strong same-store sales growth, particularly in both South and Non-South regions, strategic expansion through new showroom openings, and a favourable product mix with higher share of revenue from the studded jewellery. Additionally, the Middle East segment contributed positively with a 12% rise in revenue, driven predominantly by same-store-sales- growth.

Cost of Sales

Cost of sales increased to H158,346 million from H118,722 million in previous year. There is a 33.4%increase in cost of sales, attributed to several factors, including higher raw material costs driven by the expansion of new showrooms, and increased sales driven by strong consumer demand.

Employee Expenses

Employee expenses increased from H4,406 million in FY23, to H6,064 million in FY24 driven primarily by the significant increase in the employee base during FY24 to take care of the showroom network expansion. We added 1,629 employees during FY24. In addition to the above, a portion of our employee remuneration is in the nature of sales incentive and as the revenue increased, there was a commensurate increase in the employee incentives. Employee expenses as a percentage of revenue increased from 3.1% in FY23 to 3.3% in FY24. This rise occurred because we front- loaded employee expenses due to the significant increase in showroom openings—from 23 in FY23 to 58 in FY24 . With the substantial expansion in showrooms, there was a corresponding increase in showroom staff. We typically recruit employees 4-5 months before a showroom opens for training, leading to upfront costs without immediate revenue generation from these employees.

Other Expenses

Other expenses include advertisement, sales promotion and other administrative expenses. In FY24, the total "Other expenses" amounted to H7,947 million, which included H3,553 million for advertisement and promotion expenses, and H4,394 million for other administrative expenses. The total "Other expenses" represented 4.3% of the revenue for FY24, against 4.6% in FY23.

EBITDA

; EBITDA increased from H11,140 million to H13,127 million ⁵ in FY24 (an increase of about 17.8%). Although EBITDA increased year-on-year, the EBITDA margin decreased from 7.9% in FY23 to 7.1% in FY24.The decrease in EBITDA margin in FY24 can be attributed primarily i to two key factors. Firstly, there was a significant ; increase in the proportion of revenue contributed 1 by FOCO showrooms, which typically yield lower ; EBITDA margins compared to the company-owned > showrooms. This shift was notable because all 58 showrooms opened during the year were operated ; under the franchise model. Secondly, the frontloading of employee expenses also played a role in i compressing the EBITDA margin during the year.

Net Profit

The PAT margins have shown a slight increase from ^; 3.1% in FY23 to 3.2% in FY24.

Liabilities

Particulars	FY24	FY23
Equity Share Capital	10,301	10,301
Other Equity	31,590	26,047
Non-controlling Interests	(13)	(2)
Non-current Liabilities	10,472	7,097
Current Liabilities	75,828	63,687
Total	128,177	107,129
Assets
		(in H million)
Particulars	FY24	FY23
Non-Current Assets	28,687	21,971
Current Assets	98,151	83,819
Assets held-for-sale	1,339	1,339
Total	128,177	107,129

Key Ratios

Particulars	FY24	FY23
Gross Profit Margin	14.6%	15.6%
EBITDA Margin	7.1%	7.9%
EBIT Margin	5.6%	6.2%
Profit before exceptional item & tax Margin	4.3%	4.3%
PBT Margin	4.3%	4.1%
PAT Margin	3.2%	3.1%
Inventory Turnover	2.07%	1.85
Interest Coverage Ratio	4.06	3.68
Current Ratio	1.29	1.32
Net Debt to Equity Ratio	0.56	0.70
ROE	15.2%	12.8%
ROCE	19.8%	20.0%

Gross profit margin = Gross profit/Revenue from operations

EBITDA Margin = Earnings before interest, tax, depreciation and amortisation (EBITDA)/Revenue from operations EBIT Margin = Earnings before interest and tax (EBIT)/Revenue from operations

Profit before exceptional item & tax margin = Profit before exceptional item & tax/Revenue from operations Profit before tax margin = Profit before tax (PBT)/Revenue from operations Profit after tax margin = Profit after tax (PAT)/Revenue from operations

Inventory turnover = (Cost of materials consumed + Changes in inventories of finished goods and work-in- progress)/Average Inventory

Interest coverage ratio = Earning before interest, tax, depreciation and amortisation (EBITDA)/Finance cost

Current ratio = Current Assets/Current Liabilities

Net debt to equity ratio = Net Debt (including GML)/Total Equity

Return on equity = Net Profit after tax/ Average Total Equity

Return on capital employed = Earning before Interest and tax (EBIT) /(Total Equity + Non-current liabilities).