💰 Financial Performance

Revenue Growth by Segment

Standalone total income plummeted by 98.92% from INR 47.76 Cr in FY 2023-24 to INR 0.52 Cr in FY 2024-25. This drastic decline indicates a near-total cessation of core business activities at the standalone level during the period.

Geographic Revenue Split

The company faces high geographical concentration risks at the standalone level. It operates through its registered office in Mumbai and a factory in Surat, with international exposure via its wholly-owned subsidiary, KIL International Limited, based in Hong Kong.

Profitability Margins

Operating Profit Margin (OPM) was 1.91% and Net Profit Margin (NPM) was 0.37% in FY 2023-24. Return on Net Worth decreased by 65.79% from 0.38% in FY 2023-24 to 0.13% in FY 2024-25, reflecting severely weakened profitability.

EBITDA Margin

Operating Profit Margin was 1.91% in FY 2023-24. Core profitability is constrained by thin margins and stagnant revenues, which have now transitioned into a significant decline in FY 2024-25.

Credit Rating & Borrowing

Ratings were reaffirmed at [ICRA]B+(Stable)/[ICRA]A4 as of September 2022 for a total rated amount of INR 25.00 Cr. The rating reflects a moderate financial profile and stretched liquidity.

⚙️ Operational Drivers

Raw Materials

Polished diamonds are the primary raw material, representing a significant but unspecified percentage of total costs. The company's profitability is highly sensitive to price fluctuations in these materials.

Import Sources

Raw materials are sourced through international markets, likely involving Hong Kong given the location of the company's wholly-owned subsidiary, KIL International Limited.

Capacity Expansion

The company operates a factory in the Surat Special Economic Zone (Sachin, Surat). Specific installed capacity figures or expansion plans are not disclosed in the available documents.

Raw Material Costs

Raw material costs are a critical driver, as thin operating margins of 1.91% leave the company vulnerable to polished diamond price volatility, which can quickly erode net profitability.

Manufacturing Efficiency

The company maintains a factory in the Surat SEZ; however, the inventory turnover ratio was extremely low at 0.02% in FY 2023-24, indicating significant manufacturing and sales cycle inefficiencies.

📈 Strategic Growth

Growth Strategy

The company aims to achieve growth by leveraging its organized operational structure in a largely unorganized industry. It utilizes its Surat SEZ facility for manufacturing and its Hong Kong subsidiary, KIL International Limited, to facilitate international trade and capture robust industry demand.

Products & Services

The company sells polished diamonds and diamond-studded jewellery to its customers.

Brand Portfolio

Kanani Industries Limited.

Strategic Alliances

The company operates through a wholly-owned subsidiary, KIL International Limited, in Hong Kong, which is consolidated for financial reporting.

🌍 External Factors

Industry Trends

The Gems and Jewellery industry is experiencing robust growth, driven by developments in other sectors and a gradual shift toward more organized business practices, which the company aims to exploit.

Competitive Landscape

Intense competition from unorganized players who dominate the Indian Gems and Jewellery industry and operate with lower compliance costs.

Competitive Moat

The moat is based on an organized operational model in an unorganized sector. However, this advantage is fragile due to thin 1.91% margins and high dependency on a few customers and suppliers.

Macro Economic Sensitivity

Highly sensitive to global economic conditions affecting demand for luxury goods and changes in government regulations or tax laws in India and overseas markets.

Geopolitical Risks

Exposed to international trade barriers and regulatory changes in Hong Kong and India, which could disrupt the flow of polished diamonds and jewellery.

⚖️ Regulatory & Governance

Industry Regulations

Operations are governed by the Special Economic Zone Rules, 2006, due to the factory's location in the Surat SEZ. Compliance with these rules is essential for maintaining tax benefits and export status.

⚠️ Risk Analysis

Key Uncertainties

The primary business risks include the 98.9% decline in standalone revenue, thin 1.91% operating margins, and a significant drop in the interest coverage ratio to 1.39, which threatens debt servicing capability.

Geographic Concentration Risk

High geographical concentration at the standalone level, with significant reliance on the Hong Kong market via its subsidiary.

Third Party Dependencies

High dependency on a limited number of suppliers and customers for polished diamonds, creating significant counterparty risk.

Credit & Counterparty Risk

Stretched liquidity position and moderate financial profile; the Debtors Turnover Ratio was 85.81% in FY 2023-24, indicating potential challenges in receivable collections.