Detailed Rationale Due to inadequate information, Crisil Ratings, in line with guidelines issued by the Securities Exchange Board of India, had migrated its rating on the long-term bank facility of Goldkart Jewels Ltd (GKJL) to ‘Crisil B/Stable issuer not cooperating'. However, the management has subsequently started sharing the requisite information to carry out a comprehensive review of the rating. Consequently, Crisil Ratings is migrating the rating on the long-term bank facility to ‘Crisil BB/Stable’.
The rating reflects the average scale of operations and lower profitability, working capital intensive operations and exposure to geographical concentration in revenue. These weaknesses are partially offset by the extensive experience of the promoters in retailing of gold, silver and diamond jewellery, and the moderate financial risk profile of the company. |
Analytical Approach Crisil Ratings has evaluated the standalone business and financial risk profiles of GKJL. |
Key Rating Drivers & Detailed Description Strengths: Extensive experience of the promoters: The two-decade-long experience of the promoters in retailing of gold, silver and diamond jewellery, has enabled them to gain a strong understanding of market dynamics and maintain healthy relationships with suppliers and customers.
Average scale of operations and moderate profitability: Intense competition in the jewellery retailing business limits the scale of operations, as reflected in turnover of Rs 68 crore in fiscal 2024. The company faces competition from several small and independent players and few large entities, amid low entry barriers. Limited value addition has kept the operating margin low in the range of 2-4% over the three years through March 2024. The company has achieved revenue of Rs 34.50 crore in the first half of fiscal 2025. Revenue has been in the range of Rs 55-80 crore for the four fiscals through March 2024.
Weaknesses: Susceptibility to geographical concentration in revenue: Although the entity has been engaged in the jewellery retail business for over two decades, all its stores are in Gujarat. Gold buying is a localised activity, and accrual depends on level of economic activity in the region. With concentration in geographic presence, the company remains exposed to volatility in demand because of local factors, and competition from other well-known local brands.
Working capital-intensive operations: Gross current assets (GCAs) stood at 199.5 days as on March 31, 2024, and have been high in the range of 199.5-224 days over the past three fiscals. The large working capital requirement arises from the large receivables and inventory. Given the nature of business, the company holds large work-in-process and inventory.
Moderate financial risk profile: Capital structure remains comfortable, aided by limited reliance on external debt, as reflected in gearing and total outside liabilities to adjusted networth (TOL/ANW) ratios estimated to be less than 0.5 time and 0.3 time, respectively, as on March 31,2025. Debt protection metrics are also aided by moderately healthy profitability, despite leverage. Interest coverage and net cash accrual to total debt ratios are estimated to be around 4 times and 0.3 time, respectively, for fiscal 2025, and are likely to remain at similar levels over the medium term. |
Liquidity: Stretched Bank limit utilisation was high, averaging around 97.39% for the 12 months ended March 31, 2025. Expected cash accrual of over Rs 2 crore should suffice to cover the term debt obligation of Rs 0.6-0.8 crore over the medium term. Current ratio was healthy at 2.64 times as on March 31, 2024.
The company also held liquid investments worth around Rs 14.27 crore in shares, debentures and mutual funds as on September 30, 2024. Low gearing and moderate networth offer financial flexibility to withstand adverse conditions or downturn in the business |
Outlook: Stable Crisil Ratings believes GKJL will continue to benefit from its longstanding relationships with principals and extensive experience of its management, which should help mitigate inherent risk in the trading business. |
Rating sensitivity factors Upward factors
Downward factors
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About the Company Ahmedabad (Gujarat)-based GKJL, formerly known as Sona Hi Sona Jewellers (Gujarat) Ltd, is a part of the Laxmi Group. It was formed as a proprietary concern of Mr Vijay Shah and his family in 2002 and converted into a private limited company in 2010. Subsequently, it was reconstituted as a public limited company in 2017 and renamed as Sona Hi Sona Jewellers (Gujarat) Ltd. Thereafter, in October 2023, the company was renamed as Goldkart Jewels Ltd. The company undertakes job-work and trades in gold jewellery. Its showroom is located in Ahmedabad.
GKJL’s shares are listed on the platform for small and medium enterprises under the National Stock Exchange (NSE).
Operations are managed by Mr Vijay Chinubhai Shah and Mrs Alpa Vijay Shah. |
Key Financial Indicators
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Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instruments
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Annexure - Rating History for last 3 Years
| Current | 2025 (History) | 2024 | 2023 | 2022 | Start of 2022 | |||||||
| Instrument | Type | Outstanding Amount | Rating | Date | Rating | Date | Rating | Date | Rating | Date | Rating | Rating |
| Fund Based Facilities | LT | 13 | Crisil BB/Stable | -- | 29-11-24 | Crisil B /Stable(Issuer Not Cooperating)* | 28-09-23 | Crisil B /Stable(Issuer Not Cooperating)* | 30-07-22 | Crisil B /Stable(Issuer Not Cooperating)* | Crisil B /Stable(Issuer Not Cooperating)* | |
All amounts are in Rs.Cr.
* - Issuer did not cooperate; based on best-available information
| Annexure - Details of Bank Lenders & Facilities | ||||||
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Criteria Details
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