Deepa Jewellers IPO

It delivered a strong Return on Equity (RoE) of 56.45% and Return on Capital Employed (RoCE) of 52.08% in FY26. These numbers are well ahead of its listed peers, where the highest RoE among comparable companies is just 37.34%. In simple words, the company is doing a very good job of turning the money invested in the business into profits.

Its inventory holding period fell to just 18 days in FY26. That is remarkably quick compared with listed peers such as RBZ Jewellers at 235 days, Sky Gold at 34 days, and Khazanchi Jewellers at 63 days. Faster inventory turnover means less cash stays stuck in unsold jewellery, which is a positive for the business.

The company has also reduced its dependence on borrowing as it has grown. Its debt-to-equity ratio, which shows how much debt it carries compared with shareholders’ money, improved from 0.84 in FY24 to 0.47 in FY26. Lower debt makes the balance sheet healthier and gives the company more room to handle a slowdown or raise loans at better terms in the future.

Operating revenue grew at an impressive 37.13% CAGR (average annual growth rate) from ₹1,024.57 crore in FY24 to ₹1,926.68 crore in FY26. At the same time, net profit rose to ₹104.79 crore. That shows the company has been able to keep up with strong demand while scaling up the business efficiently.

Its B2B customer network reached 373 clients as of July 31, 2026. More importantly, many of these customers have stayed with the company for years - 36 clients have been associated with it for more than 7 years, while another 86 have been with it for 5 to 7 years. This repeat business gives the company a more stable and predictable revenue base.

The company has carved out a strong position in specialised, high-value jewellery. In FY26, its traditional waist belt, or vaddanam, generated ₹806.24 crore, accounting for 41.85% of operating revenue. This focus on a specialised product helps it become a preferred supplier for major retail chains and gives it some protection from more generic competition.

The company depends heavily on a small group of customers. Its top 10 customers contributed 64.67% of operating revenue in FY26, or ₹1,246.03 crore. So, losing even one major retail partner, or seeing a sharp drop in their orders, could have a big impact on revenue and cash flows.

The company is also heavily dependent on a handful of suppliers for gold bullion. Its top 10 suppliers made up 91.81% of total raw material purchases in FY26, worth ₹1,602.19 crore. Any supply dispute, shortage of credit, or delivery delay could quickly disrupt its production.

The company depends entirely on third-party karigars (traditional artisans) to make its jewellery. Of its 41 karigars, 12 currently work without formal written agreements and rely mainly on long-standing business relationships. If any of them suddenly stop working with the company, it could lose production capacity and face delays in completing customer orders.

The company does not register its proprietary designs under the Designs Act, 2000. Since the jewellery is made by outside artisans who are not exclusive to the company, there is a risk that its designs could be shared, copied, or sold at lower prices by competitors. Over time, this could weaken its premium positioning.

The business needs to pay upfront for large quantities of gold, while its customers often pay only after a credit period. This means a lot of cash gets tied up in the business. Its trade receivables rose to ₹252.36 crore in FY26, while total working capital requirements reached ₹344.02 crore, putting pressure on its liquidity.

Rapid growth in inventory and receivables pushed net operating cash flow into negative territory - ₹14.73 crore in FY26 and ₹9.86 crore in FY25. In other words, the business is profitable but still putting pressure on its cash position.