Orosil Smiths India Ltd Management Discussions

MANAGEMENT DISCUSSION AND ANALYSIS REPORT For the Financial Year 2025 26

GLOBAL ECONOMY

The global economy in FY 2025 26 remained at a delicate juncture, shaped by persistent trade tensions, volatile commodity markets, and geopolitical instability. According to the IMF World Economic Outlook (April & July 2026), global growth is projected at 3.0 3.1%, moderating from 3.5% in the previous year. Inflation is expected to rise to 4.7%, reflecting continued pressures from energy markets and supply chain disruptions.

Commodity prices, particularly oil, remained unstable, with an average petroleum spot price index of $78 per barrel for 2026, compared with the $82 per barrel assumed under the reference forecast in the April 2026 World Economic Outlook (WEO) and $100 per barrel assumed under the April adverse scenario.

Financial conditions tightened across advanced economies, while emerging markets faced capital outflows and currency depreciation. Risks to the outlook remain tilted to the downside, with policy uncertainty and geopolitical conflicts weighing heavily on investor sentiment.

(Source: IMF World Economic Outlook, July 2026 updates)

INDIAN ECONOMY

India continued to demonstrate resilience and emerged as the fastest-growing major economy. The IMF projects Indias GDP growth at 6.5% in FY 2025 26, supported by strong domestic demand, infrastructure investment, and digital transformation initiatives. Inflation moderated closer to the Reserve Bank of Indias medium-term target of 4.0%, while the current account deficit remained contained at 2.0% of GDP.

Unemployment held steady at 4.9%, reflecting relative labour market stability. On a purchasing-power-parity (PPP) basis, India contributed significantly to regional and global output, underscoring its role as a key driver of global growth.

(Source: IMF World Economic Outlook, April 2026)

INDUSTRY REVIEW: Indian Gems & Jewellery

The gems and jewellery industry faced a mixed year in FY 2025 26. While global demand remained subdued, certain segments showed resilience and growth.

Exports: USD 27.72 billion ( 2,44,827 crore), a 3.32% decline YoY in dollar terms but a 0.93% rise in rupee terms.

Cut & Polished Diamonds (CPD): USD 12.16 billion, down 8.52% YoY due to oversupply and weak demand in the US and Europe.

Gold Jewellery: USD 11.36 billion, stable overall; plain gold fell 7.42%, while studded gold rose 6.27%, reflecting consumer preference for contemporary designs.

Silver Jewellery: Surged 52.21% YoY to USD 1.47 billion, driven by affordability and fashion trends.

Platinum Jewellery: Grew 39.32% YoY to USD 254.6 million.

Lab-Grown Diamonds (LGDs): Fell 10.55% YoY to USD 1.13 billion, though studded LGD jewellery rose 31.3%, highlighting evolving consumer preferences.

The industrys performance underscores the importance of diversification, innovation, and adaptation to shifting consumer trends.

(Source: Gem & Jewellery Export Promotion Council Annual Performance Report 2025 26)

COMPANY STRUCTURE

Orosil Smiths India Limited continued its focus on manufacturing and sale of silver and gold jewellery under its flagship brands ‘Kuhjohl and ‘Sincere, catering to evolving consumer preferences. The company maintained compliance with BIS hallmarking standards under hallmark ORO (Reg. No. 8890028608), reinforcing consumer trust and transparency.

Diversification into textiles under the ‘mingALL trademark progressed, with the company developing an online platform to support emerging designers and entrepreneurs. This strategic move aligns with the growing importance of digital commerce and market diversification.

A. OPPORTUNITIES & THREATS

Opportunities

Rising demand for studded and designer jewellery

Silver jewellery gaining traction globally

E-commerce expansion

Diversification into textiles

Threats

Global demand weakness

Volatile gold and silver prices impacting profitability

Oversupply in CPD and LGDs

Regulatory compliance costs

B. SEGMENT WISE OR PRODUCT WISE PERFORMANCE

Orosil Smiths India Limited continues to operate in the jewellery sector, focusing on the manufacturing and sale of silver and gold jewellery. The companys flagship brands,

Kuhjohl and Sincere, specialize in semi-precious and precious stones studded in gold and silver, catering to evolving consumer preferences.

In addition to its core jewellery business, the company is actively pursuing diversification into the textile sector. While operations in this segment had not commenced earlier, the management is now strategically moving forward to establish a presence in this space.

To facilitate this expansion, the company has secured the mingALL trademark for trading apparel, footwear, and headgear. Furthermore, Orosil is developing an online web-store aimed at supporting emerging designers and entrepreneurs, providing them with a platform to showcase their talent and connect with potential customers. With the global economy recovering and digital commerce gaining traction, these initiatives position the company for sustained growth across multiple sectors.

C. RISKS & CONCERNS

The company faces risks from volatility in precious metal prices, high working capital requirements, and challenges in securing retail locations amid rising real estate costs. A slowdown in Indias economic growth could also dampen consumer spending on jewellery.

Orosil mitigates these risks through prudent financial management, supply chain optimization, and adaptive pricing strategies.

D. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The company maintained robust internal controls, with regular audits conducted by the Audit Committee and Independent Internal Auditors. As of March 31, 2026, internal controls over financial reporting were deemed adequate and effective, ensuring transparency, compliance, and operational integrity.

E. DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL

PERFORMANCE

The company sustained profitability in FY 2025 26, reflecting improved operational efficiency and strategic focus. While external challenges persisted, management remained committed to strengthening business activities and exploring new growth avenues.

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

Particulars	FY 2026 ( )	FY 2025 ( )
Paid-up Share Capital	52,200,000	52,200,000
Other Equity	20,10,02,472	(2,99,15,581)
Net Worth	25,32,02,472	2,22,84,419
Profit after Tax	22,91,96,867	61,07,275

Significant changes in Key Financial Ratios:

Particulars	FY 2025-26	FY 2024-25	% Change from previous year	Reason for change
Debtors Turnover Ratio (in times)	NA	NA	NA	Not Required
Inventory	1.12	2.79	59.73	Increase in revenue
Turnover Ratio (in times)
Interest Coverage Ratio	NS	NA	NA	Not Required
Current Ratio (in times)	3.02	1.31	(131.36)	Increase in Current Assets
Debt-Equity Ratio	NA	NA	NA	Not Required
Operating Profit Margin (%)	1015.9	3.37	30040	Exceptional other income from sale of assets boosted operating margin; better cost control reduced operating losses.
Net Profit Margin (%)	866	22	(3878.89)	Increase in Other Income (sale of Fixed assets)
Return on Capital Employed (%)	105	(10)	1125.43	Increase in Profit before tax and Finance cost

F. MATERIAL DEVELOPMENT IN HUMAN RESOURCES

During the financial year 2025 26, there were no significant developments in Human Resources and Industrial Relations within the company. Given the nature of Orosil Smiths

India Limiteds business operations, the company does not require a large workforce. As of March 31, 2026, the company has five full-time employees, other than Directors. Additionally, services of consultants on a contractual basis were engaged as needed throughout the year to support specific business functions. Despite ongoing industry challenges, the industrial relations within the company have remained harmonious, ensuring a stable and collaborative work environment.

Orosil continues to recognize that its employees are its greatest asset and remains committed to fostering a performance-driven, competency-based culture that promotes accountability and responsibility. The company constantly adapts its work culture to address dynamic workforce requirements and evolving employee needs. The Board of Directors sincerely appreciates the contributions made by all employees, acknowledging their dedication and resilience in navigating an ever-changing business landscape.

CAUTIONARY STATEMENT

Certain Statements in the Management Discussion & Analysis Report describing the Companys view about the industry, expectations, objectives, etc. may be ‘forward looking statements within the meaning of applicable laws and regulations. Actual results may differ from those expressed or implied. Factors like changes in government regulations, tax laws and other factors such as industrial relations and economic developments, etc. may further influence the Companys operations include, among others, economic conditions affecting demand/supply and price conditions in the domestic and overseas markets in which it operates, changes in the Government regulations, tax laws and other statutes, any epidemic or pandemic, natural calamities over which we do not have any direct/indirect control.