- Nityas Has Doubled Revenue, but Growth Is Becoming More Cash-Hungry
- The Business Is Growing Through B2B, While D2C Remains the Longer-Term Option
- Strong Margins and Returns Need to Be Read Alongside Cash Conversion
- The IPO Makes Working Capital the Most Important Metric to Watch
- Author's Take
Nityas Gems and Jewellery Limited has expanded at a pace that immediately stands out. Its operating revenue increased from ₹53.66 crore in FY24 to ₹96.85 crore in FY25 and then more than doubled to ₹202.89 crore in FY26. Profit after tax rose even faster, from ₹4.02 crore to ₹22.32 crore over the same period.
At first glance, that combination of accelerating revenue, improving margins and rising profits makes the company's growth story straightforward. But the more important question for investors is what Nityas has had to put into the business to produce that growth.
Its inventory reached ₹63.59 crore in FY26, trade receivables stood at ₹21.46 crore and operating cash flow remained negative at ₹14.73 crore. Net working capital days also climbed from 47 days in FY24 to 135 days in FY26. In simple terms, profits are growing rapidly, but an increasing amount of money is getting locked inside the business before those profits turn into cash.
That makes the Nityas IPO particularly interesting because ₹70 crore of the issue proceeds is proposed to be used for additional working capital. The IPO is therefore not just financing expansion. It is addressing one of the central financial requirements created by the company's existing growth model.
For readers still getting familiar with the structure of an IPO, the distinction between a fresh issue and an offer for sale can be useful. IPO types: fresh issue vs OFS explained
Nityas Has Doubled Revenue, but Growth Is Becoming More Cash-Hungry
Nityas designs and manufactures gold jewellery studded with lab-grown diamonds. Unlike mined diamonds, lab-grown diamonds are created in controlled laboratory environments but have broadly the same physical and chemical properties. Their biggest commercial advantage is price: according to the company's disclosures, they can cost around 60% to 80% less than natural diamonds.
That affordability has allowed companies such as Nityas to position diamond jewellery beyond weddings and high-value occasions and increasingly towards lightweight and everyday designs.
Nityas appears to have captured part of this shift effectively. Revenue increased nearly four times between FY24 and FY26. EBITDA, or earnings before interest, tax, depreciation and amortisation, increased from ₹5.48 crore to ₹30.97 crore during the same period. More importantly, profitability did not get diluted as sales expanded. Its EBITDA margin increased from 10.21% in FY24 to 13.32% in FY25 and 15.27% in FY26. PAT margin improved from 7.50% to 11.00%. This suggests that increasing scale has helped the company spread manufacturing and overhead expenses across a larger revenue base.
But profitability only tells one side of the story.
Jewellery businesses need capital before they make a sale. Nityas needs to purchase gold and lab-grown diamonds, manufacture jewellery, hold designs as inventory and often provide credit to B2B customers before receiving payment. As the company has expanded, this funding requirement has increased sharply.
Its standalone working capital requirement rose from ₹6.77 crore in FY24 to ₹25.11 crore in FY25 and ₹44.95 crore in FY26. For FY27, the requirement has been estimated at ₹110.31 crore. That explains why ₹70 crore of IPO proceeds has been earmarked for incremental working capital. This distinction matters. Rapid sales growth is attractive only when the business can eventually turn those sales into cash without requiring disproportionately larger amounts of fresh funding every year.
For Nityas, one of the most important post-IPO indicators will therefore be whether revenue continues growing faster than working capital requirements.
The Business Is Growing Through B2B, While D2C Remains the Longer-Term Option
Another important feature of Nityas is that it currently looks much more like a jewellery manufacturer and supplier than a consumer retail brand. In FY26, the company generated ₹202.89 crore of operating revenue. Of this, ₹193.92 crore, or 95.58%, came from the business-to-business segment.
Standalone retailers contributed ₹86.74 crore, wholesalers ₹57.33 crore and retail chains ₹49.85 crore.Its direct-to-consumer business through Ayaani contributed only ₹8.81 crore, representing 4.34% of operating revenue. This distinction affects how investors should interpret the business. The B2B model gives Nityas the ability to grow relatively quickly because it can sell through established jewellery retailers rather than building a large store network itself. The company already serves businesses such as GIVA, Palmonas, ONYA and Ladia Diamonds and operates across 18 states and two union territories.
Its Surat manufacturing facility also gives it direct control over production. The 7,000-square-foot plant has annual production capacity of 360 kilograms and is supported by 122 skilled craftsmen and 29 designers. Its design catalogue has grown from roughly 3,000 designs in FY23 to more than 32,000 by August 2026. That design depth can be particularly valuable in jewellery, where retailers need to refresh collections frequently. However, the B2B model also introduces concentration risk. Nityas' largest customer represented 12.98% of FY26 operating revenue. Its top five customers contributed 40.02% while the top ten accounted for 55.49%. In other words, more than half of revenue came from just ten customers.
These sales are also not supported by long-term binding customer contracts according to the document. That means strong historical revenue growth does not automatically guarantee the same order flow in subsequent years. Ayaani could eventually change the economics of the business if it becomes a meaningful consumer brand.
Selling directly to customers can give jewellery companies greater influence over pricing, customer experience and product positioning. Nityas can also use information from its own stores and online channels to understand consumer preferences and feed those insights back into its B2B design process but investors should separate what Ayaani could become from what Nityas currently is at just over 4% of FY26 revenue, D2C is presently too small to define the financial profile of the company. For now, B2B customer retention and expansion remain much more important.
Strong Margins and Returns Need to Be Read Alongside Cash Conversion
On several accounting metrics, Nityas compares favourably with the listed peer group provided in the company's disclosures. Its FY26 EBITDA margin was 15.27%, compared with 8.11% for Golkunda Diamonds & Jewellery and 7.25% for Renaissance Global, although Goldiam International remained substantially ahead at 25.46%.
Nityas also reported a 43.75% return on equity and 42.93% return on capital employed. ROE measures how much profit a company generates relative to shareholders' money while ROCE measures the return generated from the broader capital employed in the business. These numbers appear strong relative to the peer set.
However, investors should be careful about looking at these return ratios in isolation. Nityas' equity base expanded significantly from ₹5.33 crore in FY24 to ₹79.43 crore in FY26. As a result, ROE declined from 122.44% to 43.75% even though profits increased. This is not necessarily negative. It simply shows that the company now has substantially more shareholder capital supporting the business.
Debt-to-equity also improved from 0.69 times in FY24 to 0.29 times in FY26, indicating that financial leverage has reduced. The bigger financial question is cash generation. Operating cash flow was negative ₹1.05 crore in FY24, negative ₹10.05 crore in FY25 and negative ₹14.73 crore in FY26. That means accounting profit and cash generated from day-to-day operations have been moving in different directions.
One major reason is inventory.
Nityas had ₹63.59 crore of inventory in FY26. Jewellery companies naturally need meaningful inventory, but higher inventory increases the amount of capital locked inside the business. The company's working capital cycle reached 135 days compared with 112 days for Golkunda, although it remained below Goldiam's 290 days and Renaissance Global's 216 days. The important test after the IPO will therefore not simply be whether profits continue increasing. Investors should watch whether operating cash flow gradually moves closer to reported profit and whether working capital days stabilise as the company becomes larger.
If that happens, it would suggest the business is becoming financially more self-sustaining. If working capital continues rising significantly faster than revenue, the company could remain dependent on regular infusions of capital despite reporting strong earnings growth.
The IPO Makes Working Capital the Most Important Metric to Watch
The IPO consists entirely of newly issued shares rather than an offer for sale by existing shareholders. This means the money raised is going into the company rather than being paid to selling shareholders.
Of the net proceeds, ₹70 crore is proposed to fund incremental working capital requirements in FY27. The remaining amount can be used for general corporate purposes within regulatory limits. That makes the use of proceeds particularly relevant to understanding the IPO.
Nityas is not primarily raising capital to build another major manufacturing facility. In fact, its existing Surat plant was operating at just 45.21% capacity utilisation in FY26 against installed capacity of 360 kilograms. This suggests that physical manufacturing capacity itself may not yet be the immediate bottleneck. Cash availability appears to be the more pressing constraint. There are also other areas investors should monitor. Supplier concentration is substantial. The top ten suppliers accounted for 86.16% of FY26 purchases while the largest supplier alone represented 55.11%.
Gold is particularly important because it accounted for 72.33% of total purchases. The company does not have a formal mechanism to hedge gold price fluctuations according to the document. That creates exposure to changes in raw-material costs, especially if prices rise before the company can pass them through to customers. Geographic diversification is limited as well. India contributed 97.44% of FY26 operating revenue while overseas markets represented only 2.56%. The top five Indian states generated approximately 85% of revenue.
This concentration means Nityas' near-term trajectory remains closely tied to Indian jewellery demand rather than global expansion. The more useful framework is to watch whether the company can convert a growing market opportunity into stronger cash economics. Revenue growth has already been demonstrated. Margin expansion has already been demonstrated. The next stage is showing that larger scale can produce better cash conversion without continuously stretching working capital.
For investors evaluating Nityas after the IPO, four numbers may therefore matter more than headline revenue growth: operating cash flow, working capital days, inventory growth and customer concentration. Together, these will show whether Nityas is simply becoming a larger jewellery company or whether it is becoming a financially stronger one as well.
Author's Take
Nityas has delivered the kind of revenue and profit growth that naturally attracts attention, especially as lab-grown diamond jewellery becomes a larger part of India's affordable jewellery market. Improving margins, a growing design catalogue and relationships with established retailers show that the company has been able to scale its B2B model effectively.
At the same time, the financial picture suggests that the next stage of growth may be more demanding than the last. Operating cash flow has remained negative, working capital days have increased significantly and a large part of the IPO proceeds is being directed towards funding day-to-day business requirements rather than expanding manufacturing capacity.
That does not take away from the growth already achieved, but it changes what investors should focus on next. The key question is no longer simply whether Nityas can grow revenue. It is whether that growth can gradually require less incremental cash for every additional rupee of business generated. The company's D2C brand Ayaani could also become an interesting part of the story over time, but at its current revenue contribution, it is better viewed as an emerging opportunity rather than a major earnings driver.
Overall, Nityas enters the IPO with strong reported growth and improving profitability, while cash conversion remains the important counterbalance. The next few reporting periods should offer a clearer picture of whether IPO-funded working capital helps the company translate its rapid expansion into a more self-sustaining financial model.
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