Kenrik Industries Ltd Management Discussions

The management discussion and analysis report provide an over view of the financial activities for the fiscal year ended on 31^stMarch 2026, gives an overall sight of the spinning industry, opportunities and threats in the business and Companys strategy to deal with that. This report is designed to focus on current years activities, resulting changes and other known facts in conjunction to the financial and strategic position of the Company.

GEMS & JEWELLERY INDUSTRY STRUCTURE AND DEVELOPMENTS

The Indian jewellery industry remains a cornerstone of the nations retail sector, with gold and diamond jewellery continuing to be in high demand across urban and rural markets. In FY 2025 26, despite inflationary pressures and global economic uncertainty, the industry-maintained resilience, supported by cultural affinity towards gold, rising disposable income, and increased digital penetration. Organized jewellery retail continued gaining ground, driven by consumer preference for trust, certification, and transparent pricing.

KEY INDUSTRY TRENDS:

Gold Price Dynamics and Their Impact on Demand: Gold prices experienced a historic rally in FY

2025-26, with international prices gaining approximately 50%+ year-to-date and domestic prices rising approximately 73%, aided by a 5.6% depreciation in the INR. Domestic gold prices reached INR 1,69,403 per 10 grams as of January 2026 the highest annual price increase for gold globally since 1979. Sustainability and Ethical Sourcing: Consumer consciousness around environmental and social impact is a growing influence on purchase behaviour, particularly among younger, urban demographics. Demand for responsibly sourced materials, transparent supply chains, recycled gold, conflict-free diamonds, and eco-friendly packaging is rising. Lab-grown diamonds are increasingly positioned as the sustainable alternative a narrative that resonates strongly with Gen Z and millennial buyers. Digital Transformation and Omnichannel Growth: Digital adoption in jewellery retail has accelerated well beyond the initial post-pandemic phase. E-commerce platforms now influence over 60% of purchase decisions in metro cities. Several jewellery companies reported annual e-commerce revenue growth exceeding 100% during the festive season of FY 2025-26. Augmented reality virtual try-on technology has reduced product return rates by over 25%, improving operational efficiency. Competitive Landscape: The competitive landscape in Indias organised jewellery retail continues to evolve rapidly. National brands are competing aggressively on store expansion, digital capabilities, product innovation, and customer relationship management. Regional and digitalfirst jewellers are carving niches through design differentiation, customisation, and omnichannel excellence. Consolidation is expected to accelerate as larger players acquire or partner with smaller, niche brands.

*(Data has been retrieved through various sources)

GOVERNMENT INITIATIVES AND BUDGETARY SUPPORT

The Indian government has introduced several measures to support and promote the gems and jewellery industry:

Customs Duty Reduction: In Union Budget 2025 26, the tariff rate on articles of jewellery and parts thereof under heading 7113 and goldsmiths/silversmiths wares under heading 7114 was reduced from 25% to 20%, effective May 1, 2025. Taxation Reforms: Government export-promotion initiatives seek to assist Indian jewellery businesses in entering new international markets and reducing dependence on traditional export destinations. Hallmarking Regulations: The mandatory hallmarking framework continues to promote purity, transparency and consumer confidence in gold jewellery. The HUID system enables consumers to verify the authenticity and purity of hallmarked jewellery. Export Promotion Mission: The Government announced the Export Promotion Mission with an outlay of 25,060 crore for FY 2025 26 to FY 2030 31 to strengthen export competitiveness, market access and trade finance. Support for MSMEs and Artisans: The government has introduced schemes like PM Vishwakarma, PM SVANidhi, and Stand-Up India to support artisans and MSMEs in the gem and jewellery sector. Additionally, the introduction of the Parichay Card facilitates access to social security benefits for workers.

OPPORTUNITIES AND THREATS FOR INDUSTRY

OPPORTUNITIES:

Growing Preference for Branded Jewellery: The shift towards organized retail and branded jewellery is gaining momentum, driven by consumer trust and transparency. Expansion Potential in Tier-II and Tier-III Cities: There is significant growth potential in smaller cities and towns, where organized retail penetration is still low. Rising Demand for Lightweight and Contemporary Designs: Changing consumer preferences towards lightweight and daily wear jewellery present new avenues for growth.

THREATS:

Fluctuations in Gold Prices: Volatility in gold prices can impact consumer purchasing behaviour and profit margins. Regulatory Changes: Changes in taxation and import duties can affect cost structures and profitability. Competition from Unorganized Sector: The unorganized sector continues to pose a challenge, especially in price-sensitive markets.

Despite these risks, the gems and jewellery industry is a resilient industry, and it is expected to continue to grow in the coming years. In India this industry is one of the largest contributors to the global jewellery & diamond market and occupies a very significant position in the Indian economy.

Investment in sustainable jewellery has surged as consumers prioritize ethical and environmentally conscious choices.

GEMS AND JEWELLERY MARKET SIZE

Indias jewellery retail sector continued to witness healthy growth during Fiscal 2025 26, supported by rising disposable incomes, increasing consumer preference for branded and organised jewellery retailers, changing jewellery consumption patterns and growing demand for contemporary designs and diamond-studded products. The continued expansion of organised retail, mandatory hallmarking and improved consumer buying experience have further contributed to the formalisation of the jewellery retail market.

The Indian gems and jewellery market was estimated at approximately US$85 billion ( 7.31 lakh crore) in 2025 26 and is expected to reach approximately US$130 billion by 2030, driven by increasing urbanisation, higher consumer spending, premiumisation, greater trust in organised retailers and the continued cultural significance of gold jewellery in India. The sector is also expected to benefit from increasing adoption of digital channels, wider retail networks and evolving consumer preferences towards branded and certified jewellery.

EXPORT

As per Ministry of Commerce and Trade:

During FY 2025 26, Indias total exports of merchandise and services were estimated at US$ 860.09 billion, reflecting the continued strength and resilience of Indias external trade.

During FY 2025 26, non-petroleum and non-gems & jewellery exports remained a significant component of Indias export basket, while gems and jewellery exports continued to contribute substantially to the countrys merchandise exports, supported by sustained demand from key international markets.

FUTURE OUTLOOK

The Indian gems and jewellery industry is expected to witness sustained growth during FY 2025 26, driven by rising disposable incomes, urbanisation, changing consumer preferences and increasing demand for branded, certified and organised jewellery. The sector is expected to benefit from continued formalisation, mandatory hallmarking, premiumisation, expansion of organised retail, adoption of digital and omnichannel platforms and growing preference for contemporary and lightweight jewellery. Government initiatives supporting exports, quality standards, financing and ease of doing business are also expected to strengthen the industrys competitiveness and provide opportunities for organised jewellery retailers and manufacturers.

RISKS & CONCERNS

The company faces various risks, including fluctuations in gold prices, regulatory changes, and economic downturns. To mitigate these risks, Eighty Jewellers Limited employs a robust risk management framework, focusing on diversification, hedging strategies, and compliance with regulatory requirements.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has in place an adequate system of internal control commensurate with its size and nature of business. The system provides a reasonable assurance in respect of providing financial and operational information, complying with applicable statutes, safeguarding of assets of the Company and ensuring compliance with corporate policies.

Your Company has a business planning system to set targets and parameters for operations which are reviewed with actual performance to ensure timely initiation of corrective action, if required.

CAUTIONARY STATEMENT

The above Management Discussion and Analysis describing the Companys objectives, projections, estimates and expectations may be “forward looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make a difference to the Companys operations include external economic conditions affecting demand/supply influencing price conditions in the market in which the Company operates changes in Government regulations, tax laws, and other incidental factors.

	For and on behalf of Board of Directors,
	KENRIK INDUSTRIES LIMITED
	Sd/-
	Nitin Dalpatlal Shah
Place: Ahmedabad	Chairman and Managing Director
Date: September 02, 2026	DIN: 07715360