Manoj Vaibhav Gems N Jewellers Ltd Management Discussions

1. Economic Review

Global Economy

The global economic environment in 2024-25 was shaped by a complex set of challenges, including geopolitical conflicts, trade policy uncertainties, and climate-related disruptions. Key electoral events in major economies, such as India, the United States, and Indonesia, contributed to political volatility and heightened investor uncertainty.

Ongoing conflicts like the Russia-Ukraine war and unrest in the Middle East disrupted global trade routes and energy markets, resulting in elevated commodity prices and persistent inflationary pressures. According to the International Monetary Fund (IMF), global GDP growth is projected at 3.3% for both 2025 and 2026. However, the medium-term outlook remains fragile, with concerns over fiscal sustainability, financial stability, and policy-induced disruptions.

I n addition, the global trade landscape continues to shift with the increasing adoption of protectionist policies, such as the recent U.S. tariff announcements, which have introduced new layers of uncertainty and market volatility. These developments could trigger retaliatory trade measures, force realignments in supply chains, and further complicate global trade dynamics.

Outlook-Global Economy

The global economy is expected to maintain modest growth amid rising risks. Companies will need to remain agile, closely monitor geopolitical developments, and diversify supply chains to mitigate potential disruptions. While growth prospects exist, especially in resilient emerging markets, volatility is likely to persist in the near term.

Outlook-Indian Economy

Despite global headwinds, the Indian economy showed impressive resilience, for the full fiscal year 2025, the economy expanded by 6.5%, in line with the governments forecast. This performance has been supported by a strong performance in both the agriculture and services sectors.

The agriculture sector benefited from record Kharif crop production and favourable monsoon patterns, while the services sector-maintained momentum across key areas such as financial services, real estate, and professional services. High-frequency indicators like the Services PMI, air passenger traffic, and hotel occupancy rates confirm ongoing strength in domestic consumption and services activity.

Looking ahead to FY26, GDP growth is projected to range between 6.3% and 6.8%, driven by robust domestic demand, increased public capital expenditure, and rising business confidence. However, external risks·including global geopolitical tensions, volatile energy markets, and evolving trade policies· remain key downside factors.

Outlook-Indian Economy

India is well-positioned for sustained medium- term growth, supported by structural reforms, infrastructure investments, and strong macroeconomic fundamentals. Continued focus on deregulation, digital innovation, and policy stability will be critical to enhancing competitiveness and cushioning the economy against global uncertainties.

2. Industry Review

2.1 Global Jewellery Industry

According to Fortune Business Insights, the global jewellery market was valued at USD 232.94 billion in 2024 and is projected to grow to USD 343.90 billion by 2032, expanding at a Compound Annual Growth Rate (CAGR) of 5.10% during the forecast period. In 2024, the Asia Pacific region led the global market, accounting for a 39.28% share, underscoring its position as a key growth driver in the sector.

Key Growth Drivers

• Rising affinity for luxury: There is a noticeable increase in jewellery consumption, driven by growing consumer interest in luxury and lifestyle products. Jewellery is increasingly viewed not just as an accessory, but as a means of self-expression, status symbol, and personal enhancement.

• Fashion & style influence: Jewellery plays a pivotal role in highlighting specific features, complementing fashion trends, and enhancing overall appearance·factors that continue to resonate with fashion-forward consumers.

• Affluent consumer segment: The rising number of high-income consumers using jewellery as a marker of wealth and sophistication is accelerating demand, particularly in premium product categories.

• Contemporary designs & new entrants: The market is also witnessing a surge in demand for modern and innovative jewellery designs, alongside a growing number of independent designers and emerging brands entering the space, which is fuelling product diversity and consumer engagement.

Outlook

The global jewellery industry is on a strong upward trajectory, supported by shifting lifestyle preferences, the premiumisation trend, and regional growth in Asia Pacific. Brands that focus on innovation, personalisation, and ethical sourcing are expected to gain competitive advantage in this evolving market.

2.2. Indian jewellery industry

Indias gems and jewellery market is poised for significant expansion, with the market size projected to reach USD 128 billion by 2029, growing at a CAGR of 9.5%, according to 1 Lattices report Glimmers of Growth. This growth trajectory is underpinned by rising disposable incomes among the middle class, increasing preference for certified and branded jewellery, and the rapid adoption of digital retail platforms.

• Indias jewellery production is anchored by renowned clusters such as Surat, Mumbai, Jaipur, Thrissur, and Coimbatore, each specialising in distinctive craftsmanship and regional styles.

• Evolving consumer preferences reveal a clear shift towards minimalistic, personalised, and sustainable jewellery, with buying behaviour influenced by region, age, and gender.

Market Composition

• Gold remains dominant, contributing 86% of the total market, reflecting continued cultural affinity and investment value.

• Government initiatives, including the reduction in gold import duties and mandatory hallmarking, have enhanced consumer trust and improved affordability.

• Digital transformation·driven by features such as virtual try-on tools, AI-powered personalisation, and social media engagement·is reshaping consumer behaviour, particularly among the younger demographic.

• Growth drivers

Cultural seasonality and festive buying patterns

Jewellery demand in India is closely linked to cultural events, with weddings, festivals, and harvest seasons playing a crucial role in shaping purchase trends. Demand peaks during months such as May-June, September-December, and January, coinciding with the wedding season and festivals like Diwali, Dhanteras, and Akshaya Tritiya. In rural regions, post-harvest income cycles significantly influence gold purchases, especially in Tier II and Tier III towns where consumption is tied to agricultural output and monsoon performance.

Rising disposable income and economic expansion

The middle-income group remains the largest gold consumer segment by volume, while the affluent class leads in per capita consumption. Rising incomes, coupled with Indias demographic dividend, continue to drive long-term gold demand.

Evolving consumer preferences and global influence

Indian consumers are increasingly exposed to global fashion trends, with social media and influencers shaping preferences. This has led to growing interest in minimalistic, personalised, and sustainable jewellery. Technological innovations such as smart jewellery and 3D-printed designs also appeal to the modern, tech- savvy buyer.

Rising preference for branded jewellery

There is a marked shift toward branded jewellery driven by consumer expectations around quality, transparency, and trust. Organised retailers, known for consistent service and certification, have earned greater market share by offering well-curated experiences. Todays consumers, particularly the youth, view branded jewellery as a combination of prestige and value.

Accessible gold investment options

Gold savings schemes offered by organised retailers allow consumers to invest gradually over time and avail purchase benefits such as lower making charges or free instalments. Additionally, gold loans, widely used by lower- and middle-income groups, offer liquidity during emergencies, making gold both a fashion asset and a financial security.

Demand for trust, transparency, and innovation

Consumers today expect full transparency on pricing and quality. Organised retailers offering hallmarked products, certified gemstones, and clear cost breakdowns are better positioned to gain consumer trust. Demand for affordable and fashionable alternatives like stainless steel, plated metals, and cubic zirconia is also rising.

Lab-Grown Diamonds: A High-Growth Segment

• The Indian lab-grown diamond (LGD) market is expected to reach USD 1.2 billion by 2033, growing at a CAGR of nearly 15%.

• LGD exports have surged eightfold since FY21, with India contributing approximately 15% of global LGD production.

• LGDs are gaining traction due to their affordability, ethical sourcing, and environmental sustainability, aligning well with ESG principles.

• However, the absence of domestic HPHT machine fabrication presents an opportunity for upstream investments to strengthen the local LGD supply chain.

Indias leadership in both natural and lab-grown diamond processing, coupled with favourable policies and rising global demand, positions it as a global hub for gems and jewellery. To capitalise on this momentum, it is recommended that industry players:

• Enhance transparency and trust through certification and hallmarking

• Invest in retail digitisation and supply chain modernisation

• Promote jewellery as both a fashion accessory and a long-term asset

• Explore international trade opportunities to tap into new markets

Outlook

Indias domestic gold jewellery consumption is projected to grow by 12-14% in value terms in FY26, as per a recent ICRA report. This growth comes despite a dip in volumes, driven primarily by the continued appreciation in gold prices, which surged by 33% in FY25 and are expected to rise further. Key drivers include:

• Retail expansion by organised players

• Market share gains from the unorganised sector

• A higher number of auspicious days supporting demand during festive and wedding seasons

ICRA notes that while elevated prices may temper volume growth, value growth remains robust, signalling a resilient consumer appetite for gold jewellery amid rising affluence and cultural preferences. With a strong foundation and clear growth levers, Indias gems and jewellery sector is on a path toward sustained global leadership. Strategic innovation, digital integration, and responsible practices will be pivotal in unlocking the next phase of industry growth.

3. Company Overview

Manoj Vaibhav Gems N Jewellers Limited (MVGJL), headquartered in Visakhapatnam, Andhra Pradesh, is a leading jewellery brand with a strong footprint across Andhra Pradesh and Telangana. Operating under our brand name Vaibhav Jewellers, the company offers an extensive range of gold, diamond, platinum, and silver jewellery through its physical showrooms as well as digital platforms, including its official website, Amazon, and Flipkart.

Guided by its core philosophy, "VAIBHAV is Relationships, By Design," MVGJL is recognized for its unwavering commitment to customer service, ethical business practices, and employee empowerment. With 21 operational showrooms (including 1 franchise showrooms), the company stands at the forefront of the jewellery branding and retail revolution, witnessing rapid growth both domestically and on the international stage.

SCOT Analysis

Strengths

1. Extensive Industry Experience

With over 25 years in the jewellery industry, MVGJL has grown from a single showroom in 1994 to 21 showrooms (including 1 franchise showroom) across Andhra Pradesh and Telangana. The companys legacy spans four generations, bringing deep industry insight and operational excellence, with further expansion planned in the upcoming financial year.

2. Strong Regional Reputation

Vaibhav Jewellers has established itself as a trusted and preferred brand among customers in Andhra Pradesh and Telangana. Renowned for consistently exceeding customer expectations, the company sets high benchmarks in product variety, innovative design, service quality, and customer trust.

3. Unique Design Capabilities

The company specializes in customized and exclusive jewellery, crafted by skilled artisans and inspired by everyday elements. Its design philosophy·"Relationships, By Design"·is a distinct differentiator, blending creativity with emotional resonance.

4. Enduring Supplier Relationships

MVGJL maintains long-standing partnerships with key suppliers and job workers, with over 70% of gold jewellery suppliers associated for more than a decade. This robust ecosystem ensures design consistency, quality, cost efficiency, and operational scalability, reinforcing supply chain strength.

5. Strong Branding Portfolio

All products are BIS Hallmarked and marketed under the well-recognized brand Vaibhav Jewellers, supported by registered trademarks like Visesha. The brand equity built over the years enhances recall, trust, and customer loyalty.

6. Advanced E-Commerce and Omni-Channel Presence

Since 2018, MVGJL has successfully extended its reach through its dedicated online platform, www.vaibhavjewellers.com. With features like Live Video Shopping, Virtual Try-On, and free pan-India shipping, the company delivers an immersive digital shopping experience. Revenue from the online segment rose from 41.66 million in FY 2018-19 to 364.79 million in FY 2024-25, contributing 1.53% to the total operational revenue.

Challenges

1. Limited Generic Promotion of Diamonds and Jewellery

Historically, large global players like De Beers significantly influenced consumer perception by positioning diamonds as enduring symbols of love and luxury. However, the recent decline in generic category-wide promotion has impacted overall consumer interest in diamond and fine jewellery. MVGJL has responded by investing in targeted advertising for premium diamond jewellery, which has begun to show promising returns, but broader category education remains a challenge.

2. Shortage of Skilled Artisans

The jewellery industry is highly dependent on skilled craftsmanship and acquiring and retaining experienced artisans remains a persistent challenge. To ensure consistent quality, MVGJL recognizes the importance of setting clear performance standards and investing in regular skill enhancement programs for its workforce.

3. Customer Retention in a Competitive Market

While promotional campaigns are effective in attracting new customers, sustaining long-term loyalty demands exceptional customer service, personalized attention, and proactive engagement. A single negative experience can erode customer trust, making customer relationship management a top operational priority.

4. Heavy Dependence on Imports for Raw Materials

India has limited domestic production of gold, resulting in a high dependence on gold imports, which are susceptible to fluctuating international prices, currency exchange rates, and regulatory changes. Additionally, the availability of recycled gold remains low, as most Indian consumers prefer to hold physical gold rather than recycle it, further tightening supply.

Opportunities

1. Transition from Unorganised to Organised Trade

Indias jewellery sector is undergoing a transformative shift from unorganised to organised retail. This transition is being accelerated by regulatory reforms such as the Ministry of Consumer Affairs mandate on compulsory hallmarking, which enforces BIS purity standards. The requirement for jewellery to bear a BIS hallmark and a unique HUID (Hallmark Unique Identification Number) ensures greater transparency, reduces malpractices, and builds consumer trust· favouring established players like MVGJL.

2. Strong Growth Potential in the Organised Segment

The organised jewellery market is set for robust growth, driven by rising consumer awareness, formalisation of the industry, increasing disposable incomes in Tier I and Tier II cities, and a growing preference for branded and certified diamond jewellery. These factors, coupled with enhanced consumer protection laws, are expected to fuel sustained demand over the next 10 to 15 years.

3. E-Commerce and Digital Expansion

The COVID-19 pandemic has accelerated the digital transformation of retail, including the jewellery sector. Indias e-commerce market is projected to grow from $46.2 billion in 2020 to $111.4 billion by 2025, and further to $350 billion by 2030, offering immense opportunity for online jewellery retail. MVGJLs early adoption of digital innovations·such as live video shopping, virtual try-ons, and secure, user-friendly platforms· positions it to capitalize on this expanding market, especially among younger, tech-savvy consumers.

Threats

1. Regulatory and Policy Risks

Frequent changes in government regulations related to taxation, import duties, and banking norms can directly impact the gold and jewellery industry. Stricter norms may constrain the import and export of gold, disrupting the supply chain and pricing structure, and leading to operational inefficiencies for companies like MVGJL.

2. Macroeconomic Uncertainty

An economic slowdown·whether domestic or global·can dampen consumer spending, especially on discretionary purchases like jewellery. This can significantly impact sales volumes, inventory turnover, and overall profitability.

3. Volatility in Gold Prices

Global economic and geopolitical factors, such as inflation, currency fluctuations, or political instability, can cause sharp increases in gold prices. Sudden price surges may deter customers from purchasing jewellery, affecting demand and thereby impacting the companys topline performance.

4. People and Culture

MVGJL is committed to fostering a safe, engaging, and rewarding work environment for all employees. The company believes that its motivated and dedicated workforce is a key driver of business success and stakeholder value. With a strong foundation built on core business and cultural values, MVGJL empowers its people through continuous development and inclusive practices.

The organisation benefits from an ideal blend of youthful energy and seasoned leadership, ensuring agility and strategic direction. The collective skills, experience, diversity, and competencies of the team support the companys ability to operate safely, efficiently, and sustainably. As of March 31, 2025, the company employed a total of 1,100+ individuals.

5. Financial Performance Review

(Rs in million)

Particulars	FY 2024-25	FY 2023-24	Growth (%)
Revenue	23,840.17	21,496.73	11
EBIDTA (excl other income)	1,645.41	1,502.23	10
Profit after tax (PAT)	1,004.21	809.26	24

Product performance

(Rs in million)

Particulars	FY 2024-25	FY 2023-24
Retail sales
(i) Gold	18,673.76	17,180.05
(ii) Gold (exchange gold)#	3,140.58	2,183.27
(iii) Silver articles	812.64	808.63
(iv) Platinum ornaments	10.99	15.74
(v) Diamonds	733.89	785.33
(vi) Stones	458.66	515.07
(vii) Others	6.43	7.52

# During the year, old gold ornaments received from the customers on exchange basis are sent for refining purpose on sales cum purchases basis.

Details of significant changes (i.e. change of 25% or more as compared to the immediately previous financial year) in key financial ratios, along with detailed explanations therefor, including other key ratios:-

(Rs in million)

Particulars	March 31, 2025	March 31, 2024	Variance	Remarks for Variance
a) Current Ratio:	1.90	1.83	3.83%	Not Applicable
Current assets	14,001.68	13,094.13
Current liabilities	7,350.71	7,172.11
b) Debt Equity:	0.51	0.65	-21.54%	Not Applicable
Total debt (long-term and short-term interest bearing)	3,679.81	4,045.08
Shareholders equity	7,187.62	6,177.82
c) Debt Service Coverage Ratio:	3.36	3.28	2.44%	Not Applicable
Earnings available for debt service	1,161.68	985.78
Debt service	345.69	300.95
d) Return on Equity:	15.03%	16.82%	-10.64%	Not Applicable
Profit for the year	1,004.21	809.26
Average shareholders equity	6,682.72	4,811.66
e) Inventory Turnover Ratio:	1.99	2.13	-6.57%	Not Applicable
Total sales	23,840.17	21,496.73
Average inventory	11,989.32	10,071.10
f) Trade Receivables Turnover:	84.84	84.25	0.70%	Not Applicable
Total sales	23,840.17	21,496.73
Average trade receivables	280.99	255.16
g) Trade Payables Turnover:	19.25	29.29	-34.28%	Decrease is on account of improved cash management and more efficient payment practices adopted.
Total purchases	23,132.35	20,160.98
Average trade payables	1,201.53	688.36
h) Net Capital Turnover:	3.79	4.39	-13.67%	Not Applicable
Total sales	23,840.17	21,496.73
Average working capital	6,286.50	4,893.23
i) Net Profit Ratio:	4.21%	3.76%	11.97%	Not Applicable
Profit for the year	1,004.21	809.26
Total sales	23,840.17	21,496.73
j) Return on Capital Employed:	16.04%	15.31%	4.77%	Not Applicable
Earning before interest and taxes	1,696.40	1,532.23
Capital employed	10,578.54	10,005.25

Details of any change in Return on Net Worth compared to immediately previous financial year

The Return on Net Worth decreased from 16.82% in FY 2023-24 to 15.03% in FY 2024-25, primarily on account of higher deployment of capital towards expansion. During the year, the Company opened six new showrooms as part of the commitments made from IPO proceeds. These showrooms are in the initial phase of operations and are yet to achieve full revenue potential.

6. Risk and Concerns

MVGJL is committed to cultivating a culture of proactive and effective risk management. The company encourages calibrated, well-monitored risk-taking to support its strategic objectives, while simultaneously identifying and mitigating internal and external factors that could affect its operations, finances, reputation, or growth. The core objective of the risk management framework is to ensure business continuity, operational resilience, and sustainable value creation even in uncertain environments.

Key Risk Areas

1. Economic Volatility

• Inflation & Recession: Economic downturns can reduce consumer spending on discretionary items like jewellery.

• Currency Fluctuations: Exchange rate volatility may impact raw material costs and international sales margins.

2. Supply Chain Disruptions

• Raw Material Shortages: Limited availability of precious metals and gemstones can escalate procurement costs.

• Logistics Constraints: Global shipping challenges may cause inventory delays and operational inefficiencies.

3. Technological Advancements

• Lab-Grown Diamonds: The rise of synthetic diamonds may reshape consumer preferences and disrupt traditional diamond markets.

• Digital Transformation: A lag in adopting digital tools and e-commerce capabilities could affect competitiveness.

4. Shifts in Consumer Behavior

• Ethical & Sustainable Demand: Growing preference for ethically sourced jewellery may necessitate new certifications and sourcing practices.

• Rapidly Evolving Trends: Consumer tastes can shift quickly, requiring agility in design and inventory management

5. Regulatory & Compliance Risks

• AML & KYC Norms: Enhanced regulations may increase compliance obligations and operational costs.

• Environmental Regulations: Tighter rules around mining and raw material sourcing may affect the supply pipeline.

6. Cybersecurity Threats

• Data Breaches: The rise of digital transactions increases exposure to cyber risks and requires robust security infrastructure.

• Fraud Prevention: Ensuring secure payment systems and customer data protection is essential.

7. Geopolitical Instability

• Trade Disruptions: Global trade tensions, tariffs, or sanctions can raise costs and limit international opportunities.

• Instability in Mining Regions: Political unrest in gold- and gemstone-producing countries can disrupt material supply.

8. Market Competition

• Global Players: Entry of international brands intensifies price competition and margin pressures.

• Counterfeit Jewellery: Imitation products may harm brand reputation and erode market share.

9. ESG Expectations

• Sustainability Pressure: Stakeholders are increasingly demanding transparent, ethical, and eco-conscious business practices.

• Investor & Customer Expectations: Growing emphasis on ESG compliance from regulators and investors.

10. Pandemic & Health Risks

• Operational Disruptions: Future health crises may impact store operations, supply chains, and consumer behavior.

11. Technological Disruptions

• 3D Printing: Innovation in manufacturing may shift industry norms, affecting traditional craftsmanship.

• Blockchain: While offering traceability and transparency, blockchain adoption requires investment and adaptation.

Risk Mitigation Strategies

To address the above risks, MVGJL has adopted a multi-pronged mitigation approach:

• Supply Chain Diversification: Reducing overreliance on specific vendors or regions.

• Technology Investments: Enhancing

cybersecurity and digital capabilities to improve customer experience.

• Ethical Sourcing: Aligning sourcing practices with global sustainability and regulatory standards.

• Continuous Market Research: Staying attuned to evolving consumer preferences and market shifts.

• Robust Compliance Framework: Proactively aligning with changing regulatory environments.

• Business Continuity Planning: Establishing disaster recovery and contingency protocols to ensure uninterrupted operations.

7. Internal Control System and their adequacy

The Company has an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and also for the sale of goods. The Company also has internal control system for speedy compilation of accounts and Management Information Reports and to comply with applicable laws and regulations.

M/s. Sagar & Associates, Chartered Accountants, Hyderabad the Statutory Auditors of the Company, has audited the Financial Statements included in this Annual Report and has issued a report on the Internal Control over financial reporting (as defined in section 143 of the Companies Act, 2013). The Company has appointed M/s. P. A. Naidu & Associates, Chartered Accountant, Visakhapatnam to oversee and carry out Internal Audits and provide periodical internal reports to the management. The Company has also appointed M/s. P.S Rao & Associates, Company Secretaries in Practice, Hyderabad as secretarial auditors of the Company for conducting secretarial audit.