Shankesh Jewellers

Strong historical financial results

The company has demonstrated robust financial performance with revenue growing from ₹10,617.83 million in Fiscal 2024 to ₹16,307.87 million in Fiscal 2026, EBITDA increasing from ₹285.99 million to ₹1,579.00 million, and profit after tax rising from ₹128.16 million to ₹1,066.81 million over the same period.

Long Term Relation with local Jobworkers for handling custom hand-crafted gold jewellery making process

The company collaborates with 66 Jobworkers, majority in Mumbai, Maharashtra, maintaining long-term stable relationships with consistent engagement of 90 job workers in Fiscal 2024, 87 in Fiscal 2025 and 72 in Fiscal 2026, with low attrition rates.

Asset-Light business model

The company operates an asset-light model leveraging Karigars to hand craft jewellery according to client requirements, enabling better inventory management, efficient demand fluctuation handling, reduced capital expenditure requirements, and mitigation of operational risks.

Wide product range in hand crafted gold jewellery

The company supplies comprehensive range of high-quality hand-crafted gold jewellery including Antique, Calcutta, Gheru, Semi Antique, Temple, and Yellow/Rhodium/Rose Gold categories with products like Bangles, Bridal jewellery, Chokers, Jhumkas, Necklace sets, and customized pieces under one roof.

Commitment to Quality and Customer Satisfaction

The company exclusively deals in BIS Hallmark certified jewellery, conducts regular quality checks, and maintains limited product returns of 7.22%, 5.23%, and 4.36% of revenue in Fiscals 2026, 2025, and 2024 respectively, primarily from customer preference adjustments rather than quality issues.

Established relations with corporate and non- corporate jewellery clients

The company has fostered strong relationships with corporate clients like Joyalukkas India Limited, Kalyan Jewellers India Limited, and non-corporate clients, with revenue from top 10 clients representing 39.56%, 30.48%, and 30.62% of operations in Fiscals 2026, 2025, and 2024 respectively.

Experienced Promoters and management team with execution capabilities

The company is led by Kantilal Kheemraj Jain with over three decades of experience since 1992, along with Manoj Kantilal Jain and Mahavir Kantilal Jain bringing around two decades of combined experience, with Promoters collectively holding 74.25% of pre-issue equity share capital.

Established marketing setup

The company has built strong customer relationships through experienced Sales & Marketing team operating under direct supervision of Directors Mahavir Kantilal Jain and Manoj Kantilal Jain, with reputation for timely delivery, design quality of 22 karat and 18 karat jewellery helping retain and expand client base.

Negative Cash Flow from Operating Activities

The company experienced negative net cash flow from operating activities of ₹231.05 million in Fiscal 2025, primarily due to increased working capital deployment toward trade receivables and inventories. This cash flow volatility could have a material adverse effect on the company's business, prospects, financial condition, and results of operations.

Significant Indebtedness and Restrictive Covenants

As of March 31, 2026, the company had total outstanding borrowings of ₹1,672.96 million with restrictive covenants that limit operational flexibility. The debt-to-equity ratio was 0.81 in Fiscal 2026, and failure to comply with financial ratios could trigger cross-default provisions and accelerate repayment obligations.

Dependence on Third-Party Jobworkers and Skilled Karigars

The company is entirely dependent on third-party Jobworkers for manufacturing all products, working with 72 Jobworkers during Fiscal 2026. Any disruption in operations or shortage of skilled Karigars in Maharashtra could materially impact manufacturing and business operations.

High Customer Concentration Risk

The company's top 10 customers contributed 39.56%, 30.48%, and 30.62% of revenue in Fiscals 2026, 2025, and 2024 respectively. The company operates without long-term contracts or exclusivity arrangements, making it vulnerable to customer loss or reduced demand.

Geographic Revenue Concentration

A significant portion of revenue is concentrated in the top 5 states (Tamil Nadu, Maharashtra, Uttar Pradesh, Bihar, and Odisha), contributing 67.84% of revenue in Fiscal 2026. This concentration exposes the company to regional economic, cultural, and geopolitical risks.

Gold Price Volatility Impact

The company's inventory value and profitability are significantly affected by gold price fluctuations. In 2025, domestic gold prices reached record-high levels, creating uncertainty in pricing and procurement decisions across the jewellery industry, potentially affecting sales volumes and margins.

Quality Control and Product Returns

The company experienced product returns of ₹1,177.56 million (7.22% of revenue), ₹733.98 million (5.23%), and ₹462.72 million (4.36%) in Fiscals 2026, 2025, and 2024 respectively. Quality defects could result in order cancellations, customer loss, and damage to reputation.

High Working Capital Requirements

The company requires significant working capital, with inventory of ₹2,399.58 million as of Fiscal 2026 (62.06% of current assets). The company intends to utilize ₹380.00 million from Net Proceeds for working capital, and inability to meet these requirements could adversely impact operations.

Security Risks in High-Value Commodity Operations

Operating in the high-value gold jewellery sector exposes the company to security risks including potential theft, loss, or damage during transit and delivery. While insured up to ₹4,762.50 million, any losses exceeding coverage limits could materially affect financial condition.

Discretionary Nature of Jewellery Purchases

Jewellery purchases are discretionary and perceived as luxury items, making the business vulnerable to economic downturns, changes in consumer spending patterns, and macroeconomic conditions that could significantly reduce demand during adverse economic conditions.