Shoora Designs Ltd Management Discussions

INDUSTRY STRUCTURE AND DEVELOPMENTS

1. Contribution to GDP and employment

- As of January 2026, Indias gold and diamond trade contributed 7% to Indias Gross Domestic Product (GDP).

- The sector contributes nearly Rs. 2.6 lakh crore (US$ 29.42 billion) to the countrys manufacturing output and generates skilled and semi-skilled employment for over 50 lakh individuals.

2. Diamonds processing and exports

- In FY26 (April-March), the overall gross exports of gems and jewellery stood at Rs. 244827.26 crores (US$ 27.72 billion.)

- In FY26, the overall gross exports of cut and polished diamonds stood at Rs. 107,461.34 crore (US12.16billion),comparedwithRs.112,414.32crore(US12.16billion),comparedwithRs.112,414.32crore(US 13.29 billion) in the previous year.

3. Market Size

- Indias Gems & Jewellery market size as of January 2026 stood at Rs. 7,31,255 crores (US85billion)andislikelytoexpandtoRs.11,18,390crores(US85billion)andislikelytoexpandtoRs.11,18,390crores(US 130 billion) by 2030.

4. Robust growth in exports

- The Government of India is aiming at US100billioninjewelleryexportinthenextfewyears(until2027),upfromUS100billioninjewelleryexportinthenextfewyears(until2027),upfromUS 35 billion in 2020.

- Indias gem and jewellery exports have remained broadly stable during April-March at Rs. 244827.26 crores (US$ 27.72 billion).

- In FY26, the overall gross exports of gems and jewellery stood at Rs. 244,827.26 crore (US27.72billion),comparedwithRs.242,559.39crore(US27.72billion),comparedwithRs.242,559.39crore(US 28.67 billion) in the previous year.

5. Imports Trends

- In FY26 In FY26 (April-March), overall gross imports of Gems & Jewellery stood at (Rs. 2,02,120.40 crore (US$ 22.84 billion).

- Non-petroleum, non-gems & jewellery (gold, silver & precious metals) imports in March 2026 were Rs. 3,70,027.13 crore (US41.87billion)comparedtoRs.3,21,245.13crore(US41.87billion)comparedtoRs.3,21,245.13crore(US 37.99 billion) in March 2025.

ADVANTAGE INDIA

1 Growing Demand

- In April 2026, inflows into Gold ETFs increased by 34% month-on-month to Rs. 3,040 crore (US343.98million)fromRs.2,265crore(US343.98million)fromRs.2,265crore(US 256.29 million) in March, reflecting continued investor preference for gold-backed investment products. During the same period, Silver ETFs recorded net outflows of Rs. 126 crore (US$ 14.26 million), marking the third consecutive month of outflows.

- According to the World Gold Council, the AUM of Indian gold ETFs increased from US7.2billioninApril2025toUS7.2billioninApril2025toUS 18.4 billion in May 2026, while physical gold holdings rose from 65.3 tonnes to 116.7 tonnes, indicating strong growth in investor demand for gold-backed ETFs.

2 Increasing Investment

- Zeropearl VC led a US$ 0.65 million (Rs. 5.5 crore) pre-seed round in ONYA (Dec 2025 period), funding offline retail expansion and growth in Indias fast-growing lab-grown diamond jewellery segment.

- BlueStone invested US$ 2.83 million (Rs. 25 crore) in lab-grown diamond brand Ethera in Feb 2026, supporting store expansion, omnichannel growth, and scaling Indias emerging lab-grown jewellery segment.

- Global institutions including Citigroup and Soci?t? G?n?rale invested US$ 19.30 million (Rs. 170.6 crore) in PNGS Reva (Feb 2026 IPO anchor round), backing expansion of its diamond jewellery business in India.

- Cumulative FDI inflows in diamond and gold ornaments in India stood at Rs. 9,962.78 crore (US$ 1.55 billion) between April 2000-March 2026.

3 Policy Support

- India allows 100% FDI under the automatic route in the gems and jewellers sector, including gold and diamond processing and trading, subject to applicable regulatory conditions.

- India has 10 special economic zones (SEZ) for gems & jewellery. These zones have more than 500 manufacturing units, which contribute 30% to the countrys total exports. The revised SEZ Act is also expected to boost gems and jewellery exports.

- In May 2026, India and the UAE reaffirmed their commitment to strengthen their economic partnership and expand bilateral trade to US$ 200 billion by 2032 under the India-UAE CEPA, with gems and jewellery remaining one of the key sectors driving bilateral trade.

- Australia will eliminate tariffs on 100% of Indian exports from January 1, 2026, significantly boosting sectors like gems and jewellery under ECTA.

- The India-UK Free Trade Agreement is expected to more than double Indias gems and jewellery exports to the UK, reaching Rs. 21,183 crores (US$ 2.5 billion) by 2027.

4 Attractive Opportunities

- Indias gold demand is projected to remain in the range of 600?700 tonnes in 2026, with rising investment demand offsetting weaker jewellery consumption due to elevated gold prices

GROWTH DRIVERS OF GEMS & JEWELLERY SECTOR IN INDIA

1 Population demographics

- By 2036, Indias middle class and affluent consumers will account for 93% of all spending, up from 80% in 2026, driving consumption, innovation, and influence.

- India holds 3.7% of global HNIs with over 85,000 individuals worth above Rs. 85 crore (US$ 10 million) in 2025.

2 Rising gold demand

- Rapidly increasing middleclass population has lead to increase in the demand of gold

- Indias gold demand is projected to remain in the range of 600?700 tonnes in 2026, with rising investment demand offsetting weaker jewellery consumption due to elevated gold prices.

3 Government Initiatives

- Gold Monetisation Scheme to reduce the countrys reliance on gold imports to meet the domestic demand

- Proposed jewellery park allocated: 25 acres land in Navi Mumbai and 25,000 sq. ft land in West Bengal

- Proposed policy to help increase the gold supply from local refineries to 80% in the next few years from current 40%

GOVERNMENT INITIATIVES AND REGULATORY FRAMEWORK

1 Gems and jewellery industry related to duties and taxes

- In September 2025, the Government kept the Goods and Services Tax (GST) rate for the jewellery sector unchanged at 3%, and industry noted that broader GST reforms and cuts in other rates would indirectly support demand for gems and jewellery.

2 FDI Policy

- The Government has permitted 100% FDI in the sector under the automatic route, wherein the foreign investor or the Indian company do not require any prior approval from the Reserve Bank or Government of India.

3 Demonetisation

- The demonetisation move is encouraging people to use plastic money and debit/ credit cards for buying jewellery. This is good for the industry in the long run and will create more transparency.

- The Government would notify a new limit for reporting about transactions in gold and other precious metals and stones to authorities to avoid the parking of black money in bullion.

4 Gold Spot Exchange

- The governments announcement on establishing gold spot exchange could help in Indias participation in determining gold price in the international market

5 BIS Hallmarking Scheme

- Gold jewellery in India carries a BIS hallmark, including the BIS logo, purity in carat, and a unique HUID number along with jeweller identification, ensuring authenticity, traceability, and quality assurance for consumers.

6 Gold Monetisation Scheme

- The Gold Monetisation Scheme was launched in November 2015. This scheme enabled individuals, trusts and mutual funds to deposit gold with banks and earn interest on the same in return.

7 Mandatory hallmarking regime

- In December 2020, All India Gem and Jewellery Domestic Council (GJC) welcomed the decision to make hallmarking compulsory from June 2021 in a phased manner; urged the government to examine the key concerns of the industry for smooth implementation of the initiative.

- Hallmarking of gold jewellery is set to begin from June 15, 2021. In view of the COVID-19 pandemic, the government accepted request of stakeholders to provide jewellers some more time to prepare for implementation and resolve issues. Earlier, the date of implementation was June 01, 2021.

8 Prevention of Money Laundering Act (PMLA)

- In December 2020, the Finance Ministry notified that the amendment under Prevention of Money Laundering Act (PMLA), notifying dealers in precious metals and stones, will maintain records of cash transactions worth Rs. 10 lakh (US$ 13.61 thousand) or more cumulatively with a single customer.

9 Special Group

- In August 2020, the government proposed the formation of a special task force comprising customs and banking officials to address operational, trade, and financing challenges faced by the gems and jewellery sector.

10 EDI (Electronic Data Interchange) Connectivity of Postal Service with Customs in ecommerce Policy

- In December 2020, the Gem and Jewellery Export Promotion Council (GJEPC) urged the government to include in the comprehensive ecommerce policy the EDI connection of postal services with customs, to enable banks to automatically close e-commerce exports against advance credit card payments by foreign purchasers.

- The step would drive for progressive reforms to help the industry fulfil its long-term goal of being the epicentre of global gems & jewellery.

11 Suspension of additional tariff on goods by the US

- In June 2021, the US suspended additional tariffs on six countries, including India, that have imposed or are considering equalisation levy/digital services tax on e-commerce companies for up to six months. This was done to provide additional time to complete the ongoing multilateral negotiations on international taxation at the Organisation for Economic Co-operation and Development (OECD) and G20

- The suspension is likely to provide relief to the COVID-hit gems & jewellery sector in India.

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 THEREFORE

Note - 25 - Accounting Ratios:

(Amount In Lakhs)

Ratio	As at 31 March ,2026	As at 31 March ,2025	% change	Reason for Variance*
	1	1	(1-2)/(2)
A Current ratio (In times)
Current Assets	2090.44	2088.35		-
Current Liabilities	104.25	108.86
Current ratio (In times)	20.05	19.18	4.53%
B Debt-Equity Ratio (in times)
Total Debts	71.35	96.35		The Debt-Equity Ratio decreased from 0.05 times to 0.04 times mainly due to a reduction in the Companys debt levels during the year.
Share Holders Equity + RS	2004.10	2000.45
Debt-Equity Ratio	0.04	0.05	-26.08%
C Debt Service Coverage Ratio(in times)
Earning available for debt service
Interest + instalment	NA	NA
Debt Service Coverage Ratio,
D Return on Equity Ratio (in % )
Net After Tax	3.64	5.85		The decline in Return on Equity Ratio is mainly attributable to lower profitability during the current financial year as compared to the previous year.
Average Share Holders Equity	2002.28	1169.4
Return on Equity Ratio,	0.18%	0.50%	-63.64%
E Inventory Turnover Ratio (In times)
Cost of Goods Sold	1129.06	422.41		The increase in the Inventory Turnover Ratio is mainly due to higher sales/consumption of inventory during the current year, resulting in improved inventory turnover.
Average Inventory	1714.26	838.19
Inventory Turnover Ratio	0.66	0.50	30.69%
F Trade Receivables turnover ratio (In times)
Net Credit Sales	1177.88	486.20		The increase in the Trade Receivables Turnover Ratio is mainly due to higher revenue and improved realization of trade receivables during the year.
Average Receivable	100.88	144.70
Trade Receivables turnover ratio,	11.68	3.36	247.51%
G Trade payables turnover ratio (In times)
Credit Purchase	1498.74	1804.85		The decrease in the Trade Payables Turnover Ratio is mainly due to higher average trade payables and lower purchase volume during the current financial year as compared to the previous year.
Average Payable	14.48	6.29
Trade payables turnover ratio (In times)	103.50	286.94	-63.93%
H Net capital turnover ratio (In times)
Revenue from Operations	1177.88	486.20		The increase in the Net Capital Turnover Ratio is mainly due to higher revenue generated during the current year as compared to the previous year.
Net Working Capital	1986.19	1979.51
Net capital turnover ratio	0.59	0.25	141.45%
I Net profit ratio (in %)
Net Profit	3.64	5.85		The decrease in the Net Profit Ratio from 1.20% to 0.31% due to reduction in net profit during the year, indicating higher operating and other expenses during the current financial year.
Revenue form Operation	1177.88	486.20
Net profit ratio	0.31%	1.20%	-74.30%
J Return on Capital employed (in %)
Earning Before Interest and Taxes	4.47	3.07		The improvement in the ROCE is driven by higher profitability achieved during the period against a relatively stable capital employed base.
Capital Employed	2075.45	2096.80
Return on Capital employed	0.22%	0.15%	47.10%
K Return on investment (in % )
Income Generated from Investment Funds
Invested funds	NA	NA
Return on investment
*** Reason for variance More than 25 %**