Viram Suvarn Ltd Management Discussions

Introduction

Indias gold and diamond trade contributes about 7% to the countrys Gross Domestic Product (GDP), with the Gems & Jewellery sector employing nearly ive million people. Recognising its immense potential for growth and value addition, the Government has identi ied the sector as a focus area for export promotion.To strengthen ‘Brand India in the global market, several initiatives have been introduced, including measures to promote investment, upgrade technology, and enhance skills. The Government has also permitted 100% FDI in the sector under the automatic route, allowing foreign investors and Indian companies to invest without prior approvals. Further, the India-United Kingdom (UK) Comprehensive Economic and Trade Agreement (CETA), signed in July 2025, has eliminated import duties of 2.5-4% on plain gold and diamond jewellery, giving Indian exporters a competitive edge and expected to more than double Indias Gems & Jewellery exports to the UK to Rs. 21,183 crore (US$ 2.5 billion) by 2027.

Market Size

Indias Gems & Jewellery market size stood at Rs. 7,31,255 crore (US$ 85 billion) in January 2026 and is projected to expand to Rs. 11,18,390 crore (US$ 130 billion) by 2030. During FY26 (April-February 2026), Indias gems and jewellery exports stood at US$ 25.93 billion. The latest growth momentum is being driven by increasing global demand for gold jewellery and cut & polished diamonds, supported by favourable trade agreements and rising consumer spending in key markets such as the US, UK, and the Middle East.

Investments/Developments

Cumulative FDI in lows in diamond and gold ornaments in India stood at Rs. 9,727.03 crore (US$ 1.52 billion) between April 2000-December 2025. Some of the key developments in this industry are listed below: Zero pearl VC led a US$ 0.65 million (Rs. 5.5 crore) pre-seed round in ONYA (Dec 2025 period), funding of line retail expansion and growth in Indias fast-growing lab-grown diamond jewellery segment. Blue Stone invested US$ 2.83 million (Rs. 25 crore) in lab-grown diamond brand Ethera in Feb 2026, supporting store expansion, omnichannel growth, and scaling Indias emerging lab-grown jewellery segment. Global institutions including Citigroup and Socie te Ge ne rale invested US$ 19.30 (Rs. 170.6 crore) in PNGS Reva (Feb 2026 IPO anchor round), backing expansion of its diamond jewellery business in India. In January 2026, Titan Company launched its new lab-grown diamond jewellery brand “beYon”, marking its entry into the lab-grown diamond segment, targeting affordable, everyday-wear jewellery.

Limelight Diamonds expanded aggressively into the lab-grown diamond jewellery segment, targeting over 100 stores in 2026 and 200+ by 2027, re lecting strong category diversi ication. Fashion jewellery brand Gargi expanded its footprint by launching 4 new stores across India (Palghar, Udaipur, Bhopal, Kalyan) at the start of 2026. Gargi expanded to 50 Shoppers Stop locations nationwide, strengthening its shop-in-shop retail model and expanding reach across multiple cities in India. Sabyasachi Calcutta launched its irst digital ine jewellery boutique on Tata CLiQ Luxury on August 21, 2025, showcasing 18 carat gold pieces with diamonds, pearls and gemstones to expand its luxury reach. GemLab inaugurated its Exclusive Certi ied Gemstone Store in Rohtak on 20 July 2025, offering individually certi ied gems, each with an 8-digit GIN and trackable via the Gem Track System and plans to expand to the US, Canada, UK and Europe within two years. India and Thailand signed three key Memorandum of Understanding (MoUs) at the Bangkok Gem and Jewellery Fair on February 22, 2025, fostering collaboration in gemstone standardisation, coloured gemstone trade and silver jewellery to deepen bilateral cooperation.

Government Initiatives

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

Under Union Budget 2025-26, the customs tariff on jewellery (HSN code 7113) was reduced from 25% to 20% and on platinum indings from 25% to 5%, making jewellery more affordable and boosting domestic demand. In the Union Budget 2024, the government reduced the basic customs duty on gold and silver to around 6% and on platinum to about 6.4%, which remained unchanged in Budget 2026. The sector now has AEO status from the inance ministry, easing export-import processes with quicker cargo release 50% lower bank guarantees. The Indian government accepted the recommendation of GJEPC to promote indigenous manufacturing in the emerging Lab-grown diamond sector by providing research grants to the Indian Institute of Technology (IIT) for ive years. India has signed an FTA with the UAE, which will further boost exports and is expected to reach the target of US$ 52 billion. The Government has reduced customs duty on cut and polished diamonds and coloured gemstones from 7.5% to 5% and NIL. Revised SEZ Act is also expected to boost Gems & Jewellery exports.

Road Ahead

The future of Indias Gems & Jewellery sector will be shaped by the growing dominance of large retailers and established brands, which are steadily expanding their presence across the country. Organised players are not only introducing greater variety in terms of designs and product lines but are also driving higher levels of professionalism, transparency, and consumer trust in the market. Policy support remains a key growth catalyst. The governments liberal measures, such as easing restrictions on gold imports, reintroducing low-cost gold metal loans, and promoting exports through favourable trade agreements, are providing a strong foundation for sustained expansion. India is already recognised as a global hub for jewellery manufacturing, supported by ~450 organised manufacturers, importers, and exporters. These players, backed by increasing government support and rising global demand, are well-positioned to cater to both domestic and international markets. With these positive developments, Indias Gems & Jewellery industry is projected to grow to Rs. 11,18,390 crore (US$ 130 billion) by 2030, reaf irming its pivotal role in the countrys exports and retail ecosystem.

Sources: https://www.ibef.org/posters/gems-and-jewellery

Market Dynamics

Drivers: Emerging-Market Demand and Omnichannel Expansion are Broadening Market Research.

The jewelry market is bene iting from rising disposable incomes and expanding luxury consumption across emerging markets, particularly in India, the Middle East, and Southeast Asia. Increasing urbanization, growing middle-class populations, and cultural af inity toward gold and diamond jewelry are supporting demand across both daily-wear and ceremonial categories. At the same time, organized jewelry retailers are increasingly leveraging omnichannel strategies, digital customization tools, and direct-to-consumer platforms to improve accessibility and customer engagement. These developments are helping brands expand beyond traditional store-led sales models and capture younger digitally in luenced consumers.

The shift is visible through both industry and company trends. The World Gold Council reported that India remained one of the largest contributors to global jewelry consumption in 2025 despite elevated gold prices, supported by festive and wedding-related purchases. In parallel, Richemont stated that nearly 76% of group sales in FY 2025 came through direct-to-client channels, re lecting the growing role of digital and omnichannel engagement in luxury jewelry retail. Similarly, major jewelry brands are increasingly investing in e-commerce, virtual try-on technologies, and personalized collections to strengthen customer retention and expand geographic reach.

Restraints: High Gold Prices are Limiting Volume Growth across Key Markets.

One of the biggest restraints for the global jewelry market is the sustained increase in gold prices, which continues to reduce affordability and suppress volume demand across price-sensitive consumer markets. While higher precious metal prices support market value growth, they also increase ticket sizes and discourage discretionary purchases, particularly among middle-income consumers. The impact is especially signi icant in countries such as India and China, where gold jewelry purchases remain highly linked to weddings, festivals, and investment-oriented buying behavior. As a result, consumers are increasingly shifting toward lightweight jewelry, lower-carat products, and smaller-ticket purchases to manage spending.

The affordability pressure is clearly re lected in industry data. According to the World Gold Council, global jewelry demand volumes declined to nearly 1,542 tonnes in 2025, representing one of the lowest levels in recent years, as record-high gold prices affected purchasing behavior across major

Sources: https://www.grandviewresearch.com/indust ry-analysis/jewelry-market

SWOT Analysis, Outlook and Internal Controls Opportunities Improved access to the US market following trade policy relief: The revised India-US trade framework has brought the effective tariff on jewellery down from 50% to 18%, with zero duty now applicable on diamonds and coloured gemstones. This places Indian exporters in a structurally stronger position than several competing nations across diamonds, coloured gemstones and studded gold jewellery, and is expected to support a meaningful recovery in shipments to the US over the coming year.

Low US retail inventories supporting a replenishment cycle: US jewellery retailers are currently operating with unusually lean stock levels. As the new tariff structure takes markets. The organization further noted that elevated gold prices weighed on jewelry demand across most regions during 2025. In response, several jewelry retailers are increasingly focusing on lightweight collections, exchange programs, installment-based purchases, and lower-weight designs to sustain consumer demand amid rising precious metal cost.

hold, this is expected to translate into renewed order volumes through 2026 as US buyers rebuild inventory, offering near-term upside for Indian manufacturers and exporters.

Diversi ication of export markets: While the US remains an important destination, recent months have seen strong growth in shipments to the UAE, Hong Kong, Australia and France, among others. This broadening of the export base reduces dependence on any single market and improves resilience against future trade disruptions.

New and upcoming trade agreements: The CEPA with the UAE continues to support gem and jewellery trade, while Australias move to eliminate tariffs on Indian exports under ECTA from January 2026 opens further headroom. Continued progress on agreements such as the India-EU FTA could unlock additional long-term export potential.

Resilient gold demand despite price volatility: Even as elevated gold prices weigh on jewellery volumes, investment-led demand for gold remains irm, with overall gold demand expected to stay healthy through 2026. This underlines golds enduring role as a store of value alongside its ornamental use, and supports continued consumer engagement with the category even during periods of high prices.

Growth of Tier 2 and Tier 3 markets Rising disposable incomes and urbanisation in smaller towns continue to create headroom for retail expansion, particularly for organised players offering certi ied, hallmarked products.

Digital and omni-channel engagement Tools such as virtual try-on, video consultations and appointment scheduling continue to gain traction, allowing brands to extend their reach and improve convenience without diluting the in-store experience.

Rising preference for certi ied and hallmarked jewellery Consumers continue to shift toward hallmark-certi ied products and transparent billing, an area where organised players have a structural advantage over the unorganised segment.

Customisation, personalisation and product diversi ication Demand for bespoke designs, along with expansion into platinum, diamonds, fusion jewellery and lab-grown diamond products, allows brands to capture a wider range of price points and reduce reliance on traditional gold-only portfolios. The growing acceptance of lab-grown diamonds, in particular, is emerging as a meaningful category as some consumers look for value alternatives amid high gold and natural diamond prices.

Women as primary decision-makers Greater inancial independence among women continues to drive demand for self-purchased, fashion-led and lightweight everyday jewellery.

Festive and seasonal demand, artisan partnerships, sustainability and loyalty programmes Seasonal buying patterns around weddings and festivals, collaborations with regional artisans, ethically sourced and hallmark-certi ied offerings, and well-designed loyalty programmes remain durable sources of demand and brand differentiation.

Threats

Continued gold price volatility Gold prices have remained elevated and volatile, which is affecting jewellery affordability and pushing some consumers toward lighter-weight pieces or alternatives such as lab-grown diamonds. This volatility complicates pricing, margin planning and inventory decisions, and remains the single largest near-term risk to consumer demand.

Tightening of the duty-free gold import framework A newly introduced cap on duty-free gold imports under the advance authorisation scheme limits the previously unrestricted cost advantage available to exporters. This could raise input costs for some manufacturers and reduce the competitive edge Indian exporters have historically held over peers paying full import duties.

Lingering dependence on the US market despite tariff relief Although the recent tariff reduction is a positive development, exports to the US had earlier fallen sharply due to elevated tariffs, and the broader trade relationship remains an area to watch. Any renewed escalation or shift in US trade policy could again disrupt a market that has historically accounted for a signi icant share of Indias gem and jewellery exports.

Geopolitical disruption in West Asia Ongoing tensions in the West Asia region pose a risk to exports to that market, adding to the pressure already faced by the sector from earlier tariff-related setbacks.

Competitive pressure from the unorganised sector Indias jewellery market remains highly fragmented, with local jewellers competing on price and informal credit terms while retaining loyal local customer bases. The growing reach of organised retail and e-commerce means smaller players can now also access wider audiences, making differentiation, customer loyalty and value proposition more important than ever.

Regulatory and compliance changes the sector continues to operate under evolving tax, customs and trade regulations. Any change to GST rates, certi ication requirements or import-export rules could affect costs, pricing and demand, requiring continued vigilance and lexibility.

Shifting consumer preferences younger buyers are increasingly drawn to minimalist, contemporary designs and expect faster, more convenient online experiences. Brands that are slow to adapt risk losing share to more agile competitors.

Sensitivity to broader economic conditions As a discretionary category, jewellery demand can soften during periods of economic uncertainty or weaker consumer sentiment, even though the category has historically proven resilient over the longer term.

Supply chain dependencies Continued reliance on gold imports and logistics networks leaves the business exposed to delays, cost increases or shortages arising from global supply disruptions or policy changes.

Counterfeit and substandard products, retail cost pressures, security risks and talent retention The rise of online jewellery sales has been accompanied by more counterfeit and imitation products. At the same time, rent, utilities and staf ing costs for premium retail locations remain high, physical stores carry inherent security risks, and attracting and retaining skilled sales staff remains an ongoing operational challenge.

Segment-Wise or Product-Wise Performance

The Company operates in a single business segment and therefore, separate segment-wise or product-wise performance is not applicable

Outlook

The jewellery industry enters FY2026-27 at an in lection point, shaped as much by global trade developments as by evolving consumer expectations. The recent reduction in US tariffs and the resulting prospect of a demand rebound, alongside continued diversi ication into markets such as the UAE, Australia and Hong Kong, provide a more constructive external environment than the sector has seen in recent years. At the same time, sustained gold price volatility and a tighter duty-free import framework mean that cost management and pricing agility will remain critical. Looking ahead, the Company aims to evolve from a jewellery retailer into a curator of experiences that bring together heritage and modernity. This means moving beyond the transaction to build genuine emotional connections through storytelling, craftsmanship and personalised service, with stores designed as spaces where customers can explore, learn and celebrate the artistry behind each piece. Recognising the demographic shifts and rising spending power in emerging urban and semi-urban centres, the Company plans to expand its physical footprint through stores that re lect local culture while staying true to consistent brand standards, supported by community engagement initiatives that build trust and loyalty over time. On product development, the focus will remain on innovation rooted in tradition introducing collections that suit contemporary lifestyles while honouring established craftsmanship. Customisation will be central to this approach, and the Company will continue to monitor the growing relevance of lab-grown diamonds and lighter-weight designs as consumers respond to elevated gold and diamond prices. Sustainability and ethical practice will continue to be treated as core to long-term growth. By committing to responsible sourcing and transparent hallmarking, the Company aims to deepen consumer trust and contribute positively to the wider industry ecosystem. While online sales are not currently part of the operating model, the Company continues to explore how digital tools can complement the in-store experience from virtual consultations and design previews to appointment scheduling building toward a cohesive, omni-channel approach without diluting the focus on personalised, face-to-face service. In a landscape shaped by gold price volatility, shifting global trade policy and changing consumer expectations, agility and customer-centricity will remain the Companys guiding principles. Through continuous engagement with customers, responsiveness to market and policy developments, and investment in people and processes, the Company is well placed to navigate near-term uncertainty while capturing the opportunities created by a more favourable trade environment.

Internal Control Systems and Their Adequacy

The Company maintains a robust internal control framework designed to safeguard assets, ensure the integrity of inancial reporting, and promote operational ef iciency, particularly important given the heightened gold price volatility and evolving trade and customs regulations the sector currently faces. These systems are intended to provide reasonable assurance that inancial statements are prepared reliably and in accordance with applicable accounting standards.

Governance and Oversight

The Board of Directors, with the support of the Audit Committee, oversees the design and functioning of the internal control framework. Management is responsible for implementing and monitoring these controls to manage risk, including risks arising from gold price movements and changes in customs or duty structures, and to support business objectives.

Financial Controls

Comprehensive inancial controls ensure accurate and timely recording of transactions, including:

Segregation of duties authorisation, recording and custody of assets are handled by separate individuals to reduce the risk of error or fraud.

Authorisation and approval all transactions follow de ined approval levels in line with company policy. Reconciliations bank accounts, inventory and other key balances, including gold stock valuations, are reconciled regularly to identify and resolve discrepancies promptly given current price volatility.

Operational Controls

Operational controls support ef icient and consistent business processes:

Standard operating procedures documented SOPs govern procurement, sales and inventory management to maintain consistency and quality, with periodic review to re lect changes in duty structures and import frameworks. Physical controls access to physical assets is restricted, with surveillance systems in place to deter unauthorised access and theft.

Performance monitoring regular reviews and audits assess the effectiveness of controls and highlight areas for improvement, including monitoring of margin impact from gold price luctuations.

Compliance and Regulatory Controls

The Company remains committed to meeting all applicable legal and regulatory requirements:

Regulatory compliance adherence to hallmarking standards, tax laws, customs and duty regulations, and anti-money laundering requirements, with active monitoring of recent changes to import duty frameworks. Internal audits an independent internal audit function evaluates compliance with policies and procedures, identi ies risks, and recommends corrective actions.

Training and awareness regular training ensures employees remain informed of regulatory requirements and internal policies, including updates arising from evolving trade and customs rules.

Information Technology Controls

While the Company operates primarily through of line retail, information technology remains important in supporting day-to-day operations:

System access controls access to information systems is role-based and restricted to prevent unauthorised use. Data security appropriate measures protect sensitive information from unauthorised access, alteration or loss.

Backup and recovery regular data backups and recovery plans support business continuity in the event of disruption.

Financial Performance

The inancial year 2025-26 unfolded against a business environment shaped by continued volatility in gold prices, evolving consumer sentiment, and a shifting cost structure across the Companys operations. The Company remained anchored to its core strategy of delivering value through quality, trust, and consistent customer engagement in the of line gold jewellery retail space, even as revenue trends moderated compared to the previous year.

For the inancial year ended 31st March 2026, the Company recorded a Total Revenue of 2,502.11 lakhs, compared to 2,648.20 lakhs in FY 2024-25. Revenue from operations stood at 2,459.78 lakhs, a decline from 2,648.20 lakhs in the previous year, re lecting more moderate business volumes during the year. This was supplemented by Other Income of 42.34 lakhs, a new contribution not present in the prior year, which helped narrow the overall decline in total revenue to 5.5%

Revenue Trends, Pro itability and Cost Structure

While revenue from operations moderated during the year, the Company achieved a sharp improvement in pro itability, driven primarily by a signi icant reduction in total expenses and a more ef icient cost structure. Total expenses stood at 1,508.87 lakhs, down from 2,197.61 lakhs in FY 2024-25, a decline of nearly 31%. This was achieved despite a substantial rise in the Purchase of Stock-in-Trade, which increased to 3,620.51 lakhs from 2,225.57 lakhs, as this was largely offset by a corresponding movement in Changes in Inventories of Finished Goods, Work-in-Progress and Stock-in-Trade, which stood at (2,215.73) lakhs as against (115.62) lakhs in the prior year, re lecting a signi icant build-up of inventory during the year. Employee Bene it Expense reduced to 11.81 lakhs from 25.31 lakhs, Financial Costs declined marginally to 0.19 lakhs from 0.28 lakhs, and Depreciation and Amortisation Expense fell to 0.17 lakhs from 0.85 lakhs. Other Expenses increased to 91.91 lakhs from 61.41 lakhs, re lecting higher operational and administrative costs during the year. As a result of these movements, Pro it before tax rose sharply to 993.24 lakhs from 450.59 lakhs in the previous year, an increase of over 120%. There were no exceptional items during the year. After accounting for a Current Tax expense of 233.98 lakhs (as against 105.00 lakhs in FY 2024-25) and a Deferred Tax expense of 1.57 lakhs (as against 4.69 lakhs), Pro it after Tax stood at 757.70 lakhs, registering a growth of over 122% compared to 340.89 lakhs in the prior year. Total Comprehensive Income for the year, with no other comprehensive income recorded, also stood at 757.70 lakhs. The Companys performance during the year re lects a disciplined approach to cost management and inventory strategy, which together drove a substantial improvement in bottom-line pro itability even as topline revenue moderated.

Accounting Treatment

In the preparation of its inancial statements for the inancial year, the Company has followed all applicable Indian Accounting Standards (Ind AS) as prescribed under the Companies Act, 2013. There has been no deviation or alternative treatment adopted in the accounting of any transaction that differs from the prescribed standards. Accordingly, no disclosure is required regarding any alternate accounting treatment, as the inancial statements present a true and fair view of the state of affairs of the Company in full compliance with the applicable accounting framework.

Material Developments in Human Resources / Industrial Relations

The Company continues to maintain cordial and harmonious relations with its employees and considers its human resources to be an important asset for the sustained growth and development of the Company. During the year under review, there were no material developments in Human Resources or Industrial Relations requiring speci ic disclosure. The Company had_5 employees as at the end of the inancial year.

Key Financial Ratios

Pursuant to Schedule V, Part B of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the details of signi icant changes (i.e. change of 25% or more as compared to the immediately previous inancial year) in key inancial ratios, along with detailed explanations, are given below:

Sr. No Ratio	As At 30TH Mar, 2026	As At 30TH Mar, 2025	% Change
I. Debtors Turnover	-	--	NA
II. Inventory Turnover	0.67	2.29	-71%*
III. Interest Coverage Ratio	NA	NA	NA
IV. Current ratio	25.11	8.95	181%*
V. Debt Equity Ratio	-	-	NA
VI. Operating Pro it Margin (%)	40.38	17.02	137.32%*
VII. Net Pro it Margin (%)	0.31	0.13	138%*

* Explanation for ratios where the variance is beyond 25% compared to previous year: Inventory Turnover (%)

The company held substantially higher closing inventory compared to the previous year, which signi icantly increased the average inventory base used in the denominator. Since revenue from operations remained relatively stable, the ratio declined sharply, indicating slower movement of goods during the year.

Current Ratio (%)

Current Assets grew sharply driven by a massive build-up in Inventory and other

Current Assets during the year, while Current Liabilities remained nearly unchanged. This re lects a signi icant increase in short-term liquidity, largely on account of higher stock-in-trade held at year-end.

Net Pro it Margin (%)

Net pro it after tax more than doubled compared to the previous year, driven by improved trading margins, lower inance costs, and better cost management, while revenue from operations remained at a similar level. This resulted in a substantially higher proportion of revenue being retained as net pro it. Operating Pro it Margin (%)

Operating Pro it Margin ratio improved signi icantly mainly due to a substantial increase in pro it before tax growing at a much faster pace compared to the increase in revenue from operations, driven by improved

Details of any change in Return on Net Worth as compared to the immediately previous inancial year along with a detailed explanation thereof.

The Return on Equity Ratio increased from 0.14 in FY 2024-25 to 0.17 in FY 2025-26, representing an improvement of approximately 21%. The increase in the ratio is primarily attributable to the signi icant growth in net pro it after tax during the year. The Companys net pro it after tax increased from 340.89 lakhs in FY 2024-25 to 757.70 lakhs in FY 2025-26, while shareholders equity also increased during the year on account of fresh equity infusion and accretion of retained earnings. The higher growth in pro itability resulted in improved returns generated on the shareholders funds and consequently an improvement in the Return on Equity Ratio.

Cautionary Statement

Statements in the Management Discussion and Analysis (MD&A) that describe the Companys objectives, expectations, forecasts, or predictions may be deemed to be "forward-looking statements" within the meaning of applicable securities laws and regulations. These forward-looking statements are based on certain assumptions and expectations of future events, and are subject to a number of known and unknown risks, uncertainties, and other factors many of which are beyond the Companys control that could cause actual results, performance, or achievements to differ materially from those projected. Such factors include, but are not limited to, changes in macroeconomic conditions, luctuations in market demand, changes in government policies and regulations, technological developments, competitive dynamics, and geopolitical events. The Company does not undertake to update any forward-looking statements to re lect future events or circumstances, except as required by law.