Uday Jewellery - Uday Jewellery

📊 BSE: 539518 🏢 Gems, Jewellery And Watches 📅 Last Updated: 11/13/2025 15:25

💰 Financial Performance

Revenue Growth by Segment

The company achieved a historical revenue CAGR of approximately 30% between FY16 and FY20. In FY2024, the company reported total revenue of INR 173.8 Cr. Growth is primarily driven by the B2B segment, which remains the company's core strength, while the export segment (commenced in 2018) is being scaled to become a significant revenue contributor in the medium term.

Geographic Revenue Split

The majority of revenue is derived from the domestic Indian market, particularly through large retail chains. The company expanded into the Middle Eastern market (UAE) in 2018, and management expects international sales to account for a significant portion of revenues as they scale global outreach.

Profitability Margins

Operating margins remained stable at 7.7% in FY2024 compared to 7.6% in FY2023. While gross contribution margins improved, the gains were offset by increased employee costs. Net margins are expected to be boosted as the higher-margin B2C/retail business gains traction.

EBITDA Margin

The operating margin stood at 7.7% in FY2024. Core profitability is supported by an ROCE of ~18% (as of FY20). Interest coverage improved from 9.0 times in FY2024 to 9.7 times in FY2025, indicating strengthening debt-servicing capabilities.

Capital Expenditure

The company planned a capital expenditure of approximately INR 2 Cr for FY2025. This follows a significant capacity expansion in November 2023, where manufacturing was shifted to a new 10,000 sq. ft facility in Hyderabad.

Credit Rating & Borrowing

ICRA reaffirmed a long-term rating of [ICRA]BBB (Stable). The company's total rated debt is INR 40.92 Cr, including a INR 40.00 Cr cash credit limit. Borrowing costs are managed through a conservative capital structure with a debt-to-operating profit ratio of 1.5 times in FY2025.

⚙️ Operational Drivers

Raw Materials

Primary raw materials include Gold (unhedged), Cubic Zirconia (CZ) diamonds, and various colored gemstones. Gold represents the most significant cost component and is subject to price volatility.

Import Sources

Raw materials are sourced through an established vendor network perfected over 100 years. The group maintains production facilities in both India and China to optimize sourcing and manufacturing costs.

Key Suppliers

Specific supplier names are not disclosed, but materials are procured from a longstanding network of vendors. CZ and gemstones are purchased at volume-based attractive prices due to the scale of HRS Group operations.

Capacity Expansion

Current manufacturing is centralized in a 10,000 sq. ft unit in Hyderguda, Hyderabad, established in November 2023. This facility is fully integrated with technology-enabled processes to ensure high quality at economical costs.

Raw Material Costs

Raw material costs are a major revenue component. The company uses a proactive real-time market participation policy for gold procurement to mitigate costs. However, high levels of unhedged inventory expose the company to gold price volatility.

Manufacturing Efficiency

The company utilizes state-of-the-art equipment that allows it to produce jewellery at a fraction of the cost incurred by smaller players. Integrated facilities ensure end-to-end control over the production cycle.

Logistics & Distribution

The company utilizes an efficient logistics platform perfected over 100 years of group operations to serve national retail chains and international clients.

📈 Strategic Growth

Expected Growth Rate

30%

Growth Strategy

Growth will be achieved through the amalgamation with Narbada Gems and Jewellery Limited (NGJL), which is currently in the NCLT process. Additionally, the company is launching an online B2C platform to capture the e-commerce boom and is aggressively scaling its export footprint in the UAE and Middle East.

Products & Services

Gold jewellery studded with Cubic Zirconia (CZ), colored stone-studded jewellery (Hyderabadi Gharana tradition), fashion jewellery, and precious gemstone-studded artifacts.

Brand Portfolio

Uday Jewellery Industries Limited (UJIL), Hanumanth Rai Sanghi Group (HRS Group).

New Products/Services

Expansion into the B2C segment via e-commerce and franchise channels is expected to provide a de-risking cushion and higher margins compared to the traditional B2B model.

Market Expansion

Targeting Tier 2 and Tier 3 Indian cities as demand hotspots and expanding the global footprint in the UAE. The online jewellery market in India is expected to reach USD 3.6 billion in three years.

Market Share & Ranking

UJIL is a dominant player in the niche CZ and gem-studded jewellery market in India, backed by the HRS Group, one of the largest organized players in the sector.

Strategic Alliances

Amalgamation with Narbada Gems and Jewellery Limited (NGJL). The company also maintains symbiotic relationships with major branded retail players.

🌍 External Factors

Industry Trends

The Indian fashion jewellery market is valued at INR 150 Billion, growing at a 20% CAGR. There is a significant shift from unorganized to organized players due to mandatory hallmarking and increased transparency requirements.

Competitive Landscape

Faces competition from large organized players like Titan (Tanishq) and Kalyan Jewellers, as well as a vast unorganized manufacturing sector.

Competitive Moat

The moat is built on a 100-year legacy, integrated manufacturing that lowers costs, and deep-rooted relationships with India's largest jewellery retailers. These advantages are sustainable due to the high capital intensity required for competitors to build captive supply chains.

Macro Economic Sensitivity

Highly sensitive to the growth of the Indian middle class, which is expected to reach 547 million by 2025, driving jewellery demand.

Consumer Behavior

Increasing preference for branded, hallmarked jewellery and a rising trend in men's jewellery (rings, bracelets) and affordable CZ pieces for high-end customers.

Geopolitical Risks

Armed conflicts and global tensions (e.g., US-Iran, Middle East instability) can disrupt the gold market, leading to rising prices and falling demand.

⚖️ Regulatory & Governance

Industry Regulations

Mandatory hallmarking (effective June 2021), mandatory customer KYC, and rigorous regulatory environments for gold procurement and transparency.

Environmental Compliance

Exposure to environmental risks is low, though physical climate change (flooding/crop loss) can indirectly impact rural demand for jewellery.

Taxation Policy Impact

Subject to standard Indian corporate tax rates; fiscal policies promoting jewellery exports benefit the company's international scaling plans.

Legal Contingencies

The company is currently undergoing the NCLT process for the amalgamation of Narbada Gems and Jewellery Limited (NGJL) with UJIL.

⚠️ Risk Analysis

Key Uncertainties

Gold price volatility (unhedged inventory), high customer concentration (59.7% revenue from top 5), and potential impact of large retailers setting up their own captive production units.