Sky Gold & Diamonds: The B2B Backbone Powering India’s $145B Jewellery Milestone

Synopsis: Everyone knows CaratLane, Kalyan Jewellers, Malabar Gold & Diamonds, Senco Gold, and the other glittering giants dominating India’s branded jewellery market. Yet behind their radiant sparkle lies an unsung manufacturing powerhouse you probably haven’t heard of: Sky Gold. This editorial delves into Sky Gold’s explosive growth story, commanding valuation, lurking risks, and an unbreachable competitive moat.

Founded in 2008, Sky Gold has grown into a leading name in the casting jewellery industry. Built on nearly two decades of hands-on experience, the company combines skilled craftsmanship with large-scale manufacturing capabilities. Operating from a 130,000 square foot facility, Sky Gold has steadily evolved into a strong and reliable production platform, driven by innovation and execution.

Operating on a pure B2B model, Sky Gold partners with some of India’s leading jewellery retailers and large wholesalers, alongside reputed Indian and international corporates, and a vast network of distributors. Boasting an impressive annual capacity of 14.4 tonnes, its operations cater to surging global demand. Today, these pieces sparkle in over 2,000 retail outlets across India and more than 500 stores worldwide, underscoring Sky Gold’s enduring appeal and expansive footprint in the competitive jewellery market.

Sky Gold’s Moat 

Sky Gold’s competitive advantage rests on a tightly built moat of speed, scale, and execution rather than sheer output. In an industry defined by long lead times, the company delivers design-to-finish cycles in just 7-20 days, enabled by advanced 3D printing technology from Germany, Italy, and the US, and a 130,000 sq. ft. integrated facility in Navi Mumbai with a capacity of ~1,050 kg per month.

As India’s largest single-location jewellery manufacturer, Sky Gold combines this scale with depth, with over five decades of promoter experience and a 9+ lakh strong design library, continuously refreshed by an in-house R&D team tracking global fashion trends.

Its asset-light, design-led B2B model has fostered sticky partnerships with leading jewellers such as Malabar Gold & Diamonds, Kalyan Jewellers, GRT, Senco, and Joyalukkas, while recent additions, including Indriya (Aditya Birla Group), CaratLane (Tata Group), Reliance, and P.N. Gadgil, fuel further momentum. Growth is driven by both a steady ramp-up in orders from existing clients and incremental volumes from new partnerships. Importantly, client concentration remains disciplined, with the top three customers contributing ~25-27% of revenue and the top five ~30-32%, ensuring both stability and diversification.

The Explosive Growth Story

Sky Gold isn’t just expanding, it’s exploding. Over the past five years (FY21-FY25), PAT rocketed at a staggering 129.2% CAGR, leaping from Rs 5 crore to Rs 133 crore. EBITDA followed suit with 107.7% CAGR growth, from Rs 11 crore to Rs 196 crore, while revenue from operations surged 45.3% CAGR to Rs 3,548 crore from Rs 796 crore. 

The momentum rolls on, with H1FY26 revenue from operations reaching Rs 2,615.7 Crore (up 75.3% YoY), EBITDA at Rs 171.3 crore (up 125.2% YoY), whereas PAT grew by 90.9% YoY, reaching Rs 110.6 crore. 

The management is aiming for a Rs 5,400 crore revenue in FY26P, scaling to Rs 7,600 crore in FY27P, all while eyeing a strong 4.25% PAT margins (3.7% in FY25). Guidance projects capacity utilisation climbing to ~900 kg/month by FY27 from 544 kg in Q2FY26, driving ROCE beyond 25%. With the current 1,050 kg/month capacity offering vast headroom, positioning Sky Gold as the breakout force fueling India’s jewellery boom.

Strategic Growth Accelerators

Sky Gold is aggressively scaling through shrewd acquisitions, category expansions, and bold infrastructure plays. The Speed Bangle Pvt. Ltd. acquisition unlocks lightweight Italian bangles via a 100% advance-gold model with tax incentives. While a majority stake acquisition in Shri Rishab Gold, a Mumbai mangalsutra specialist, supercharges Sky Gold’s dominance in the segment via its Star Mangalsutra arm. Collaborations like Senco’s 9kt gold launch target value-conscious Gen Z, alongside expansions into studded 18kt/diamond jewellery, chains, and bangles.    

The Dubai office targets the Middle East as a strategic growth market, bolstering total exports, which currently account for 10% of Q2FY26 revenue, targeting 10-12% next quarter, and scaling to 15-20% by March 2027. ERP upgrades simultaneously sharpen productivity tracking. Meanwhile, organised jewellery retail’s seismic transition unleashes tailwinds for Sky Gold’s mere <0.5% market share, with gross margins doubling from 3% (FY20) to 7%+ through scale, design premiums, and efficiency gains.

Sky Gold’s strategic capex play centres on its 10,500 sq.m Navi Mumbai land, with potential to scale up to ~4.5 tonnes per month capacity at peak utilisation. Construction is scheduled to commence in April 2026 and will span three years, with full operations targeted by end-2028, coinciding with the exhaustion of the company’s current 1.2-tonne capacity. Funding is structured with Rs 150 crore allocated towards construction, to be met through annual internal accruals of Rs 50 crore supported by incremental PAT from acquisitions, while an additional Rs 100 crore of term loans will be deployed in tranches towards machinery, furniture, and fixtures as floors are commissioned progressively.

Operating Cashflow Strain

Despite remarkable growth, the company grapples with persistent negative operating cash flows, posing a key risk to its financial stability. In FY25, operating cash flow plunged to Rs -273 crore from Rs -158 crore in FY24, primarily driven by elevated inventory levels that swelled to 29% of total assets (down from 45% in FY24). This inventory buildup has forced heavy reliance on short-term borrowings, which jumped to Rs 588 crore in FY25 (from Rs 301 crore prior), comprising a staggering 97% of total debt and exposing the firm to interest rate volatility and refinancing pressures.

Tackling Working Capital Risks Through Strategic Initiatives

To mitigate these vulnerabilities, the company is aggressively optimising its working capital cycle. It has secured Gold Metal Loan (GML) limits from three existing private banks, reinitiating the program in Q2 FY26. These GMLs offer lower-cost financing to replace high-cost working capital facilities, while providing gold manufacturers with upfront raw materials to streamline production and cash cycles, though rollout has faced delays from documentation and supply hurdles. Complementing this, the firm is aiming to reduce receivables and inventory via advanced gold contracts using customer-supplied gold. These efforts reduced working capital days by 7 in September ’25 versus March ’25, with further gains in Q2 FY26 over the prior year.

Path to Cash Flow Positivity and Leverage Improvement

Signs of progress are evident in strengthening leverage metrics: interest coverage rose to 4.9x in FY25 (from 3.6x), and debt-to-equity improved to 0.9x (from 1.3x). Targeting a reduction in working capital intensity to 55-57 days by FY27. The company expects to turn operational cash flow positive shortly after March 2027. It anticipates a temporary operating cash flow shortfall of Rs 70-100 crore by FY27, which has already been funded through pre-raised debt. This disciplined strategy underscores a commitment to prudent finance management, operational agility, and sustainable growth.

Understanding the Valuation

Sky Gold & Diamonds presents a reasonably valued opportunity, with its TTM P/E ratio of 26-29x mirroring the sector average of ~26.9x and trading below its 3-year historical median of ~34.8x. Supporting this view, the stock’s P/B stands at 4.98x versus a 3-year median of 11x, alongside a P/S multiple of 1.11x that reflects compression across core metrics. On a forward-looking basis, a PEG ratio of ~0.45x, driven by anticipated FY26 net earnings growth of 59-62%, further bolsters the case for undervaluation amid robust expansion potential.

Opinion and Outlook

As India’s jewellery retail market hurtles toward a $145 billion milestone by FY28, powered by rising incomes and a seismic shift to organized players, whose share has ballooned from 10% in FY21 to a projected 43% (FY28), Sky Gold & Diamonds stands poised at the epicenter of this gold rush. The organized sector’s explosive trajectory, from $19.2 billion in FY20 to $82.65 billion by FY28 at a 20% CAGR, amplifies tailwinds for this B2B manufacturer, which holds just a sliver (<0.5%) of the market yet commands outsized growth levers.

Even amid a gold price surge, Indian consumers prove resilient, pivoting seamlessly to lightweight designs, 9kt/14kt options, and diamond studs without flinching on festive spending, a testament to enduring demand that Sky Gold is uniquely wired to capture through its design agility and client embeds.

That said, the path isn’t flawless: persistent negative operating cash flows linger as a yellow flag, even as the company’s GML rollout with private banks, customer-gold contracts, and working capital tweaks (already trimming days by 7 in recent quarters) pave the way for positivity post-FY27. Ambitious revenue targets and profit surges dazzle, but rivals eyeing the boom could erode moat edges if execution falters. Adding another caution, Managing Director Mangesh Chauhan’s role on the audit committee, while not a regulatory breach, raises eyebrows over perceived independence, as the panel oversees financial reporting and auditor picks, where the MD wields direct influence.

Sky Gold’s attractive valuations, paired with bold revenue and profit targets, position it as a smart bet on India’s jewellery boom. Yet prudent investors must eye the cash flow turnaround and governance nuances closely: this high-risk play promises outsized rewards for those wagering on organised retail’s relentless rise.

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