iifl-logo-icon 1

Mini Diamonds (India) Ltd Management Discussions

99
(-0.25%)
Jul 12, 2024|03:42:00 PM

Mini Diamonds (India) Ltd Share Price Management Discussions

This report covers the operations and financial performance of the Company for the year ended March 31, 2023. The Company operates in one segment which is Jewellery manufacturing. Your Board of Directors places herewith the Management Discussion and Analysis Report on the business of the Company as applicable to the extent relevant.

INDUSTRY OVERVIEW:

The gems and jewellery sector plays a significant role in the Indian economy, contributing around 7% of the country’s GDP and 10% of Indias total merchandise exports. The sector has shown remarkable resilience and perseverance in the face of global challenges. Despite higher inflation and supply chain disruptions, the industry has demonstrated a commendable performance in FY 2022-23. The sector contributes around 29% to global jewellery consumption.

India is the world’s second-largest gold consumer and the world’s largest diamond cutting and polishing centre. It is the hub of the global jewellery market because of its low costs and availability of cheap labour. The gems and jewellery sector is home to more than 3,00,000 gems and jewellery players in India. To keep up with global market trends, India has been deploying modern techniques to its traditional know-how and processes.

GOVERNMENT INITIATIVES:

The government has declared the gems and jewellery sector as a focus area for export promotion and signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates (UAE) in March 2022, which will provide the industry duty-free access to the UAE market and further boost exports of Indian gems and jewellery. Timely implementation of the India-UAE Comprehensive Economic Partnership Agreement (CEPA) by the Ministry of Commerce & Industry has resulted in a remarkable 17% growth in exports of plain gold jewellery in FY 2022-23. The government targets gems and jewellery exports of USD 100 billion by 2027.

RISKS AND CONCERNS:

The Company is exposed to price risk movements both in gold as well as its forex exposure. However, it has put rigorous systems, hedging methodology, and procedures in place to take care of these concerns. The Company has in place a comprehensive risk management framework that helps in anticipating, identifying, and evaluating business risks and challenges across the Company and finding ways to mitigate the same.

SWOT ANALYSIS:

STRENGTHS:

1. Adequate manufacturing facilities across the jewellery hub for strengthening design

2. Capable to venture into new markets and exploit various opportunities with the help of strong management team.

3. Customized service gives a unique identity to the company distinct from other players.

4. Use of synergy optimization at various functional verticals gives a huge advantage.

5. Advanced Technology strength to support business operations and expansion.

6. Company with Low Debt.

7. Strong cash generating ability from core business - Improving Cash Flow from operation for last 2 years.

8. Company able to generate Net Cash - Improving Net Cash Flow for last 2 years.

9. Book Value per share Improving for last 2 years.

10. Company with Zero Promoter Pledge.

WEAKNESSES:

1. Operating in a stiff competitive environment with uncertain profit margins.

2. Unpredicted Gold price movements and their impact on the margin of the products.

3. Low-margin products

4. Limited line of business is the bottleneck to exploiting untapped markets.

5. Frequent change in customer taste and preference for jewellery designs.

6. Mixture of the organized and unorganized sectors in Jewellery Industry affects profit margins drastically.

OPPORTUNITIES:

1. Growing preference for online platform

2. Rural development

3. Customers preference in choosing hallmarked products over products made by un-organized manufacturers.

4. Concentrating in one sector makes the company mature in the industry and gain efficiency in operations.

5. Scaling of economy resultant out of Brand/ Advertisement & Publicity / Procurement of Gold, Product Mix, designs, etc.

6. The Government of India has also launched the Sovereign Gold Bond Scheme to reduce the country’s reliance on physical gold imports to meet retail investors investment demand for gold. THREATS:

Some of the key challenges facing the jewellery industry are as follows:

1. Acute shortage of skilled labour increases the production cost significantly.

2. Macro-economic factors such as Rupee fluctuations, enactment of new laws such as GST, KYC norms and quality consciousness amongst export markets.

3. Increasing duties and cess following GST implementation.

4. Adapting to fast-changing consumer preferences and buying patterns.

5. Volatility in the market prices of gold and diamonds.

6. The jewellery industry is a working capital-intensive business and currently there are Increasing restrictions by banks over lending in this sector.

7. Recession affects the industry growth in general.

8. Unpredictable Covid situation may lead to unavailability of Artisans/ workers.

9. Increasing Trend in Non-Core Income OUTLOOK:

In the coming years, there will be a spurt in demand for Indian jewellery in the global market and the growth in the gems & Jewellery sector would be largely contributed by the development of large Manufacturers/brands due to the ongoing structural changes together with strong macrodemographic trends. Regulatory changes introduced by the Government of India over the last few years are likely to rise the preference for branded jewellery and shift the scales in favor of the organized sector at the cost of the unorganized sector. The demand for jewellery is expected to remain robust, given India’s demographics and the consumer’s affinity towards gold for both wedding-related purchases and as store of value. Overall, India is expected to play a more important role in the global gems & jewellery sector, with significant investment seen in the manufacturing units by the domestic players, foreign players, and private equity investors. The changes expected in the product-mix portfolio of the Company auger well in the long run to improve the profits. It is expected that the positive impact of polarization on the organized sector is likely to be visible operationally within a couple of years that would go a long way in improving the margin and turnover for the industry in general and the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company ensures that appropriate risk management limits, control mechanisms and mitigation strategies are in place through its efficient and effective Internal Control System and the same completely corresponds to its size, scale and complexity of operations. The Company strives to put several checks and balances in place to ensure that confidentiality is maintained. Effective procedures and mechanisms are rolled out by a full-fledge Internal Audit System to ensure that the interest of the Company is safeguarded at all times. In addition to this, the Risk Assessment policy of the organization is reviewed on a quarterly basis by the Audit Committee / Board of Directors of your Company.

MATERIAL DEVELOPMENTS IN HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT, INCLUDING NUMBER OF PEOPLE EMPLOYED:

The Company continuously strives to attract and retain the best talent from the local markets, clearly define their roles and responsibilities, create an inspiring and rewarding work environment, imparting training to them and creating development opportunities for increasing employee knowledge and efficiency to make them future ready and create career opportunities within.

The Company is committed in ensuring that the work environment at all its locations is conducive to fair, safe and harmonious relations between employees. Company strongly believes in maintaining the dignity of all its employees, irrespective of their gender or seniority. Discrimination and harassment of any type are strictly prohibited.

SEGMENT-WISE OR PRODUCT-WISE PERFORMANCE:

As compared to the previous reporting period, there is decrease in the income of the company in the current reporting period.

The Company, with superior methodologies and improved process and systems, will focus on positioning the revenues and lead towards high growth path in future.

The Company is only operating in one segment.

FINANCIAL PERFORMANCE:

During the year under review, your Company has achieved a turnover of Rs 1,69,51,59,306 against Rs. 90,68,27,759 during the previous year registering a growth of 86.93% over the previous year The Company reported a Net Profit after Tax of Rs. 56,38,857 as against Rs. 21,36,096 earned during previous year registering an increase in growth by 66.51%.

Significant changes in the key financial ratios

Financial Ratio 2022-2023 2021-2022 Changes
(in %)
Debtor Turnover 2.21 1.82 21.43
Inventory Turnover 7.10 5.46 30.04
Interest Coverage Ratio 3.27 13.71 76.15
Current Ratio 1.03 1.06 2.83
Debt Equity Ratio 33.74 25.01 34.91
Operating Profit Margin 0.32 0.24 33.33
Net profit Margin 0.33 0.24 37.50
Return on Net Worth 0.16 0.06 166.67
For and on behalf of the Board
Mini Diamonds (India) Limited
Sd/- Sd/- Sd/- Sd/-
Upendra Shah Dilip Shah Prashant Chauhan Aayushi Bathiya
Managing Director Director CFO Company Secretary
DIN: 00748451 DIN: 01114643 PAN: ARNPC9627K PAN: DICPB2619K

Knowledge Centerplus
Logo

Logo IIFL Customer Care Number
(Gold/NCD/NBFC/Insurance/NPS)
1860-267-3000 / 7039-050-000

Logo IIFL Securities Support WhatsApp Number
+91 9892691696

Download The App Now

appapp
Knowledge Centerplus

Follow us on

facebooktwitterrssyoutubeinstagramlinkedin

2024, IIFL Securities Ltd. All Rights Reserved

ATTENTION INVESTORS
  • Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
  • KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
  • No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."

www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.

RISK DISCLOSURE ON DERIVATIVES
  • 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
  • On an average, loss makers registered net trading loss close to Rs. 50,000.
  • Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
  • Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.

Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213,IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248

plus
We are ISO 27001:2013 Certified.

This Certificate Demonstrates That IIFL As An Organization Has Defined And Put In Place Best-Practice Information Security Processes.