Uday Jewellery Industries Ltd Management Discussions

Indian Jewellery Sector

Tradition and cultural significance

Jewellery in India is deeply embedded in the nations cultural fabric, serving not just as an adornment but as a symbol of heritage, prosperity, and social status. It is inextricably linked to lifes milestones and festivities — from bridal jewellery sets that form the centrepiece of Indian weddings to ornate pieces worn during major festivals such as Diwali, Akshaya Tritiya, and Durga Puja. Ceremonial jewellery is often chosen with specific meanings, colours, and motifs that signify blessings, protection, and prosperity. For example, the mangalsutra in Hindu weddings symbolises marital commitment, while temple jewellery worn during religious occasions is believed to invoke divine favour. Each region of India has its own distinctive jewellery traditions — from the intricate Kundan and Polki work of Rajasthan to the temple jewellery of Tamil Nadu and the delicate filigree craftsmanship of Odisha — all of which are woven into the countrys rich cultural tapestry and passed down through generations as treasured heirlooms.

Global positioning

India is one of the largest markets for gold jewellery globally and a leading centre for diamond cutting and polishing, accounting for a significant share of the worlds processed diamonds. The countrys jewellery industry is both traditional and modern, offering handcrafted artisanal pieces alongside contemporary designs. Indian jewellery enjoys high demand internationally, especially in the Middle East, North America, and Southeast Asia, where it is valued for its craftsmanship, vibrant designs, and cultural richness. Major Indian jewellery brands and export houses are increasingly expanding their footprint through global retail outlets and e-commerce platforms, further solidifying Indias position as a global jewellery hub.

Growth and industry dynamics

The Indian jewellery market has witnessed robust growth driven by rising disposable incomes, changing consumer preferences, and the increasing adoption of branded and hallmarked products. While gold remains the dominant segment, there has been notable growth in diamond jewellery, platinum jewellery, and fusion designs that blend traditional motifs with modern aesthetics. The industry benefits from a strong domestic base, but also faces challenges such as fluctuating gold prices, regulatory changes, and evolving consumer behaviour. The growth of organised retail, government initiatives to promote hallmarking, and the rising influence of digital channels are shaping the sectors evolution. Additionally, demand is increasingly being driven by younger consumers seeking designs that reflect both heritage and contemporary style, making the market dynamic and diverse.

Global jewellery sector – 2024 performance

Global gold jewellery demand in 2024 fell sharply in volume terms but surged in value due to record-high gold prices. Annual demand declined 11% year-on-year to 1,877 tonnes, the weakest since 2009 (excluding the pandemic year 2020). The downturn was broad-based, with nearly all major markets registering declines.

However, value reached US$144 billion, the highest ever, reflecting the price-driven shift in the market. In Q4, demand was 547 tonnes (-12% y/y), also the weakest fourth quarter in four years, but the value climbed to US$47 billion, another record.

Metric	2023	2024	% Change	Notes
Volume (tonnes)	2,110.6	1,877.1	-11%	Weakest since 2009 (excl. 2020)
Value (US$ bn)	132	144	+9%	Record high
Q4 Volume (t)	620.9	547.1	-12%	Lowest Q4 in four years
Q4 Value (US$ bn)	42	47	+12%	Record high

India – resilient leader

India was the standout performer in 2024, showing remarkable resilience against global headwinds. Annual jewellery demand slipped just 2% to 563.4 tonnes, compared to the global average decline of 11%. This resilience was driven by the July 2024 import duty cut, which triggered strong pre-buying in Q3, delivering the strongest third quarter since 2015.

A healthy domestic economy, combined with strong festival and wedding season demand in late October and November, also helped mitigate the impact of high prices. The annual value of Indian jewellery demand reached 3.6 trillion, with around 70% of this occurring in H2.

Metric	2023	2024	% Change	Notes
Volume (tonnes)	575.8	563.4	-2%	Minimal decline vs global average
Value ( trillion)	3.3	3.6	+9%	70% in H2
Q4 Volume (t)	199.6	189.8	-5%	Price volatility & inauspicious calendar
Largest Quarter	Q3	Q3	—	Best Q3 since 2015 due to duty cut

India overtook China as the worlds largest gold jewellery market for the second time in three years.

Rest of the world – overview

Outside India, most markets saw significant contractions in 2024, with China posting the largest decline. Chinese demand fell 24% to 479.3 tonnes, the lowest in more than a decade, due to weak consumer confidence, slower income growth, store closures, and a shift toward lighter-weight designs.

The Middle East experienced an 8% annual drop as the Indian duty cut reduced tourist purchases in the UAE, while Turkey saw near-stable annual demand but a strong Q4 driven by opportunistic investment buying during price dips.

In the US and Europe, high prices combined with cost-of-living pressures kept volumes weak, even as values reached record highs. ASEAN markets such as Vietnam and Indonesia struggled with price sensitivity, while Japan, South Korea, and Australia faced currency weakness and inflation, further reducing demand.

Market / Region	2023 (t)	2024 (t)	% Change	Key Notes
China	630.2	479.3	-24%	Weak confidence, store closures
Middle East (total)	171.5	157.0	-8%	UAE hit by reduced Indian tourist buying
- Saudi Arabia	38.1	35.0	-8%	Q4 +12% on price dip buying
- UAE	39.7	34.7	-13%	Lost tourist-driven demand
Turkey	42.2	40.9	-3%	Strong Q4 on investment-led buying
United States	136.9	132.1	-3%	Cost-of-living pressures
Europe (ex-CIS)	70.1	67.5	-4%	Weakest since 2020; Germany & UK weakest
Vietnam	15.1	13.2	-13%	High prices + tax crackdown
Indonesia	25.1	22.8	-9%	Shift to lower-carat jewellery
Japan	16.3	15.1	-7%	Inflation impact
Australia	11.7	8.9	-24%	Prolonged quarterly declines

Exports

Indias gems and jewellery sector, a significant contributor to merchandise exports, experienced a challenging FY2024-25. According to the Gem & Jewellery Export Promotion Council (GJEPC), overall exports declined by 11.72%, amounting to

USD 28.5 billion ( 2.41 lakh crore), compared to USD 32.2 billion ( 2.67 lakh crore) in FY2023-24. The contraction was primarily driven by prolonged geopolitical tensions, subdued demand in key markets, and price corrections in critical product categories.

Key Market Dynamics

Global demand remained under pressure, particularly in the United States and China, Indias principal export destinations. Both economies witnessed a slowdown in luxury spending due to geopolitical uncertainty, inflationary trends, and shifting consumer priorities. Additionally, the 10 15% correction in rough diamond prices impacted the overall value of diamond exports, further dampening sectoral performance.

Segment Performance

Cut And Polished Diamonds

Exports of CPD saw the steepest decline among major categories, falling 16.75% to USD 13,292 million ( 1.12 lakh crore) from USD 15,967.02 million ( 1.32 lakh crore) in FY2023-24. The contraction was due to reduced demand in major importing nations and price adjustments in the upstream diamond supply chain.

Lab-Grown Diamonds

Polished lab-grown diamond exports declined by 9.64% to USD 1,267.26 million ( 10,716.13 crore) from USD 1,402.44 million ( 11,612.36 crore). Despite global interest in sustainable alternatives, macroeconomic headwinds and inventory corrections affected export volumes and values.

Gold Jewellery

Gold jewellery exports remained relatively stable, showing a marginal decline of 0.11% to USD 11,215.46 million

( 94,937.78 crore) compared to USD 11,227.72 million ( 93,066.82 crore) in the previous year. This stability reflects steady demand from the Middle East and specific Western markets, offsetting weakness in other geographies.

Silver Jewellery

Silver jewellery exports experienced a sharp decline of

40.58%, falling to USD 961.79 million ( 8,115.32 crore) from USD 1,618.63 million ( 13,424.4 crore) in FY2023-24.

The decline is attributed to inventory build-ups in importing markets and weaker discretionary demand.

Platinum Jewellery

Platinum jewellery was a rare bright spot, recording an

11.79% growth to USD 182.75 million ( 1,547.3 crore) from USD 163.48 million ( 1,354.41 crore). This growth was supported by niche demand and targeted marketing efforts in select markets.

Coloured Gemstones

Exports of coloured gemstones declined by 8.01% to USD

440.38 million ( 3,729.93 crore) from USD 478.71 million ( 3,961.98 crore) in FY2023-24, reflecting lower orders from

European markets and a cautious buying approach by global wholesalers.

Monthly Trend – March 2025

Despite the annual decline, March 2025 registered a 1.02% year-on-year growth, with exports rising to USD 2,582.97 million ( 22,340.89 crore) compared to USD 2,556.97 million ( 21,228.71 crore) in March 2024. This indicates a tentative recovery, possibly driven by seasonal demand and restocking ahead of international trade events.

Challenges and Risks

• Geopolitical tensions affecting major markets, particularly the US and China.

• Price volatility in rough and polished diamonds is impacting export realisations.

• Shifting consumer preferences toward sustainable and alternative luxury products.

• Global economic slowdown weighing on discretionary spending.

Opportunities and Outlook

While the near-term outlook remains cautious due to persistent macroeconomic pressures, specific segments such as platinum jewellery and lab-grown diamonds hold growth potential. Strategic market diversification, product innovation, and value-added offerings will be essential for mitigating demand concentration risks. The gradual improvement seen in March exports may signal the beginning of stabilisation, provided global conditions improve.

Pure Play Jewellery Manufacturing

There are 22 organised pure-play jewellery manufacturing companies in the listed space, ranging from small niche operators to a few larger entities. The segment shows significant variation in the size and capabilities of its participants. While generally smaller compared to diversified jewellery and retail brands, these manufacturers form an integral part of the sectors supply chain, with a select few holding a more prominent position within the segment. Indias organised pure-play jewellery manufacturers form the backbone of the branded jewellery ecosystem, acting as dedicated value chain partners to leading retailers. They specialise in producing jewellery to brand specifications without engaging in direct retail, enabling brands to achieve scale, quality, and customisation.

Role in the value chain

These manufacturers translate brand design concepts into market-ready products, ensuring precision, consistency, and timely delivery. They manage everything from raw material sourcing to production scheduling, absorbing operational complexities so brands can focus on design, marketing, and retail expansion.

Value delivered to brands

• Product realisation: Converting artistic vision into production-ready designs with CAD/CAM support and prototyping.

• Flexibility: Handling both small customised batches and large production runs, adapting to seasonal and regional demand.

• Quality & compliance: Meeting stringent BIS and international certification requirements, integrating rigorous inspection systems.

• Operational efficiency: Managing raw material procurement, artisan networks, and production workflows.

• Cost efficiency: Eliminating the need for brands to invest heavily in manufacturing infrastructure.

Outlook

With growing formalisation, demand for traceability, shorter fashion cycles, and tech integration, these manufacturers are set to play a more strategic role in both domestic and export markets.

SWOT Analysis of the Sector

Strengths

• Specialised production expertise and ability to meet brand-specific requirements.

• Flexibility in handling diverse volumes and designs.

• Strong compliance and certification standards that build brand trust.

Weaknesses

• Limited direct consumer brand visibility.

• Dependence on retail partners for sustained demand.

• Vulnerability to fluctuations in gold and gemstone prices.

Opportunities

• Expansion with organised retail chains and export markets.

• Gemstones studded jewellery, lighweight studded jewellery and customised.

• Technology adoption (automation, AI, 3D printing) for efficiency and differentiation.

• Access to credit and gold metal loans supporting scale.

• Organised retailers are increasingly seeking long-term, compliant supply chain partners.

Threats ( Challenges )

• Competition from integrated retailers with in-house manufacturing.

• Rapid changes in fashion trends require constant adaptation.

• Strong competition from unorganised players on cost and speed.

About the Company

Uday Jewellery Industries Limited is a Hyderabad-based company engaged in the manufacturing and marketing of gold and colour gemstone diamond-studded jewellery. The company specialises in the production of lightweight, hollow, and bangle-focused designs, catering to the evolving preferences of modern consumers while maintaining the craftsmanship standards associated with traditional Indian jewellery.

Originally incorporated as Hira Laxmi Jewellery Exports Private Limited in 1999, the business transitioned to a public company in 2011, later rebranding as Uday Jewellery Industries Limited to reflect its broader growth ambitions. Over the years, it has developed a niche in 22-carat gold jewellery, particularly hollow bangles, which combine aesthetics with affordability—a positioning that has allowed the brand to cater to middle- and upper-middle-income segments.

The company operates through a B2B model, supplying its products to wholesalers and large retailers across India. Its ability to customise designs according to client requirements and deliver consistent quality has helped it maintain strong relationships with trade partners. Uday Jewellerys design and manufacturing processes blend traditional artistry with modern technologies like CAD/CAM, ensuring both intricate detailing and scalability in production.

With an increasing focus on expanding its product portfolio and enhancing its market reach, Uday Jewellery is also exploring opportunities in diamond-studded jewellery, thereby broadening its appeal and diversifying its revenue streams. The companys market positioning is further strengthened by its operational efficiencies, compliance with quality standards, and emphasis on customer-centric design innovation.

Operating Process

Step Subheading	Description
1 Order sourcing	The process commences with the sales team proactively identifying and sourcing orders for the jewellery, these orders are systematically transferred to the order management department to initiate subsequent procedural actions.
2 Order requisition	The order department raises a requisition using ERP-enabled software, promptly sharing the design, numbers, images, and specifications with the production and planning department to ensure accurate and timely manufacturing schedules.
3 Production	Based on the the order specification the production department procures the material and craft the required jewellery
4 Quality checks and tagging	Finished products are sent to the tagging department for quality checks and tagging of the gross and net weights. the finished products are handed-over to the sales team for coordinated delivery to the intended recipients
5 Invoicing	The sales department fixes the rate of gold based on the daily market price, adds making charges as per contract, and shares the details with the finance department for invoicing.

Products

Uday Jewellerys product portfolio focuses on high-quality, lightweight jewellery crafted primarily in gold and studded with cubic zirconia (CZ) and other precious and semi-precious stones. The companys designs cater to a broad spectrum of consumer preferences, ranging from contemporary, machine-made pieces to intricate, handcrafted items.

The offering spans earrings, rings, pendants, necklaces, and bangles, with special emphasis on designs that balance aesthetics and wearability while optimising gold usage. This approach allows Uday Jewellery to provide fashionable yet affordable options, making them suitable for both daily wear and occasion-specific collections. The company continually updates its product range to align with evolving fashion trends and seasonal demand, maintaining appeal across domestic and export markets.

Review of Financial Performance

The company delivered a strong performance in FY25, with revenue increasing by 65.84% over FY24, driven by robust operational execution and higher sales volumes. Despite the steep rise in the cost of revenue (+71.63%), gross profit still expanded by 17.73%, indicating partial pass-through of cost pressures. Selling and marketing expenses grew moderately (+13.17%), while general and administrative expenses rose sharply (+50.26%) due to higher employee costs, depreciation, and other operating outlays. Operating income improved by 23.50%, and profit attributable to equity holders rose by 24.70%, reflecting solid bottom-line resilience.

From a balance sheet perspective, net worth strengthened significantly by over 2,997 lakh, supported by retained earnings.

Capital employed increased in line with higher equity and modestly higher debt levels. However, the company continued to maintain a negative net cash position, with total borrowings exceeding cash and cash equivalents. Net current assets rose by approximately 2,994 lakh, reflecting improved working capital strength, while investments in property, plant, and equipment also increased, due to ongoing capacity enhancement.

Financial Position

Particulars	FY25	FY24
Share Capital	2,371.26	2,281.26
Net Worth	10,671.03	7,673.88
Gross Cash (A)	133.11	285.69
Total Debt (B)	2,462.54	2,359.33
Net Cash (A–B)	-2,329.43	-2,073.64
Property, Plant and Equipment (C)	626.68	502.05
Intangible Assets (D)	4.03	4.56
PPE and Intangible Assets (C+D)	630.71	506.61
Goodwill	0.00	0.00
Net Current Assets	10,071.75	7,077.63
Capital Employed	13,133.57	10,033.21

Financial Performance

Particulars	FY25	FY24	YoY Change (%)
Revenue	28,720.20	17,318.24	65.84
Cost of Revenue	26,528.40	15,456.53	71.63
Gross Profit	2,191.80	1,861.71	17.73
Selling and Marketing Expenses	169.58	149.84	13.17
General and Administrative Expenses	921.09	612.98	50.26
Operating Income	1,468.39	1,189.19	23.50
Profit Attributable to Equity Holders	1,086.64	871.31	24.70

Ratios

Ratio	FY 2025	FY 2024
ROCE (%)	17.69	17.38
ROE (%)	11.85	11.35
Current Ratio	4.94	3.19
Debt-to-Equity	0.25	0.43
Asset Turnover	3.14	2.27
Net Profit Margin (%)	3.77	5.01

CHANGES IN KEY FINANCIAL RATIOS:

Pursuant to provisions of Regulation 34 (3) of SEBI (LODR) Regulation, 2015 read with Schedule V part B (1) details of changes in Key Financial Ratios is given hereunder:

S. No Ratio Type	Numerator	Denominator	FY 24-25	FY 23-24	% of Change
1 Current Asset Ratio	Current Assets	Current Liabilities	4.94	3.19	55.00%
2 Debt Equity Ratio	Debt	Equity	0.24	0.31	-21.26%
3 Debt Service Coverage Ratio	Earnings available for debt service	Total Debt service	8.89	8.20	8.47%
4 Return on Equity Ratio	PAT	Average Shareholders Equity	12.29%	12.15%	1.10%
5 Inventory Turnover Ratio	Cost of goods sold	Average Inventory	5.07	3.05	65.88%
6 Trade Receivable Turnover Ratio	Net Credit Sales	Average Accounts Receivable	4.90	3.76	30.32%
7 Trade Payable Turnover Ratio	Purchases	Average Trade Payables	63.96	28.54	124.13%
8 Net Capital Turnover Ratio	Net Sales	Working capital	2.85	2.54	16.54%
9 Net Profit Ratio	PAT	Net Sales	3.78%	5.03%	-24.80%
10 Return on Capital Employed	EBIT less Other Income	Capital Employed	11.18%	10.67%	4.75%
11 Return on Investment	Other Income (Excluding Dividend)	Average Cash, Cash Equivalents & Other Marketable Securities +Investments (Current + Non-Current)	NA	NA

Review of Sales

The company recorded a healthy increase in overall sales during FY25, with notable gains across both domestic and export segments. Domestic sales in the wholesale category rose sharply from 15,318.82 lakh in FY24 to 25,429.67 lakh in FY25, indicating stronger market demand and possibly an expansion of distribution reach. Retail sales, which were absent in FY24, contributed 296.24 lakh in FY25, suggesting the introduction or revival of direct-to-consumer channels. Export sales also posted robust growth, increasing from 1,999.42 lakh in FY24 to 2,994.29 lakh in FY25, reflecting improved penetration in overseas markets and a broader global footprint.

Particulars	FY25 ( lakh)	FY24 ( lakh)
Domestic Sales
Wholesale	25,429.67	15,318.82
Retail	296.24	-
Export Sales	2,994.29	1,999.42

Human Resources Internal Control Systems

The Company has established a robust internal control framework commensurate with the size, scale, and nature of its operations. These controls are designed to ensure the orderly and efficient conduct of business, safeguard assets, prevent and detect fraud and errors, ensure the accuracy and completeness of accounting records, and facilitate the timely preparation of reliable financial information. The internal control systems are supplemented by documented policies, procedures, and regular internal audits conducted by independent professionals. The Audit Committee periodically reviews the findings of the internal auditors, along with management responses and corrective actions taken, to ensure the continued adequacy and effectiveness of these systems. Based on the review, the Board is of the opinion that the Companys internal control systems are operating effectively and are adequate to meet its business requirements.

CAUTIONARY STATEMENT:

The Statement made in Management Discussion and Analysis report which seeks to describe the objectives, projections, estimates, and predictions may be considered to be forward-looking statements and are stated as required by applicable laws and regulations. Actual results could differ from those expressed or implied and are determined by many factors including global and domestic demand-supply conditions, process, raw materials availability, tax laws, governmental policies, and other statutes which may affect actual results which may be different from what the Directors envisaged in terms of future performance and outlook