Tribhovandas Bhimji Zaveri Ltd Management Discussions

Global Economic Review

The global economy exhibited impressive resilience in 2023; however, the pace of growth remains slow. According to the International Monetary Fund (IMF), the global economy achieved a modest growth rate of 3.2% in 2023. Factors such as escalating geopolitical conflicts, higher inflation, prolonged higher interest rates, a slow recovery in China, and volatility in energy prices and food markets, have led to a slowdown in global economic growth. Furthermore, the Red Sea crisis has caused the biggest diversion of global trade in decades, leading to delays and heightened expenses for shipping lines.

Positive factors such as ongoing disinflationary trends and strong economic performance in the United States and several major emerging markets and developing economies indicate signs of stable growth and a reduced likelihood of a severe economic downturn. Global inflation continues to recede at a faster pace from 8.7% in 2022 to 6.8% in 2023. While headline inflation has sustained a decline from its unprecedented peaks, core inflation has proven to be sticky and is expected to decline gradually. The US has witnessed the strongest recovery among major economies. Its GDP increased from 1.9% in 2022 to 2.5% in 2023, supported by a stronger performance in private consumption, swift containment of a looming banking crisis, a tight labour market, and rising wages. Despite experiencing a contraction in GDP growth of 0.4% in 2023, the Euro Area managed to avert recession and has shown fortitude in navigating through unprecedented shocks from the ongoing Russia-Ukraine war, surge in energy prices and the lingering effects of tight monetary policy.

Outlook

The global economy is expected to maintain its resilience in 2024, with the IMF projecting a growth rate of 3.2% for both 2024 and 2025. Advanced Economies (AEs) are projected to witness a modest uptick in growth from 1.6% in 2023 to 1.7% in 2024 and 1.8% in 2025. Emerging Markets and Developing Economies (EMDEs) are expected to experience a slight decline from 4.3% in 2023 to 4.2% in 2024 and 2025. Global headline inflation is expected to decrease to 5.9% in 2024 and 4.5% in 2025. With the improvement in the economic landscape, the World Trade Organisation predicts a moderate recovery in global merchandise trade volume, with growth rates expected to reach 2.6% in 2024 and further increase to 3.3% in 2025.

(Source: IMF - World Economic Outlook April 2024, World Trade Organisation)

Indian Economic Review

The Indian economy maintained a steady growth trajectory, solidifying its position as the fifth-largest economy in the world. According to the provisional estimates of gross domestic product (GDP) growth released by the National Statistical Office (NSO), Indias GDP growth rate has exceeded the second advance estimate and is estimated to reach 8.2% in FY 2023-24 compared to 7.0% in FY 2022-23. The overall economic growth was supported by strong domestic demand, increased investment, moderate inflation and a stable interest rate environment.

The growth observed in the Index of Industrial Production (IIP), Goods & Services Tax (GST) collections, manufacturing Purchasing Managers Index (PMI), per capita income, and increasing private capital expenditure collectively signifies strong economic momentum. Indias per capita GDP in current prices is estimated at Rs. 2.11 lakhs in FY 2023-24, achieving healthy growth of 8.6%. Rising levels of disposable income have led to an upswing in household consumption. Furthermore, headline inflation softened to 5.4% during FY 2023-24 from 6.7% in the previous year. However, volatile food prices hinder the trajectory of disinflation. The RBI opted to maintain the policy repo rate at 6.50% and remain vigilant to take effective measures to achieve the target of 4% inflation.

Indias economic outlook remains promising, with the IMF projecting a GDP growth rate of 6.8% in FY 2024-25 and 6.5% in FY 2025-26. The economy is poised to benefit from the demographic dividend, increased capital expenditure, proactive government policies, robust consumer demand, and improving rural consumption prospects. As headline inflation eases towards the target, it is expected to stimulate consumption demand, especially in rural areas.

The governments continued emphasis on capital expenditure, and fiscal consolidation efforts, coupled with growing consumer and business optimism augur well for investment and consumption demand. Key government initiatives such as Make in India 2.0, Ease of Doing Business and PLI scheme are poised to bolster the infrastructural and manufacturing base, enhance economies of scale, boost exports and position India as a global manufacturing hub.

(Source: Ministry of Statistics & Programme Implementation, Reserve Bank of India, IMF - World Economic Outlook April 2024)

Industry Review

Indian Gems & Jewellery Industry

Indias gems and jewellery industry contributes ~7% to Indias Gross Domestic Product (GDP) and provides employment to ~5 million people. The industry contributes ~10-12% of Indias total merchandise exports. Recognising its potential for growth and value addition, the government has declared the gems and jewellery sector as a focus area for export promotion.

Economic downturns, inflationary pressures in major economies, diminished demand and decreased consumer spending on luxury items, like jewellery adversely impacted Indias exports of diamonds and jewellery to the key export countries in FY 2023-24. Despite challenges such as geopolitical tensions, inflation, record-high gold prices, fluctuating diamond rates, and a decline in exports in FY 2023-24, the gems and jewellery industry remains resilient.

Indias large population, particularly its sizeable middle-class segment, plays a crucial role in driving considerable demand for gems and gold jewellery. With increasing disposable incomes and advancements in technology, there has been a notable surge in the demand for both traditional and contemporary jewellery. The growing preference for online sales channels reflects evolving consumer preferences and improved accessibility. Furthermore, there is a significant momentum towards branded jewellery among consumers. This shift in consumer behaviour and demand patterns is steering the industry towards a more organised and branded landscape. Moreover, the governments support and the establishment of jewellery parks are expected to further facilitate investments, manufacturing capabilities, employment opportunities, and enhance trade and exports within the gems and jewellery sector. The development of Indias first and largest Jewellery Park in Navi Mumbai is set to elevate the gem and jewellery industry to unprecedented levels. The sunrise sector of lab-grown diamonds has been allocated special incentives for establishing units in the park, reinforcing Indias dominance globally.

(Source: IBEF, GJEPC)

Gems & Jewellery Exports

India is a leading exporter of gems and jewellery, ranking 6^th in the world. Its share in the worlds exports of gems and jewellery is 4.3%. In FY 2023-24, Indias export sector faced significant challenges due to economic slowdown in key export markets, high interest rates, inflation, reduced demand in the USA and slower growth in China. Moreover, escalating geopolitical tensions, including the Russia- Ukraine conflict, and uncertainties surrounding the import of rough diamonds from Russia, added to the complexities

faced by the industry. Export challenges have intensified as many dealers and jewellers in G7 nations refuse to purchase polished diamonds without origin confirmation. In FY 202324, the overall exports of gems and jewellery declined by 14.45% to USD 32.28 billion from USD 37.73 billion in the previous period. Exports of cut and polished diamonds dropped by 27.58% to USD 15.96 billion compared to USD 22.04 billion the previous year. Meanwhile, gross exports of polished laboratory-grown diamonds (LGD) decreased by 16.54% to USD 1.40 billion from USD 1.68 billion last year. Despite sluggish demand for cut and polished diamonds from major markets like the USA, Hong Kong, and UAE, these countries still contributed significantly with exports of USD 5.59 billion, USD 4.3 billion, and USD 1.71 billion, respectively. On a positive note, gross exports of coloured gemstones saw a 14% increase to USD 478.71 million in FY 2023-24 compared to USD 420.13 million the previous year.

Total gross exports of gold jewellery (both plain and studded) increased by 16.75% to USD 11.23 billion in FY 2023-24, up from USD 9.61 billion the previous year. The UAE emerged as a key market for plain gold jewellery exports from India, with remarkable growth of 107.2% to reach USD 4.52 billion in FY 2023-24, compared to USD 2.18 billion in the previous year. The UAE and Bahrain together accounted for over 85% of Indias exports of plain gold jewellery. Australia also witnessed a 37% increase in exports of plain gold jewellery, benefiting from the India-Australia ECTA. The rise in exports can be attributed to pragmatic foreign trade agreements implemented by the government, including the India-UAE CEPA. However, the industry remains cautious due to the ongoing conflict in the Middle East, which may impact overall exports in FY 2024-25. Furthermore, the Trade and Economic Partnership Agreement (TEPA) between India and the European Free Trade Association (EFTA) presents immense opportunities for the Indian gem and jewellery sector to boost exports.

(Source: GJEPC, Economic Times)

Imports

Gross imports of gems and jewellery registered a decrease of 13.81% YoY to USD 22.31 billion in FY 2023-24 compared to USD 25.90 billion in FY 2022-23. Indias gold imports surged by 20% to 780.7 tonnes in 2023, primarily driven by substantial inventory buildup by the trade.

Indias imports of rough diamonds stood at USD 14.26 billion in FY 2023-24 as against USD 17.3 billion recorded in the previous year. Imports of cut and polished diamonds decreased to USD 1.91 billion in FY 2023-24 compared to USD 1.30 billion in FY 2022-23. Moreover, imports of gold bars reached USD 2.90 billion FY 2023-24 compared to USD 2.22 billion in the previous fiscal year. Furthermore, in response to reduced export demand, the Indian gems and jewellery industry voluntarily suspended rough diamond imports for two months from Oct. 15, 2023. This suspension helped to address demand-supply disparities, leading to a positive impact on polished diamond prices in the fourth quarter of FY 2023-24.

(Source: GJEPC, Business Standard)

Gold Jewellery

India ranks as the worlds second-largest consumer of gold jewellery, owing to the unparalleled cultural and religious significance of gold in the country. Gold holds deep roots in Indian traditions, making gold jewellery an indispensable part of ceremonies and festivities. Indian households possess substantial quantities of gold in various forms such as jewellery, coins, and bars. The gold market has rapidly evolved in recent years, largely due to shifting demographics. Weddings and festivals continue to play pivotal roles in driving demand for Indian gold jewellery, with bridal jewellery alone capturing a significant market share and contributing 55% to the total jewellery demand. Furthermore, amidst current macroeconomic volatility and geopolitical tensions, gold is widely acknowledged as a secure and effective hedge against inflation and global economic downturns.

According to the World Gold Council (WGC), Indias overall gold jewellery demand declined 6% to 562.3 tonnes in 2023 compared to 600.6 tonnes in 2022, due to elevated gold prices, which dampened consumer enthusiasm. The price of gold was volatile throughout 2023. The average global gold price reached a record high of USD 1,940.54 per ounce in 2023, marking an 8% increase from the previous year. India experienced a sharp rise of 15.8% in its average gold price for 2023, reaching a new record of Rs. 59,130 per 10 grams. Domestic gold prices surged to all-time highs, reaching Rs. 66,529 per 10 grams in March 2024. The robust pricing trends in 2023 led to a preference for lighter-weight or lower- carat jewellery items and a decrease in the overall volume of gold jewellery purchased. Additionally, the higher profit margins associated with gem-set and 18k jewellery further fuelled this transition.

Meanwhile, total gold investment demand in India increased by 7% to 185.2 tonnes in 2023, up from 173.6 tonnes in the previous year. Investment in bars and coins rebounded, rising by 7% YoY to 185 tonnes. During October-December 2023, demand surged to 67 tonnes, surpassing the five- year quarterly average by 64%. The price correction in gold prompted strong investment activity, bolstered by heightened interest from investors in physically backed gold ETFs, resulting in a record total holding of 42 tonnes in Indian-listed products by the end of the year.

Organised Jewellery Industry - India

Indias gems and jewellery industry, traditionally fragmented and largely composed of small and mediumsized enterprises, has seen significant transformation in the past decade. This shift has been driven by the increased penetration of organised players, changing consumer preferences, and supportive government regulations that aid the industry in transitioning to a more organised and regulated structure. Established brands play a pivotal role in driving the organised sector. These organised players are capitalising on their brand reputation, product quality, and substantial investments in branding and marketing to expand their market share and outpace the highly fragmented unorganised jewellers and retailers.

The rising consumer preference for branded jewellery is compelling both international and Indian brands to introduce a diverse range of innovative designs and products, thereby significantly expanding the market for branded jewellery in India. There is a discernible trend towards formalisation in the jewellery sector, with the organised market representing 36-38% of the total jewellery market compared to ~22% in FY 2018-19. This trend is underscored by the proliferation of stores and the increasing consumer preference for purchasing jewellery from branded retailers, especially in recent years, resulting in substantial shifts in market dynamics.

(Source: Motilal Oswal)

Growth Drivers and Opportunities • Rising disposable income and favourable demographics: The burgeoning young middle-class population, the rise of dual-income households and increasing disposable income have spurred higher expenditures on luxury items such as high-quality, branded jewellery. Additionally, gold, a symbol of wealth and prosperity deeply ingrained in Indian

culture and ceremonies, ensures sustained demand. The millennials, Gen Z, and tech-savvy consumers who are brand conscious are further boosting the demand for premium, branded jewellery. Moreover, emerging market consumers seek established brands that evoke trust and offer an enhanced lifestyle, thereby driving growth in the branded jewellery segment.

• Explosive growth of e-commerce and digital platforms: The widespread adoption of smartphones and digital technology has fuelled a surge in online shopping, expanding the market and increasing accessibility to a wider range of jewellery designs and products. Furthermore, social media influence is empowering consumers with extensive exposure to fashion trends, jewellery styles, and brands. This evolving consumer behaviour presents significant opportunities for the gems and jewellery industry.

• Growing popularity of lightweight fashion jewellery: The rising trend of lightweight fashion jewellery, particularly among younger consumers, has led to significant growth in this segment. It presents a burgeoning opportunity for the Indian gems and jewellery industry as more younger consumers seek affordable, stylish, and versatile jewellery options for various occasions.

• India as a preferred destination: Global economic dynamics have shifted in recent years amid geopolitical and trade tensions among major countries. India, one of the worlds fastest-growing economies, is increasingly seen as a preferred destination for the gems and jewellery industry. It stands to benefit from the China Plus One strategy, as international corporations actively striving to diversify their sourcing away from China. This shift presents substantial opportunities for the Indian gems and jewellery industry. Moreover, Indias reputation for exquisite craftsmanship and diverse designs makes it a favoured choice among international consumers.

Threats and Concerns

• Inflation and gold price volatility: The recent sharp increase in gold prices has influenced gold consumption demand, primarily in jewellery, constituting approximately three-quarters of total consumption in India. Consumer interest in gold, gems, and jewellery might weaken amid high inflation and economic slowdowns in major markets. Sluggish demand in the international and domestic markets may lead to a decline in exports.

• Geopolitical tensions and G7 sanctions on Russian diamonds: The escalating geopolitical tensions, including the ongoing Russia-Ukraine war and conflicts in the Middle East, pose risks to the Indian gems and jewellery industry. The imposition of direct import restrictions on Russian-origin diamonds starting 1^st January, 2024, and on diamonds processed by third countries from 1^st March, 2024, has raised significant concerns for the industry. Indias reliance on Russian rough diamonds and the non-acceptance of Russian diamonds in G7 nations could potentially disrupt the supply of rough diamonds, impacting the manufacturing of polished diamonds in India and subsequently affecting its export market.

• Reliance on imports: Raw materials are critical to the gems and jewellery industry, with India importing approximately 90% of its raw materials, including raw diamonds and gold bars. This dependency makes the industry susceptible to any adverse regulations that could restrict the supply of these essential raw materials for diamond and gold jewellery.

• Industry fragmentation: The Indian gems and jewellery industry is highly fragmented and unorganised. The industry is majorly dominated by small, family-operated jewellery shops that have been established for years. Many customers favour these local shops due to typically higher prices in the organised market, posing a challenge to the growth of the organised sector.

Industry Outlook

The outlook for the Indian gems and jewellery industry is positive, with anticipated ongoing shifts in consumer purchasing behaviour transitioning from the unorganised to the organised sector. According to industry estimates, the jewellery market will grow at a steady 15-16% CAGR, aiming for USD 145 billion by FY 2027-28. The organised market is expected to see accelerated growth, targeting a CAGR of over 20% and capturing 42-43% of the overall market share. Indias economic development and increasing income levels have influenced Indian consumers to prioritise value and brand consciousness. These economic and demographic advantages, coupled with strong government support, are poised to benefit the gems and jewellery industry. The industry is poised to receive a significant boost from the Union Budget 2024-25, with proposed reductions in customs duties. The budget aims to lower customs duties on gold and silver to 6% from 15%, and on platinum to 6.4% from 15.4%. These adjustments are intended to foster greater domestic value addition in gold and precious metal jewellery, aligning with sustained industry demand. Moving forward, the sectors growth is anticipated to be propelled

by the expansion of major retailers and brands.

Indias ongoing economic growth is expected to bolster demand for gold and jewellery; however, the soaring prices are anticipated to dampen consumer sentiment and potentially suppress gold demand. The demand for Indian gold jewellery is expected to remain subdued in the near term due to elevated gold prices. Additionally, the demand for wedding jewellery is likely to be restrained owing to fewer auspicious wedding days expected in 2024. However, any price stability ahead of Akshaya Tritiya could provide some respite. Moving forward, the uncertain global landscape presents risks, as escalating geopolitical tensions could potentially reignite inflation and exacerbate supply- side constraints, leading to a slowdown in domestic growth and demand. While a global economic slowdown, inflation, and geopolitical conflicts may push gold prices upward, positive factors such as moderating inflation in India and anticipated interest rate cuts by central banks aiming for faster disinflation are expected to provide relief.

(Source: World Gold Council, Motilal Oswal)

Company Overview

Tribhovandas Bhimji Zaveri Ltd (hereafter referred to as TBZ - The Original or the Company) is a renowned name in Indias jewellery industry, boasting a legacy of over 160 years. Esteemed as a leader in Indias organised jewellery market, the Company specialises in crafting and retailing an exquisite range of meticulously handcrafted gold, diamond, jadau, and platinum jewellery. It remains committed to the principles of originality, innovation, design, quality, purity and craftsmanship across its business.

As a pioneer and trendsetter, TBZ - The Original leads the industry in crafting jewellery collections featuring intricate designs and exclusive styles that epitomise class and elegance. The Company manufactures a wide array of jewellery from exquisite pieces for weddings, festivals, and special occasions to contemporary, lightweight designs for daily wear. Each jewellery piece is meticulously tailored and crafted to perfection, enhancing the wearers beauty and exceeding customer expectations.

TBZ - The Original was the first in India to offer 100% BIS hallmarked 22 karat gold jewellery, certified solitaire diamonds, and a lifetime buyback scheme for gold and diamond jewellery. Additionally, it spearheaded the concept of lightweight precious jewellery in the country. The Company remains committed to its legacy and currently operates 34 retail stores across 26 cities and 12 states as on date of signing of report (33 stores as on March 31, 2024). Supported by well-trained and knowledgeable personnel, these stores ensure exceptional customer experiences, playing a crucial role in cultivating consumer loyalty and driving business growth for the Company.

The Companys cutting-edge manufacturing facility is situated in Kandivali, Mumbai. The facility integrates traditional craftsmanship with modern techniques to create unique jewellery designs that harmonise tradition with contemporary aesthetics. The Company consistently invests in research and development to innovate and update its product offerings and stay ahead of emerging trends and technologies.

Product Portfolio

The Company boasts a broad and diverse product portfolio offered at various price points, catering to the aspirations and expectations of a diverse clientele spanning different ages, categories, and backgrounds. Its jewellery collections, which include both delicate, understated pieces and bold, extravagant designs, are crafted to make a lasting impression. The Company consistently enhances its portfolio by introducing new products annually.

Through its exquisite jewellery collection and exceptional brand experience, the Company has forged a profound emotional bond with its customers. Its product portfolio is curated in-house by a team of skilled designers and artisans who create a variety of new jewellery lines each year, adapting to evolving customer preferences and market trends.

Product Category	Product Range	Product Style
Gold, Diamond, Jadau and Platinum Jewellery	Rings, Earrings, Necklaces, Mangalsutra, Pendants, Bangles, Bracelets, Coins	Plain gold, diamond-studded, precious and semiprecious stone studded, lightweight, contemporary, temple, jadau, plain and diamond-studded platinum jewellery, jewellery with coloured stones in gold and diamond, loose diamond solitaires, loose precious and semiprecious stones

• Rich Legacy: TBZ - The Original boasts a formidable legacy spanning over 160 years of unparalleled excellence and expertise in the jewellery industry. It pioneered the buyback guarantee in 1938 and introduced the concept of lightweight precious jewellery trend in India. This legacy of industry knowledge has been passed down through generations and is currently led by the fifth generation of the family. The Company continues to uphold its reputation as a trusted and esteemed brand renowned for its innovative and timeless jewellery designs and impeccable craftsmanship.

• Robust Brand Equity: With a rich heritage, TBZ - The Original remains a stalwart in the industry, consistently establishing new industry standards through impressive growth, innovative designs, unparalleled product quality and authenticity. Its competitive advantage lies in its emphasis on robust sales productivity, a multi-generational customer base and high conversion rates.

• Dominance in Specialty Wedding & Occasion Jewellery: TBZ - The Original holds a dominant position in the Indian jewellery industry, especially in specialty wedding and occasion jewellery, contributing ~65% of its sales. It has established a unique presence in this market segment through its exceptional wedding jewellery collections. The brand has been an integral part of Indian wedding traditions for many generations and consistently enriches its dynamic wedding collection with new jewellery designs each season.

• Design Exclusivity: The Company introduces 8-10 new jewellery lines annually, showcasing its commitment to innovation and customer satisfaction. Its ability to consistently unveil exquisite collections season after season is attributed to its in-house diamond jewellery manufacturing, the exceptional skill of its artisans and craftsmen, and a team of expert designers. State- of-the-art manufacturing facilities and investments in R&D and modern technology enable the creation of a wide range of jewellery tailored to meet diverse customer preferences. This commitment to quality is bolstered by customer loyalty and the brands ability to command premium pricing.

• Scalability and Reach: TBZ - The Original is expanding its legacy with a nationwide presence, operating 34 stores across 26 cities in 12 states of India as on date of signing of report (33 stores as on March 31,2024). The smaller stores are strategically located throughout cities, while the larger ones are prominently situated on standalone high streets in prime urban areas. These beautifully designed stores exude elegance, showcasing jewellery to create a distinctive appeal. The collection and pricing vary between these store types, aimed at broadening the Companys footprint and appealing to a diverse consumer demographic.

• Generational Clientele: The Company has a dedicated base of multi-generational customers. These loyal consumers, often from families who have been purchasing jewellery from TBZ Ltd. for generations, are inclined to continue this tradition. This contributes to a consistent flow of repeat business for the Company.

• Enhanced Brand Visibility: TBZ - The Originals success and brand equity are bolstered by its multigenerational client base. Positive experiences shared by older generations with younger family members result in word-of-mouth referrals, thereby boosting the Companys visibility in the market.

• Enduring Customer Relationships: The Company nurtures long-lasting customer relationships through its multigenerational clientele. It focusses on delivering a delightful shopping experience to its valued customers. With well-trained retail staff offering personalised attention, the Company assists customers in selecting jewellery that matches their preferences, thereby enhancing satisfaction and loyalty. By leveraging emotional ties to jewellery within families, the Company builds stronger bonds with its customers.

• Broad Spectrum of Revenue: The Company broadened its revenue streams by serving a wide range of customers with diverse preferences and financial capacities. This strategy aids in stabilising revenue amidst market fluctuations.

• Insightful Product Development: With a client base that spans generations and diverse demographics, the Company receives valuable feedback that illuminates shifting preferences and trends among various age groups. TBZ - The Original continually aims to improve customer feedback to enhance the customer experience and optimise product development and marketing strategies.

Operational Highlights

• Despite the challenges posed by high gold prices, the Company achieved an impressive 46% increase in new customer acquisition in Q4 FY 2023-24. Continuous focus on engaging loyal customers through targeted outreach programmes and enticing incentives played a pivotal role in maintaining loyalty and encouraging repeat visits to its stores.

• To enhance its festive offers, the Company implemented extensive digital media campaigns across platforms including Facebook, Instagram, Google Search, and YouTube. These campaigns achieved remarkable success, garnering 16.8 million video views. Organically, TBZ reached a total audience of 1.35 million, with over 4,96,000 followers on social media platforms.

• The Companys Festive Campaign captivated audiences throughout October and November 2023, while its Bridal campaign "Amaya" added glamour and allure to the wedding season in December 2023.

• Leveraging the power of social media, the Company collaborated with prominent Instagram influencers to showcase its Bridal jewellery collection, "Amaya", which garnered 16.8 million views, over 7,100 comments, 9,50,000 likes, and 2,92,000 shares. This collaboration significantly bolstered the Companys brand presence and attracted a broader audience.

• The Companys Womens Day campaign, which included videos featuring TBZ employees discussing empowerment and boldness, received 42,000 views and 1,500 engagements, thereby enhancing the brands visibility and connection with the audience.

• The Company opened its new store in Vapi, GIDC (Gujarat), reinforcing its commitment to expansion and catering to diverse customer segments.

• The Company has renewed its contract with Sara Ali Khan as its brand ambassador, whose youthful charm, elegance, and vibrant personality resonate with the brands ethos of timeless beauty and contemporary style.

Financial Overview

Particulars	FY 2023-24	FY 2022-23
Net Sales	2,29,878.86	2,39,343.25
Total Revenue from Operations	2,29,894.35	2,39,362.59
Gross Profit	29,996.83	26,652.30
EBITDA	13,816.62	11,496.65
Depreciation	2,342.88	2,421.69
Finance Costs	4,984.40	4,478.25
PBT	7,117.76	5,152.58
Tax	1,715.88	1,185.17
PAT	5,401.88	3,967.41
Gross Margin	13.05%	11.13%
EBITDA Margin	6.01%	4.80%
Basic Earnings Per Share (EPS) (?)	8.10	5.95
Dividend Per Share (?)	1.75	1.75
Net Worth	60,800.38	56,727.17
Short-term borrowings (including working capital loans)	53,243.95	48,607.98
Inventory	1,19,745.84	1,22,300.83
Debtors	1,615.85	160.05
Net Block	14,844.91	15,671.05
Cash and Bank balance	4,867.61	4,546.77

Key Financial Highlights for FY 2023-24 Gross Profit

The Companys Gross Profit stood at Rs. 29,996.83 lakhs in FY 2023-24 compared to Rs. 26,652.30 lakhs in FY 2022-23, marking a growth of 12.55%.

EBITDA

The Company witnessed an improvement in EBITDA by 20.18% to Rs. 13,816.62 lakhs in FY 2023-24 from Rs. 11,496.65 lakhs in the previous year.

Profit After Tax (PAT)

Profit After Tax (PAT) in FY 2023-24 increased by 36.17% to Rs. 5,401.88 lakhs compared to Rs. 3,967.41 lakhs in the previous year.

The Companys Net Worth stood at Rs. 60,800.38 lakhs as on 31^st March 2024 as against Rs. 56,727.17 lakhs as on 31^st March 2023.

Reserves

Total Reserves of the Company stood at Rs. 54,127.32 lakhs as on 31^st March 2024 as against Rs. 50,054.11 lakhs as on 31^st March 2023.

Borrowings

The Companys total debt stood at Rs. 53,243.95 lakhs as on 31^st March 2024 as against Rs. 48,607.98 lakhs as on 31^st March 2023.

Net Worth

Key Financial Ratios Standalone Operation as per SEBI Listing Obligations and Disclosure Requirements (Amendment) Regulations, 2018

Interest Coverage Ratio	FY 2023-24	FY 2022-23
	2.43	2.42
Current Ratio	1.65	1.55
Debt Equity Ratio	0.88	0.86
Operating Profit Margin (%)	5.26%	4.02%
Net Profit Margin (%)	2.35%	1.66%
Return on Net Worth (RoNW) (%)	9.19%	7.20%
Debtor Turnover Ratio	258.90	1,489.80

Management Outlook

TBZ - The Original is strategically positioned to capitalise on the thriving Indian gems and jewellery sector, driven by a burgeoning middle class with increasing disposable income and aspirations for luxury. Committed to innovation and customer-centricity, the Company offers convenient shop from home options and video call functionalities, aligning with evolving consumer preferences to drive future growth. The Company continues to enhance customer engagement through its digital capabilities, aiming to capture a larger and profitable market share. By strategically expanding its retail footprint across key locations in India, TBZ- The Original aims to bolster its brand value and attract new customers, fostering organic growth. With a focus on financial strength, including a solid balance sheet and reduced debt levels, the Company is well- equipped for sustained expansion in Indias dynamic market landscape. It is on track to deliver steadily improving financial

performance, with consistent revenue growth and profitability. The Company remains dedicated to delivering exceptional craftsmanship and differentiated value propositions to customers while prioritising profitability in its retail expansion strategy.

Risk Management

The Company has an efficient risk management framework for the timely identification, assessment and mitigation of key business and operational risks. The Companys key risks and their corresponding mitigation measures are depicted below:

Risk	Impact	Mitigation
Macroeconomic risk	Geopolitical tensions, global economic slowdown, supply chain disruptions, high inflation and record-high gold prices could potentially affect consumer spending, and the demand environment in both domestic and international markets and adversely influence the Companys exports, profitability and growth trajectory.	The Company is committed to expanding its geographical presence, enhancing its e-commerce capabilities, and innovating its product offerings to strengthen its market position. Additionally, it maintains a strong focus on the domestic market, thereby mitigating the impacts of international economic challenges. Furthermore, its geographic diversification minimises reliance on any single economy in the event of adverse global circumstances.
Margin risk	Fluctuations in commodity prices and exchange rates could affect the Companys profit margins and overall profitability.	The Company adopts a strategic approach to minimise the risks associated with margin pressures and operational inefficiencies. This includes implementing cost optimisation measures, expanding its network through an asset-light franchise model, procuring inventory through increased participation in gold loan schemes, and cultivating enduring supplier relationships. These initiatives empower the Company to effectively navigate volatile market conditions.
Competition risk	The gems and jewellery industry encounters fierce competition from the expanding influence of unorganised sector. The inability to deliver high-quality and aesthetically appealing products could impact the market share and expansion prospects of organised players.	With its superior brand recognition, unique product offerings, and stellar performance, the Company has solidified its position as a leading and preferred jewellery brand in India. Furthermore, continuous investments in research, product innovation, and robust branding and marketing efforts enhance its brand positioning and customer relationships.
Raw material risk	The Companys inability to timely procure raw materials at competitive prices may adversely impact its operations and profitability.	With a highly skilled and dedicated team, along with a well-defined central procurement policy, the Company maintains effective inventory management practices. It capitalises on the gold loan scheme and strong partnerships with reputable suppliers of polished diamonds to secure raw materials promptly and cost- effectively.

Human Resources

TBZ- The Original regards its human resources as its most valuable asset and acknowledges their pivotal role in the Companys growth journey. Its well-crafted HR policies cultivate a culture of competitiveness, work-life balance, and teamwork among employees, ensuring the organisation is future-ready. It strives to create a safe, transparent, and inclusive work environment to enhance employee morale and productivity. The Company advocates for equal opportunities and encourages competitiveness to unlock the full potential of its workforce.

The Company places a strong emphasis on training and skill development initiatives to enhance employee capabilities and consistently engage its workforce. It regularly conducts skill development and training programmes across all levels to augment employee competencies. The Company is focussed on nurturing high levels of employee engagement, ensuring consistent performance, and fostering an innovative mindset to mitigate attrition. It organises periodic interactive sessions between management and employees to nurture a growth-oriented culture. As on 31^st March 2024, the Companys total employee strength stood at 997 employees.

Internal Controls

The Company has established well-framed internal control systems tailored to the nature, size, and complexity of its business. These internal controls encompass various aspects of governance, compliance, audit, control, and reporting. They ensure efficient use and safeguarding of the Companys assets, detect and prevent errors and fraud, address evolving risks in the business, prepare reliable and accurate financial reports in a timely manner, maintain accurate and comprehensive accounting records, and ensure stringent compliance with laws and regulations.

The Company periodically monitors adherence to internal controls, ensuring proper documentation and regular evaluation and updation by both internal and statutory auditors. Audit firms appointed by the Company closely oversee and review the efficiency of these internal controls, promptly reporting any discrepancies to the management and Audit Committee for necessary action.

Cautionary Statement

The Management Discussion and Analysis may contain some statements describing expected future events, the Companys objectives, projections, estimates, and financial and operating results which may be forwardlooking statements within the meaning of applicable laws and regulations. Actual results may differ substantially or materially from those either expressed or implied in the forward-looking statements depending on various risks and uncertainties. Readers are advised to exercise caution and refrain from placing undue reliance on forward-looking statements. Therefore, this document is subject to the disclaimer and is qualified in its entirety by the assumptions, qualifications, and risk factors outlined in the managements discussion and analysis ofTBZ Limiteds Annual Report 202324. The Company undertakes no responsibility to publicly amend, modify or revise any forward-looking statements, whether as a result of any subsequent developments, new information, future events, or otherwise.