Sky Gold Ltd Management Discussions

ANNEXURE B

INDUSTRY STRUCTURE AND DEVELOPMENT Indian Jewelry Market

India has long held a dominant position in the global jewellery industry, being one of the largest consumers, manufacturers, and exporters of gold and diamond jewellery. Jewellery in India is not just an adornment but a deep-rooted cultural symbol linked with traditions, festivals, and ceremonies especially significantportion of the weddings, which drive annual demand. The Indian jewellery market is broadly classified into:

Gold Jewellery (plain and studded)

Diamond and Precious Stone Jewellery

Silver and Platinum Jewellery

Antique, Bridal, and Designer Collections

The market is characterized by a large unorganized sector with traditional artisans and family-run businesses, a rapidly growing organized sector, led by branded chains and listed companies and a shift from traditional retail to digital and omni-channel platforms.

During the Financial Year 2024 25, the Indian jewellery industry witnessed strong growth driven by favourable macroeconomic conditions, increased festive and wedding season demand, and evolving consumer preferences. Rising income levels, urbanisation, and the growing number of dual-income households led to greater discretionary spending on jewellery, especially in urban and semi-urban markets. Despite elevated gold prices due to global uncertainties, demand remained resilient, particularly in Tier II and Tier III cities. The extension of mandatory hallmarking enhanced transparency and consumer trust, encouraging a shift towards organized players. Branded jewellery gained popularity, with Millennials and Gen Z showing a clear preference for certified, customizable designs scale benefiting companies like Sky Gold and Diamonds Limited. Additionally, the industry saw significant digital adoption, with e-commerce platforms and virtual try-on tools becoming vital for engaging modern consumers, especially in the lightweight and fashion jewellery segments.

The Indian gems and jewellery industry has continued to receive strong policy-level support from the Government of India, which has played a crucial role in enhancing the sectors growth, transparency, and global competitiveness. Although the reduction in import duty on gold (from 12.5% to 10% in earlier years) and the rationalization of the Goods and Services Tax (GST) on various jewellery components were not introduced in FY2024 25,theirongoingimpactremainedsignificantin improving price affordability for consumers and encouraging demand, particularly through organized channels. These measures have helped streamline tax structures, reduce compliance burdens, and improve margins for businesses operating within the formal economy.

In support of exports, the government continued to promote the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme, which replaced the earlier MEIS and allowed exporters to recover embedded taxes and duties previously non-recoverable under GST. This has greatly enhanced the global price competitiveness of Indian jewellery products, especially in the United States, the Middle East, and European markets. Additionally, the Gold Monetization Scheme has been promoted to mobilize idle gold holdings from households and institutions, reducing import dependency and contributing to the countrys foreign exchange stability.

Furthermore, reduced the with effect Customs Duty on Gold and Silver to 6%, which is expected to further support the gems and jewellery sector by improving cost efficiency and international competitiveness.

These policy efforts collectively foster a more structured, transparent, and export-oriented jewellery ecosystem, empowering organized players like Sky Gold and Diamonds Limited to expand their footprint, modernize operations, and compete more effectively in both domestic and global markets.

In FY 2024, Indias gems and jewellery exports stood at US$ 22.27 billion, reflecting a 14.94% decline compared to the previous financial year. This downturn was largely attributed to global prices, and softer demand in key export markets. In September 2024 alone, exports were recorded at US$ 2.54 billion, indicating a cautious yet stable trend in international trade. Despite the temporary dip, long-term fundamentals for Indian jewellery exports remain strong, supported by government initiatives such as RoDTEP, the Gold Monetization Scheme, and infrastructure support through SEZs. The industry is expected to recover gradually, driven by improving global sentiments, the festive and bridal buying cycle, and increasing demand for Indian craftsmanship and design in international markets.

The Indian jewellery market is both vast and deeply nuanced, shaped by diverse regional styles, varying income segments, and centuries-old cultural traditions. This diversity results in highly localized demand patterns, where consumer preferences, product designs, and purchasing occasions differ significantly from one region to another. Consequently, the most effectiveapproach for growth is to establish a strong local presence backed by a national brand identity. By engaging meaningfully with regional markets and communities while maintaining consistent brand value, jewellery companies revenue across the country. The Indian market is broadly can effectively segmented by type gold, diamond, and others and by distribution channel, including specialist retailers and online platforms. Notably, jewellery demand is highly seasonal, driven by cultural events such as weddings, festivals (like Diwali, Akshaya Tritiya), and rural harvest cycles. These events play a vital role in driving consumption and necessitate region-specific marketing, localized product assortments, and robust working capital management to meet short-term surges.

Bridal jewellery, in particular, dominates the gold jewellery market, accounting for nearly 50 55% of total demand. In India, weddings are elaborate celebrations with significant spending, and jewellery remains one of the most important purchases during such events. Gold holds enduring symbolic and emotional value, linked to religious customs, auspiciousness, and intergenerational wealth preservation. It is also considered a safe-haven asset, especially during times of economic volatility, further reinforcing its appeal as both an adornment and investment. The market has also been witnessing increasing interest in innovative and contemporary designs, driven by evolving fashion sensibilities and the growing influence of Millennials and Gen Z consumers.

Overall, the Indian jewellery significantgrowth potential,industry supportedcontinues bytofavorable present demographic trends, increasing urbanization, rising disposable incomes, and government initiatives promoting transparency and formalization. The combination of changing consumer behaviors, superior organizational capabilities, and a supportive regulatory environment positions the sector for sustained expansion in the years to come.

GLOBAL JEWELRY MARKET

Jewelry Market Insights (2025-2032)

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, registering a compound annual growth rate (CAGR) of 5.10% during the forecast period (2025 2032). The market continues to experience strong momentum, driven by rising disposable incomes, growing fashion consciousness, and the increasing perception of jewellery as both a status symbol and a style enhancer. The Asia-Pacific region dominated the global market in 2024, commanding a market share of 39.28%, led by high demand from India, China, and other emerging economies.

There is a noticeable shift in consumer preferences toward luxurious and contemporary designs, supported by the growing influence of social media, celebrity endorsements, and global fashion trends. Jewellery is increasingly being used to express individuality and highlight personal style, particularly among high-income and millennial consumers. Furthermore, the entry of innovative designers and international brands into new markets is contributing to the expansion of product offerings, further accelerating consumption. As a result, the global jewellery industry remains on astronggrowthtrajectory,offering for players like Sky Gold and Diamonds Limited to tap into significant international markets through design-led collections and brand-driven strategies.

JEWELRY MARKET TRENDS

Focus on Incorporating Technical Features to Surge Product Demand

An emerging trend in the global and domestic jewellery industry is the integration of technology into ornament design and functionality. Post-COVID-19, there has been a marked shift toward innovation in design and manufacturing processes, with a growing number of manufacturers embracing smart and tech-enabled jewellery. Products such as the Ringly Luxe Smart Ring, which combines a 14k gold-plated base with a large gemstone and includes features like activity tracking, step counting, calorie burn, and distance measurement, exemplify this evolution. Moreover, the incorporation of GPS technology for safety and anti-theft measures is gaining traction, especially in high-value jewellery items. This convergence of fashion and functionality is resonating with modern consumers, particularly tech-savvy millennials and Gen Z buyers, who seek personalization, innovation, and value-added features in their jewellery. As technology continues to redefine consumer lifestyles, the jewellery segment is expected to see increased demand for such smart adornments, opening up new opportunities for brands to differentiate themselves and expand their appeal.

JEWELRY MARKET GROWTH FACTORS

The global jewelry market is witnessing robust expansion, primarily driven by rising disposable incomes and the growing spending capacity of consumers across developed and emerging economies. As lifestyles evolve, luxury items like ornaments are increasingly seen as both aesthetic investments and expressions of personal identity. Cultural practices across various regions, such as the Chinese tradition of gifting gold to younger family members during significant milestones as noted by the World Gold Council continue to sustain demand for jewelry. Additionally, the surge in the working women population and their growing financial independence are significantly boosting demand for modern, premium, and everyday wear jewelry. According to the International Labour Organization, female labor force participation reached 46.3% in 2021, up from 45.4% in 2020, highlighting the increasing economic contribution of women globally. This shift, combined with rising awareness of high-quality, designer, and certified ornaments, is poised to drive sustained growth in the jewelry sector in the years to come.

Increasing Adoption of Digital Media Platforms and Expansion of Retail Network

The rising influence of digital media through movies, reality shows, influencers, and music videos has significantly reshaped consumer preferences by amplifying fashion consciousness and accelerating the adoption of modern jewelry trends. Social media platforms, in particular, are driving aspirational demand for premium, customizable, and designer ornaments. Consumers today are more informed, style-conscious, and digitally engaged, leading to increased demand for fashion-forward jewelry collections. Complementing this digital shift, organized players are also expanding their physical footprint to enhance accessibility and deepen market penetration. For instance, in February 2024, Aditya Birla Group entered the jewelry sector by launching its new brand, ‘Novel Jewels Ltd. This trend of launching new retail formats and expanding store networks across Tier I, II, and III cities further supports the sectors long-term growth by creating omni-channel presence, enhancing customer touchpoints, and strengthening brand visibility.

RESTRAINING FACTORS

Strict Regulations on Import & Export and Implementation of Value-added Tax Are Restraining Market Growth

Despite the promising growth trajectory of the global jewellery market, several factors continue to pose challenges. One of the key restraints is the tightening of regulations governing the import and export of ornaments, leading to increased tariffs and customs duties. These regulatory barriers often result in elevated final product costs, thereby affecting price-sensitive consumers and slowing international trade momentum. Additionally, the implementation and upward revision of Value-Added Tax (VAT) in many countries particularly the tripling of VAT from July 1, 2020 has dented consumer purchasing power. To mitigate the impact on demand, many retailers have absorbed the increased tax burden, which in turn has squeezed their profit margins. The pressure is particularly intense in the wholesale segment, which operates on thin margins and relies on high-volume, weight-based transactions. Rising gold prices, coupled with higher taxation, have therefore created near-term profitability pressures for industry players, including Sky Gold and Diamonds Limited.

JEWELRY MARKET SEGMENTATION ANALYSIS By Product Analysis

Growing Consumer Preference for Personalization in Rings to Lead to Market Growth

Based on product, the market is fragmented into necklace, earrings, ring, bracelet, and others.

The jewellery market is segmented into various product categories including necklaces, earrings, rings, bracelets, and others. Among these, the ring segment continues to dominate, driven by its strong cultural significance and increasing consumer inclination toward personalization. Rings are widely perceived as symbols of commitment, particularly for engagements and marriages, contributing to their steady demand. In recent years, the trend toward customized jewellery has significantly boosted this segment, with consumers seeking tailored options in terms of metal types, designs, stone shapes, and settings. Renowned brands like Tiffany & Co. have capitalized on this extensive customization options through their online platforms, along with educational resources on diamond cuts, carats, and metal choices. This emphasis on personalization, coupled with emotional attachment and symbolic value, positions rings as a key growth driver within the jewellery product landscape.

Earrings, necklaces, bracelets, and others have shown a significant presence owing to the rising usage of these products for beautification and enhancement of looks, especially among the female population.

By Material Type Analysis

Diamond Segment to Hold Highest Market Share Owing to Rising Celebrities & Influencers Preference for

Diamond Jewels

The global jewelry market is segmented by material into gold, platinum, diamond, and others, with the diamond segment expected to hold the largest market share. Diamonds remain the preferred choice among high-net-worth individuals and celebrities due to their brilliance, prestige, and association with luxury and elegance. High-profile events such as the Met Gala have further reinforced this trend, with global celebrities like Jennifer Lopez, Lady Gaga, and Kylie Jenner prominently showcasing elaborate diamond influencersand celebrities platinumpieces.Thisendorsementby has propelled aspirational demand, particularly among younger demographics. Meanwhile, the gold segment continues to demonstrate robust growth, especially in markets like India, driven by its dual role as both ornament and investment. Increasing awareness of golds intrinsic value, cultural importance, and perceived health benefits has sustained its relevance in both urban and rural markets. Gold remains a preferred hedge during economic uncertainties,makingitan role in increasing consumer essential component of household savings.

By End-user Analysis

Womens Segment Holds the Largest Market Share as they are More Passionate about Jewels

The market is also segmented by end-user into men and women, with the womens segment continuing to dominate due to their historical and emotional association with jewelry. Jewelry is often seen by women as a symbol of beauty, self-expression, social standing, and tradition, making them the primary target demographic for most manufacturers and retailers. Companies are consistently innovating and expanding their women-centric collections with diversified styles, customizations, and cultural motifs to appeal to both traditional and modern consumers. On the other hand, the mens segment is gaining momentum, driven by rising fashion consciousness, increased disposable income, and the adoption of jewelry as a lifestyle and status symbol. Items like mens rings, bracelets, chains, and cufflinks are becoming increasingly popular, especially among younger and urban male consumers, contributing to the segments promising growth trajectory.

REGIONAL INSIGHTS

Asia Pacific: Leading the Global Market

The Asia Pacific region, valued at USD 91.49 billion in 2024, continues to dominate the global jewelry market, accounting for the highest share. This leadership is driven by the presence of major jewelry-consuming economies such as India, China, and Southeast Asia, where cultural affinity towards jewelry is deeply rooted. Regional players such as Tanishq, Malabar Gold and Diamonds, Qeelin, and Wallace Chan are playing a pivotal role in expanding consumption through innovative designs, strong retail footprints, and digital engagement.

India stands out as a major contributor, both as a leading exporter of gems and jewelry and as a massive domestic market. The export basket includes cut and polished diamonds, gold and silver jewelry, medals and coins, gemstones, pearls, and rough diamonds. At the same time, India imports high-end machine-made jewelry primarily from the Middle East and Southeast Asia, highlighting a growing demand for precision-manufactured luxury items.

Europe: Robust Growth Driven by High Incomes and Female Workforce

Europe is projected to demonstrate steady growth, supported by the regions high per capita income and a culturally ingrained appreciation for luxury goods. According to Trading Economics data (2019), countries such as Luxembourg (USD 114,482), Ireland (USD 86,781), Germany (USD 53,815), France (USD 46,184), and Italy (USD 42,413) have the economic capacity to support a thriving luxury jewelry market. Moreover, a high female employment rate, such as 72.4% in the U.K., enhances discretionary spending, particularly on fashion and lifestyle products like jewelry.

North America: High Net-Worth Population Fuelling Demand

North America is forecasted to witness substantial growth in the coming years, largely due to its large population of high-net-worth individuals. As per the Global Wealth Report (2019), the United States alone accounts for 18.6 million millionaires, representing 40% of the global total. These consumers significantly contribute to the purchase of premium and bespoke jewelry items. Additionally, frequent trade shows and luxury expos such as Luxe Pack, Love Expo, and Luxury Bridal Expo continue to enhance consumer engagement and fuel demand across the region.

South America: Rising Tourism Driving Jewelry Sales

South America, particularly countries like Brazil, is showing promising growth. The booming tourism sector is playing a luxury goods, including ornaments and gemstones. According to significant BRIC GROUP, Brazil witnessed a 60% increase in international tourists in early 2022, with approximately 962,000 visitors recorded between January and April. Tourists often seek locally crafted or regionally inspired jewelry, which has helped fuel growth in retail and artisanal segments.

Middle East & Africa: Emerging Luxury Hub

The Middle East & Africa region continues to emerge as an important market for luxury jewelry, with developed nations such as the UAE, Qatar, Kuwait, and Israel displaying strong adoption of global and regional jewelry brands. Rising disposable incomes, luxury spending, and a cultural preference for gold and diamond jewelry remain key drivers. For example, in March 2021, Saudi-based brand Lazurde launched a premium collection encrusted with diamonds, pearls, and other precious stones, catering to the growing demand from affluent women consumers.

KEY INDUSTRY PLAYERS

Focus on Innovation and Contemporary Design to Attract New-Age Consumers

Leading players in the global jewelry market are increasingly focusing on design innovation and product differentiation to cater to evolving consumer preferences. As consumer tastes shift toward more personalized, expressive, and modern aesthetics, brands are integrating new materials, creative concepts, and advanced manufacturing techniques to create distinctive offerings.

The emphasis on fresh and trend-driven jewelry is not only revitalizing traditional collections but also expanding market reach by appealing to younger demographics and style-conscious consumers. This includes a growing demand for imitation and artificial jewelry, which offers affordability . without compromisingon visual appealor style Furthermore, innovation in design enables brands to align with global fashion trends, offering seasonal collections and statement pieces that resonate with consumers seeking individuality through their accessories. By incorporating themes such as minimalism, sustainability, and fusion wear, industry players are tapping into diverse and dynamic customer segments.

For instance, as per the United Nations Comtrade Database, the United States imported imitation jewelry worth USD 47.54 million from India in 2022, reflecting a substantial global appetite for versatile and fashionable non-precious jewelry. This also underscores Indias positioning as a key exporter in the global imitation jewelry segment.

Overall, market leaders are investing in design research, digital customization platforms, and omnichannel retailing to strengthen their competitive edge and expand their consumer base in both domestic and international markets. Bottom of Form

Leading Players in the Global Jewelry Industry

The global jewelry market is characterized by the presence of several well-established and reputed players who have significantly influencedtrends, consumer behavior, and product innovation. Some of the prominent companies operating in the global jewelry market include Harry Winston, Inc. (U.S.), Chopard (Switzerland), Pandora Jewelry, LLC (U.S.), Chow Tai Fook Jewellery Company Limited (Hong Kong), Tiffany & Co. (U.S.), Rajesh Exports Ltd. (India), Cartier International SNC (France), Signet Jewelers Limited (Bermuda), Chanel (France), and LVMH Moet Hennessy (France). These companies dominate both the high-end and mass-market segments, offering a diverse portfolio ranging from luxury diamond collections to fashion and imitation jewelry. Their focus on heritage craftsmanship, global retail presence, digital transformation, and sustainable sourcing practices positions them as key drivers of innovation and growth within the industry.

(Source: Fortune Business Insights – Jewelry Market Report)

REPORT COVERAGE

This comprehensive offersan in-depth analysis of the global jewelry industry and focuses on market research report several critical dimensions that define market dynamics. It provides detailed insights into key players operating in the sector, major product categories such as rings, necklaces, earrings, and bracelets, as well as end-user segments including men and women. Furthermore, it highlights notable industry developments, including product launches, strategic collaborations, and expansions by prominent market participants. This analytical coverage is intended to provide stakeholders with actionable insights and strategic guidance for navigating the evolving global jewelry landscape.

REPORT SCOPE & SEGMENTATION

ATTRIBUTE	DETAILS
Study Period	2019-2032
Base Year	2024
Estimated Year	2025
Forecast Period	2025-2032
Historical Period	2019-2023
Unit	Value (USD Billion)
Growth Rate	CAGR of 5.10% from 2025 to 2032
Segmentation	By Product
	Necklace
	Earrings
	• Ring
	Bracelet
	• Others
	By Material Type
	Gold
	Platinum
	Diamond
	• Others
	By End-user
	Men
	Women
	By Geography
	North America (By Product, Material Type, End-user, and Country)
	U.S. (By Product)
	Canada (By Product)
	Mexico (By Product)
Asia Pacific (By Product, Material Type, End-user, and Country)
	China (By Product)
	India (By Product)
	Japan (By Product)
	Australia (By Product)
	Rest of Asia Pacific (By Product)
South America (By Product, Material Type, End-user, and Country)
	Brazil (By Product)
	Argentina (By Product)
	Rest of South America (By Product)
Middle East & Africa (By Product, Material Type, End-user, and Country)
	South Africa (By Product)
	UAE (By Product)
	Rest of the Middle East & Africa (By Product)

OUTLOOK

The RBI and the IMF have projected that Indias consumer price inflation will progressively align towards the inflation target in FY26. In the December 2024 RBIs Monetary Policy Committee report revised its inflation projection from 4.5 per cent to 4.8 per cent in FY25. Assuming a normal monsoon and no further external or policy shocks, the RBI expects headline inflation to be 4.2 per cent in FY26. IMF has projected an inflation rate of 4.4 per cent in FY25 and 4.1 per cent in FY26 for India.

As per World Banks Commodity Markets Outlook, October 2024, commodity prices are expected to decrease by 5.1 per cent in 2025 and 1.7 per cent in 2026. The projected declines are led by oil prices but tempered by price increases for natural gas and a stable outlook for metals and agricultural raw materials. Among precious metals, gold prices are expected to decrease while silver prices are expected to increase. Prices for metals and minerals are expected to decline, primarily due to a decrease in iron ore and zinc prices. In general, the downward trend movement in the prices of commodities imported by India is a positive for the domestic inflation outlook.

Foreign Exchange Reserves

Indias foreign exchange reserves consist of foreign currency assets (FCA), gold, Special Drawing Rights (SDRs), and the Reserve Tranche Position (RTP) in the International Monetary Fund (IMF). After breaching the USD 700 billion mark earlier in the year, Indias reserves moderated to USD 640.3 billion as of end-December 2024. Despite the moderation, the reserves remain robust covering approximately 90% of Indias total external debt of USD 711.8 billion (as of September 2024). This underscores Indias strong externalbuffer . and reduced vulnerability to global shocks In 2024, India retained its position as the 4th largest holder of foreign exchange reserves globally, following China, Japan, and Switzerland. This ranking reflects the countrys consistent and prudent external sector management. The year witnessed a notable increase of USD 27.1 billion in forex reserves, largely supported by net positive capital inflows . The foreign currency assets (FCA) segment accounted for the bulk of this rise, further fortifying Indias reserve base.

A key measure of external stability the import cover ratio stood at 10.9 months as of December 2024. This figure significantly exceeds theIMFs benchmark of 3 months for emerging economies, reinforcing Indias capacity to absorb external shocks and maintain macroeconomic stability.

The strong reserve position in FY24 was primarily driven by a Balance of Payments (BoP) surplus of USD 63.7 billion, accompanied by a valuation gain of USD 4.3 billion. In the first half of FY25, forex reserves further increased byUSD 59.4 billion, fueled by a BoP surplus of USD 23.9 billion and a valuation gain of USD 35.5 billion.

A global rise in uncertainty has led to fluctuations in the composition of foreign exchange reserves. CY24 saw gold bullion holdings nearing their highest level since World War II, which was largely driven by an accumulation of gold by emerging market central banks. As per the IMF, steady changes are underway in the global reserve system, including a gradual movement away from dollar dominance and a rising role of non-traditional currencies.

RISKS AND CONCERNS

The jewelry industry faces many challenges that threaten market growth and resilience. By understanding challenges and risks, jewelry brands and retailers can anticipate obstacles and innovate their business practices to withstand volatility and uncertainty.

Rising Labor Costs

Labor costs affect nearly every industry, including the jewelry market. Rising labor costs are stagnating the global gems and jewelry industries, and those price increases trickle down to affect the cost of the final product, creating significant challenges to business growth.

Producing fine jewelry requires skilled craftsmanship. The technical capability of jewelry artisans directly affects the quality and value of the final product. An increasing scarcity of qualified artisans drives labor costs, increasing prices for retailers and consumers.

In the competitive landscape of the jewelry industry, excellence in stone quality and jewelry design is essential. And that means jewelry brands and stores must employ artisans who can meet consumer expectations. Skilled labor comes with a high price tag, and jewelry producers and retailers must find ways to maintain talent without losing customers to cheaper imitations.

Demand for Sustainability and Traceability

Sustainability has long been a buzzword in the jewelry industry. In 2025, consumers dont merely prefer sustainable practices; they demand them. Disclosing responsible sourcing of materials, ethical labor practices, and sustainable production methods is no longer optional.

Jewelry shoppers want to know where their purchases come from and who played a role in creating the product. Heightened mindfulness of safe, ethical labor conditions guides purchases decisions in nearly every industry, especially in the fine jewelry market.

As sustainability and labor issues first arose, certifications and commitments to sustainable practices satisfied jewelry consumers. Today, shoppers demand more. Artificial Intelligence technology allows for fully traceable diamonds, from initial procurement to the final polished jewel.

High-level, AI-powered, data-driven transparency allows consumers to trace their jewelry, specifically diamond jewelry, through all production phases, providing the peace of mind shoppers want when purchasing fine jewelry.

The Threat of Cheap Competition

The jewelry industry is competitive, with new players entering the market daily. An expanding digital shelf increases access to clientele, but it has also increased the competition for jewelry brands and retailers. Cheaply produced imitation pieces flood the market, attracting shoppers unwilling to invest in artisan pieces.

Instead of investing in luxury jewelry, more consumers opt for imitation pieces. And while a cheap alternative can save shoppers money, nothing can replace a quality crafted piece.

Jewelers must overcome the threat of cheap competition by highlighting fine jewelrys quality, lasting nature, and the significance of investing in such a piece.

Disruption from Digital Technologies

The retail landscape of the jewelry industry is rapidly evolving. A traditional in-store experience has shifted to omnichannel retail, reflecting changing consumer shopping behaviors and preferences.

2024 research finds that while 62 percent of consumers have bought jewelry online in the last year, the brick-and-mortar store is still the preferred place to purchase jewelry. Shoppers want to make essential purchases in person, but the shopping experience begins long before the consumers cross the storefronts threshold.

Inflation and Economic Uncertainty

Inflation has affected U.S. markets for years now. What began as supply chain issues have grown into long-term inflation issues felt in every consumers wallet. The burden of inflation coupled with looming economic uncertainty can result in hesitancy among shoppers considering fine jewelry purchases.

Historically, economic uncertainty and inflation have not affected luxury spending from high-income earners. However, the tide of customer sentiment is turning. As inflation continues to cause price increases in the jewelry market, even high-income spenders rethink jewelry purchases.

In the present time of economic uncertainty and inflation affecting consumers financing at every options provide accessibility and increase purchase power, empowering shoppers to buy the pieces that speak to them.

Conclusion:

The long-term resilience and growth of the jewelry sector will depend on tangible improvements in its financial profile, operational conduct, and business practices. These improvements must be evident at the ground level to instill greater confidence among lenders and financial institutions, encouraging continued and expanded credit support to the sector.

A robust and forward-looking risk management approach is essential. Accurate risk assessment across key dimensions such as regulatory compliance, macroeconomic conditions, financial stability, government policies, market dynamics, operational processes, product innovation, and technological advancements will be critical to mitigating potential threats before they escalate.

The jewelry industry, while promising, is exposed to a wide array of risks that are dynamic and evolving. However, with strategic planning, technological adoption, transparent practices, and adaptability, industry stakeholders can convert these challenges into opportunities for transformation, innovation, and sustainable growth.

OPPORTUNITIES & THREATS Opportunities

1. Growing Preference for Online Platforms: The increasing penetration of internet and mobile usage is driving jewelry sales through digital platforms, expanding reach and convenience for consumers.

2. Expansion in Rural and Semi-Urban Markets: Rising disposable incomes and aspirational buying behavior in Tier II and Tier III towns present significant growth potential for organized jewelry players.

3. Preference for Hallmarked Products: Consumers are increasingly opting for certified, hallmarked jewelry, benefitting organized retailers . that comply with regulatory standards

4. Operational Specialization: Focused engagement in the jewelry segment enables companies to mature in the industry,streamlineoperations,andenhanceefficiency.

5. Economies of Scale: Leveraging brand-building, procurement efficiencies, and an optimized product mix enhances profitability and competitive advantage.

6. Category Expansion: Opportunities exist to diversify across product segments such as bridal, everyday wear, and fashion jewelry, catering to varied consumer preferences.

7. Brand Consciousness in Emerging Markets: As brand awareness deepens in smaller cities, consumers are shifting towards organized and branded jewelry over unorganized players.

8. Digital-First Innovation: There is rising demand for digital tools, e-commerce, and omnichannel strategies in both gold and diamond segments.

9. Sustainability and Ethical Sourcing: Companies that align with environmental and social governance (ESG) standards stand to gain customer loyalty and global recognition.

10. Fintech Integration: Innovative models like gold savings plans, digital gold, and diamond-backed investments create new channels for revenue and customer engagement.

Threats

A. Market-Related Threats

• Intensifying Competition: Online marketplaces (e.g., Amazon, Flipkart) offer broader selection and aggressive pricing, increasing pressure on traditional jewelry businesses.

• Changing Consumer Expectations: Shift towards ethically sourced and sustainable jewelry requires reconfiguration of traditional business models.

• Urban Market Saturation: High density of stores in urban locations makes differentiation and margin management increasingly difficult.

• Volatile Demand: Consumer sentiment is sensitive to economic cycles, leading to inconsistent sales patterns, particularly during uncertain periods.

B. Regulatory Threats

• Increased Compliance Burden: Regulations like mandatory hallmarking and GST require process overhauls and may strain small and medium enterprises.

• Anti-Money Laundering (AML) Requirements: AML compliance requires technological and operational investment, especially in high-value transactions.

• ESG Regulations: Growing expectations for transparency in sourcing and environmental responsibility may entail significant investment in sustainability programs.

C. Operational Threats

• Supply Chain Vulnerabilities: Any disruption in the availability of raw materials, especially imports, can affect the production cycle and inventory management.

• Security Concerns: Jewelry businesses face heightened risk of theft and robbery due to the high-value nature of inventory.

• Internal Fraud Risks: Employee misconduct, if unchecked, can lead to inventory shrinkage and reputational damage.

• Technology Dependence: Increased reliance on digital infrastructure heightens vulnerability to cybersecurity breaches and IT system failures.

D. Financial Threats

• Price Volatility: Fluctuations in gold and diamond prices directly affect margin stability and inventory valuation.

• High Inventory Costs: Large investments in stockholding increase working capital requirements and inventory-related risks.

• Credit Exposure: Extending credit to customers or dealers introduces theriskofbaddebts,affectingliquidity.

• Rising Operating Expenses: Escalation in wages, rents, energy, and logistics costs compress profit margins and impact scalability.

SEGMENT-WISE OR PRODUCT-WISE OPERATIONAL PERFORMANCE

Sky Gold and Diamonds Limited demonstrated resilient performance in FY 2024 25, navigating a volatile macroeconomic landscape and shifting consumer behavior with agility. The Company continued its strategic focus on expanding its retail presence, enhancing customer experience, and optimizing its product mix, which led to robust growth across key segments.

Category-wise Performance

1. Gold Jewellery:

Gold remained the core product segment contributing significantly to the Companys overall revenue. Demand was driven by cultural affinity, festive and wedding-related purchases, and rising preference for hallmarked, branded jewelry. However, price volatility and evolving government regulations such as mandatory hallmarking posed intermittent challenges. Despite these, Sky Gold and Diamonds leveraged design innovation and transparent pricing to maintain its competitive edge.

2. Diamond Jewellery:

The diamond segment witnessed steady growth, supported by increasing consumer interest in premium offerings, bridal collections, and corporate gifting. The segment also benefitted from enhanced traceability, growing awareness of ethical sourcing, and AI-enabled inventory management. Digital transformation initiatives further contributed to better customer engagement and conversion rates in this category.

3. Product Mix and Customization:

The Company continued to invest in product innovation and curated collections to appeal to a broader audience. From lightweight daily wear to intricate bridal sets, the varied range catered to different tastes, demographics, and price points. Bespoke and customized jewelry solutions also gained traction, strengthening the Companys customer retention.

4. Retail and Digital Channel Performance:

During the year, Sky Gold and Diamonds Limited expanded its retail footprint by opening additional showrooms in strategic Tier I, II, and III locations. The Companys omnichannel strategy, including enhanced e-commerce capabilities and virtual try-on technologies, significantly contributed to sales, especially among younger, digitally savvy consumers.

5. Operational Highlights:

Strengthening of supply chain efficiency led to improved inventory turnover.

Data analytics and customer relationship management tools were used to enhance personalization. Increased focus on sustainability and traceability practices, particularly in sourcing diamonds and gold.

Key Performance Drivers

Competitive pricing and superior craftsmanship. Strong branding and advertising initiatives. Expansion in semi-urban and rural markets.

Rising consumer preference for organized retail and hallmarked products.

Strategic procurement and inventory management that mitigated price volatility impacts.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

Sky Gold and Diamonds Limited has instituted a robust and comprehensive Internal Control Framework to ensure effective governance, regulatory compliance, and operational efficiency. During the financial year 2024 25, the Company continued to strengthen its Internal Financial Control (IFC) systems, as mandated under Section 134(5) of the Companies Act, 2013. The internal controls are designed to provide reasonable assurance regarding the orderly and efficient conduct of business, safeguarding of assets, prevention and detection of fraud and errors, accuracy and completeness of financial records, and the . timely preparation of reliable financial statements Based on a detailed review undertaken by the management and an evaluation of the control environment, the Board of Directors is of the opinion that the Company has in place an adequate Internal Financial Control system that was operating effectively as on March 31, 2025.

The internal audit function, which plays a key role in assessing the efficacy of controls, operates independently and reports directly to the Audit Committee of the Board. The Internal Audit team comprises qualified and experienced professionals and periodically evaluates and strengthens control mechanisms across departments. Recommendations emerging from audit reviews are promptly acted upon, ensuring continuous improvement in the system.

Key Features of the Internal Control System

1. Comprehensive Documentation of Processes

Major business processes, including those related to financial reporting, IT controls, data security, and operational workflows, are well-documented and regularly reviewed.

2. Governance through Board-Level Committees

The Audit Committee, comprising a majority of Independent Directors, oversees the internal audit function, financial reporting process, and the adequacy of internal controls.

3. Regular Audit Reviews

Periodic internal audits focus on compliance with internal controls, identification of process risks, and evaluation of operational efficiency. Significant findings are reported to the Audit Committee for corrective action

4. Information Security Framework

A well-established information security policy is in place, supported by continual upgrades to the Companys IT infrastructure to protect data integrity and operational continuity.

5. Corporate Governance Practices

Clear corporate policies guide financial and operational processes. These policies are periodically reviewed and updated to reflect changes in regulations and business dynamics.

6. Strategic and Operational Planning

The Company follows a structured approach to annual and long-term planning, supported by detailed budgeting and monthly reviews by senior management on key performance indicators and business strategies.

7. Use of ERP and Automation

The Company has implemented and continually upgraded an integrated Enterprise Resource Planning (ERP) system, which enhances accuracy, transparency, and real-time monitoring across all business functions.

8. Budgetary Controls

Annual budgets are formulated for each department, and performance is reviewed against these budgets to ensure fiscal discipline and operational efficiency.

9. Risk Management Integration

Internal controls are aligned with the Companys risk management framework, ensuring that key business risks are identified, . assessed, and mitigated proactively

10. Continuous Improvement and Training

Staff across levels receive regular training to maintain awareness of internal policies, control measures, and regulatory developments.

In summary, Sky Gold and Diamonds Limiteds internal control systems are well-defined, consistently reviewed, and effectively implemented, providing a strong foundation for sustainable growth and stakeholder confidence.

HUMAN RESOURCES & INDUSTRIAL RELATIONS

With the changing and turbulent business scenario, the Company ‘s basic focus is to upgrade the skill and knowledge level of the existing human assets to the required level by providing appropriate leadership at all levels motivating them to face the hard facts of business, inculcating the attitude for speed of action and taking responsibilities. In order to keep the employees skill, knowledge and business facilities updated, ongoing in house and external training is provided to the employees at all levels. The effort to rationalize and streamline the work force is a continuous process. The industrial relations scenario remained harmonious throughout the year.

Industrial relations:

Throughout the year, we maintained a positive and harmonious working environment across all our establishments and offices.

• To avoid all forms of industrial conflict so as to ensure industrial peace by providing better working and living standard of workers.

• To rise productivity in an era of full employment by reducing the tendency of higher labour turnover and absenteeism.

• To bring about government control over such industrial units which are running at loses for protecting employment or where production needs to be regulated in public interest.

• To ensure a healthy and balanced social order through recognition of human rights in industry and adaption of complex social relationships to the advancement of technology.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE RESULTS OF OPERATIONS:

1. Net Revenue from Operations: (In Lacs)

Particulars	FY 2024-25	FY 2023-24	Change	% of Change
Revenue from operations	3,54,801.96	1,74,548.42	1,80,253.54	103.27

2. Other Income (In Lacs)

Particulars	FY 2024-25	FY 2023-24	Change	% of Change
Other Income	3,295.71	373.95	2,921.76	781.32

3. Gross Profit (In Lacs)

Particulars	FY 2024-25	FY 2023-24	Change	% of Change
Revenue from	3,54,801.96	1,74,548.42	1,80,253.54	103.27
Operations
Less: Cost of	3,39,324.26	1,82,173.45	1,57,150.81	86.26
Consumption
Changes in	(9,611.38)	(18,090.59)	8,479.21	46.87
Inventory
Gross	25,089.08	10,465.56	14,623.52	139.72

4. Profit before Tax (In Lacs)

Particulars	FY 2024-25	FY 2023-24	Change	% of Change
Profit Before Tax	14,587.27	5,408.83	9,178.44	169.69

5. Total Comprehensive Income (After Taxation) (In Lacs)

Particulars	FY 2024-25	FY 2023-24	Change	% of Change
Total Comprehensive In- come (After Taxation)	13,293.05	3,900.37	9,392.68	240.81

KEY FINANCIAL RATIOS

Sr. No	Particulars of Ratio	31.03.2025	31.03.2024
1.	Debtors Turnover Ratio	12.80 Times	20.63 Times
2.	Inventory Turnover Ratio	10.06 Times	9.46 Times
3.	Interest Coverage Ratio	5.61 Times	4.39 Times
4.	Current Ratio	1.66 Times	1.47 Times
5.	Debt Equity Ratio	0.92 Times	1.35 Times
6.	Operating Profit Margin (%)	6.16%	4.28%
7.	Net Profit Margin (%)	3.74%	2.32%

DETAILS PERTAINING TO NET WORTH OF THE COMPANY

Particulars	31.03.2025 (Rs. In lacs)	31.03.2024 (Rs. In lacs)
Net-worth	68,379.71	24,411.71

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: Inventory Turnover Ratio: It has decreased as the Company had high inventory levels during the year as compared to previous years.

Net Profit Ratio: It has increased as compared to the previous year this is because Net profit from operational activities increased during the year.

Debtors Turnover Ratio: It has decreased primarily due to higher March Sales on account of Gudipadwa near year end.

CAUTIONARY STATEMENT

This Management Discussion and Analysis contains forward-looking statements that reflect the Companys current views and expectations with respect to future events and financial performance. These statements are based on certain assumptions and are subject to risks and uncertainties, both known and unknown, which could cause actual results, performance, or achievements to differ materially from those expressed or implied by such forward-looking statements. Such forward-looking statements involve various assumptions, risks, and uncertainties, including but not limited to changes in market conditions, government regulations, economic developments, geopolitical factors, interest rates, raw material prices, consumer preferences, and other factors beyond the control of the Company.

The Company does not undertake any obligation to publicly revise or update any forward-looking statements, whether as a result of new information, future events, or otherwise, unless required by applicable laws.

Accordingly, these statements should not be regarded as guarantees of future performance, and the actual results may materially differ from those anticipated. Readers are advised to exercise caution and not to place undue reliance on these statements, which should be considered in the context of the prevailing market and economic conditions.