Uday Jewellery Industries Ltd Management Discussions

1. ECONOMIC AND INDUSTRY OVERVIEW

The Indian gems and jewellery industry continues to remain an important contributor to the countrys manufacturing, retail and export ecosystem. The industry is undergoing a gradual structural shift towards organised businesses, supported by increasing consumer awareness regarding product quality, purity, transparency, certification and brand credibility. Consumers are increasingly seeking greater assurance regarding the authenticity and quality of jewellery, creating opportunities for established and professionally managed jewellery businesses.

The organised jewellery segment is also benefiting from changing consumer preferences, increasing formalisation of the sector and the growing importance of branded and quality- assured jewellery. At the same time, the industry remains sensitive to movements in gold and precious- metal prices, changes in disposable income, consumer sentiment, competitive intensity and evolving regulatory requirements.

For jewellery manufacturers and retailers, the operating environment therefore requires a combination of product quality, efficient sourcing, disciplined inventory and working- capital management, customer trust and the ability to respond quickly to changing consumer preferences.

The Company believes that the long- term fundamentals of the Indian jewellery market remain favourable and that increasing formalisation provides opportunities for established participants to strengthen their market position.

2. COMPANY OVERVIEW AND BUSINESS MODEL

Uday Jewellery Industries Limited (UJIL or the Company) is engaged in the gems and jewellery business, with capabilities spanning jewellery manufacturing and sales. The Companys manufacturing operations specialise in handmade gold jewellery studded with precious and semi- precious natural gemstones, flat diamonds, rose- cut diamonds, diamonds and cubic zirconia. The Companys products are sold across domestic and overseas markets.

The Companys business model is centred on combining manufacturing capabilities, product development, market relationships and distribution opportunities to serve evolving customer requirements across different jewellery categories.

The Company continues to focus on strengthening its product portfolio and market reach while improving operating efficiencies. The increasing scale of the business also provides an opportunity to improve procurement, manufacturing utilisation, distribution and other operational processes through greater integration.

During FY 2025- 26, the Companys business underwent significant expansion through strategic business combinations. The acquisition of the running business of Sanghi Jewellers Private Limited and the amalgamation of Narbada Gems and Jewellery Limited with UJIL have materially expanded the Companys operating scale and business platform.

3. FINANCIAL PERFORMANCE

The Company delivered a significantly improved financial performance during FY 2025- 26.

Particulars	FY 2025-26	FY 2024-25*
Revenue from Operations	Rs. 72,563.09 lakh	Rs. 37,175.92 lakh
Other Income	Rs. 799.50 lakh	Rs. 108.40 lakh
Total Income	Rs. 73,362.59 lakh	Rs. 37,284.33 lakh
Profit Before Tax	Rs. 4,860.62 lakh	Rs. 2,131.73 lakh
Profit After Tax	Rs. 3,576.78 lakh	Rs. 1,575.40 lakh
Basic EPS	Rs. 10.78	Rs. 4.92
Diluted EPS	Rs. 10.78	Rs. 4.92

\*FY 2024-25 figures are restated pursuant to the Scheme of Amalgamation.

Revenue from operations increased by approximately 95% 95% from Rs.371.76 crore to Rs.725.63 crore. Profit After Tax increased by approximately 127% 127% from Rs.15.75 crore to Rs.35.77 crore. Basic and diluted EPS increased from Rs.4.92 to Rs.10.78.

The improvement in reported performance reflects both the Companys operational growth and the impact of the strategic business combinations undertaken during the period. Consequently, the FY 2025- 26 results should be viewed in the context of the expanded business platform following the integration of the Sanghi Jewellers business and the amalgamation of Narbada Gems and Jewellery Limited.

The Companys total income of Rs. 733.63 crore and Profit Before Tax of Rs. 48.61 crore demonstrate the substantially higher scale achieved during the year.

4.STRATEGIC DEVELOPMENTS AND BUSINESS COMBINATIONS

A significant development during the year was the completion of the amalgamation of Narbada Gems and Jewellery Limited with Uday Jewellery Industries Limited.

The Scheme of Amalgamation was sanctioned by the Honble National Company Law Tribunal, Hyderabad Bench, and became effective on 19 February 2026, with an appointed date of 1 April 2024. Pursuant to the Scheme, the Company allotted 97,81,025 equity shares to the eligible shareholders of the erstwhile Narbada Gems and Jewellery Limited on 5 March 2026.

The amalgamation has expanded the Companys business platform through the addition of high- value diamond jewellery manufacturing capabilities. It also brings opportunities for operational synergies, a broader customer base and increased business scale.

In addition, the Company acquired the running business of Sanghi Jewellers Private Limited in October 2025. The business combination contributed to the Companys FY 2025- 26 revenue and profitability and represents another important step in the Companys strategy of expanding its operating platform.

The Company is now focused on integrating these businesses effectively, extracting operational synergies and ensuring that the enlarged organisation operates with appropriate financial discipline and governance standards.

5.OPERATIONAL PERFORMANCE

The Companys operational performance during FY 2025- 26 benefited from the expansion of its business platform and broader product capabilities.

The Companys manufacturing capabilities cover handmade gold jewellery as well as jewellery incorporating diamonds and other precious and semi- precious gemstones. The expanded business platform following the Narbada amalgamation provides an opportunity to further develop high- value diamond jewellery manufacturing and broaden the Companys product offering.

The Company continues to focus on:

? Improving manufacturing and operational efficiency;

? Expanding its product portfolio across gold, diamond and studded jewellery;

? Strengthening retail and wholesale distribution;

? Developing new market opportunities;

? Improving integration across the enlarged business;

? Maintaining appropriate inventory and working-capital discipline; and

? Building long-term customer relationships through quality and transparency.

The Companys increased scale also provides opportunities to leverage common capabilities, streamline processes and improve the utilisation of resources across the combined operations.

6.MARKET OPPORTUNITIES AND GROWTH DRIVERS

The Company sees several opportunities for sustainable growth over the medium to long term.

Product diversification

Consumer preferences within the jewellery market continue to evolve across designs, price points, gemstones and product categories. The Company intends to widen its product portfolio across gold, diamond and studded jewellery to address different customer requirements.

Expansion of distribution

The Company intends to strengthen its retail and wholesale distribution network and selectively evaluate opportunities in new geographies. The enlarged business platform provides a stronger foundation for expanding market presence.

Benefits of business integration

The completion of the Companys strategic business combinations creates opportunities to realise operating synergies, consolidate capabilities and improve efficiencies.

Organised jewellery market

The continuing shift towards organised and quality- assured jewellery businesses provides opportunities for companies that can offer product authenticity, quality, transparency and dependable customer service.

Customer trust

Hallmarking compliance, transparent pricing and consistent product quality remain important purchase considerations in the jewellery industry. The Company intends to continue strengthening these areas to build long- term customer confidence.

7.RISKS AND CONCERNS

The Companys operations are exposed to various business and industry risks. The principal risks identified by the Company include:

Gold and precious-metal price volatility

Fluctuations in gold and other precious- metal prices can influence jewellery prices, consumer demand, inventory values and working- capital requirements. Effective inventory management and prudent financial planning remain important to manage this exposure.

Consumer demand

Jewellery demand can be influenced by economic conditions, disposable income, consumer confidence, seasonal factors and changing preferences. The Company seeks to mitigate this risk through product diversification and broader market reach.

Competitive environment

The jewellery sector is highly competitive, with organised and established players competing across product quality, design, pricing, customer experience and distribution. The Companys focus on manufacturing capabilities, product diversification, customer trust and operational efficiency is intended to strengthen its competitive position.

Regulatory and compliance risk

The jewellery industry operates within a framework of applicable laws, regulations and standards relating to business operations, taxation, hallmarking, corporate governance and financial reporting. The Company continues to monitor applicable requirements and strengthen its compliance processes.

Integration risk

Following the Companys recent business combinations, effective integration of people, processes, systems and operations remains important. Management is focused on achieving the expected operational synergies while maintaining appropriate governance and financial controls.

8.INTERNAL CONTROL SYSTEMS

The Company has established a framework of internal financial controls and compliance systems appropriate to the size and nature of its operations.

The internal control framework is supported by assessments undertaken by the Internal Auditors and Statutory Auditors, inputs from external consultants where applicable, and oversight by Management and the Board Committees, including the Audit Committee.

The Board has expressed its satisfaction regarding the adequacy and effectiveness of the internal financial controls in place. The Company continues to strengthen its control environment in line with the increasing scale and complexity of its operations.

With the expansion of the Companys business through the recent strategic combinations, continued attention to financial controls, inventory management, procurement, receivables, compliance and reporting processes will remain an important management priority.

9.HUMAN RESOURCES

People remain an important component of the Companys ability to execute its business strategy.

As at 31 March 2026, the Company had 488 employees on its rolls.

The Company continues to focus on employee engagement, talent development and professional growth. Internal career progression through job rotation and job enlargement is encouraged to broaden employee capabilities and create opportunities for development within the organisation.

As the Companys operations expand, management recognises the importance of retaining skilled personnel, strengthening functional capabilities and developing an organisational culture that supports accountability, collaboration and continuous improvement.

10. SUSTAINABILITY, RESPONSIBLE BUSINESS AND GOVERNANCE

The Company recognises that responsible business practices are important to sustainable long- term growth.

As a jewellery manufacturing company, the Company is conscious of the environmental, social and governance considerations associated with sourcing, processing and manufacturing precious metals and jewellery. It continues to focus on responsible practices, quality, integrity and transparency.

Particular emphasis is placed on efficient utilisation and recovery of precious metals. Precious- metal- bearing manufacturing waste, wherever generated, is collected and processed for recovery to reduce material loss and improve resource utilisation. The Company also promotes digital communication, responsible waste management and efficient use of resources.

The Company believes that strong governance, transparent processes, regulatory compliance and responsible business conduct are essential to maintaining stakeholder confidence as the business grows.

11.FUTURE OUTLOOK

The successful completion of the Companys recent business combinations has created a significantly larger platform from which UJIL can pursue its next phase of growth.

The Companys immediate focus will be on consolidating the expanded operations, realising available synergies and maintaining disciplined execution. Management intends to strengthen the Companys retail and wholesale distribution network while selectively evaluating opportunities in new markets.

The key areas of strategic focus going forward include:

Product diversification: Expanding the Companys portfolio across gold, diamond and studded jewellery.

Operational efficiency: Improving processes and extracting synergies across the combined business. Working- capital discipline: Maintaining prudent inventory, receivables and working- capital management as the scale of operations increases.

Financial discipline: Deploying capital prudently and maintaining an appropriate balance between growth investments and financial discipline.

Governance and compliance: Continuing to strengthen internal controls, compliance systems and governance practices in line with the Companys expanding operations.

Customer trust: Maintaining emphasis on quality, hallmarking compliance, transparent pricing and reliable customer service.

The Company remains positive about the medium- to long- term prospects of the Indian jewellery sector and intends to pursue sustainable and profitable growth while maintaining strong corporate governance and regulatory discipline.

12.CAUTIONARY STATEMENT

This Management Discussion and Analysis contains statements relating to the Companys objectives, expectations, plans and future outlook that may constitute forward- looking statements. Such statements are based on assumptions and expectations that the Company considers reasonable as of the date of this Report.

Actual results may differ materially from those expressed or implied due to various factors, including changes in economic conditions, consumer demand, gold and precious- metal prices, competition, regulatory requirements, business conditions, integration of acquired or amalgamated operations and other risks and uncertainties.

The Company undertakes no obligation to publicly update or revise any forward- looking statements, except as may be required under applicable laws and regulations.