| RBZ Jewellers Limited | ||||||
| Rating outlook revised to 'Positive'; Ratings Reaffirmed; Rated amount enhanced for Bank Debt | ||||||
| Rating Action | ||||||
| ||||||
| Note: None of the Directors on Crisil Ratings Limited’s Board are members of rating committee and thus do not participate in discussion or assignment of any ratings. The Board of Directors also does not discuss any ratings at its meetings. | ||||||
| 1 crore = 10 million | ||||||
| Refer to Annexure for Details of Instruments & Bank Facilities |
Detailed Rationale Crisil Ratings has revised its outlook on the long term bank facilities of RBZ Jewellers Ltd (RBZJL) to ‘Positive’ from ‘Stable’ while reaffirming the rating at ‘Crisil BBB+’. The short term rating has been reaffirmed at ‘Crisil A2’.
The revision in outlook reflects the expectation of sustained improvement in the business risk profile, marked by an improving scale of operations. The company is expanding its retail presence through launch of four new showrooms. With revenue of Rs 447 crore recorded till December 2025, the company is expected to record 15-20% growth in revenue for fiscal 2026. Revenue is further likely to grow by 30-35% in fiscal 2027, driven by new store openings. Operating margin of 15.82% was reported for the first nine months of fiscal 2026. Sustained growth in revenue, backed by volume growth across segments, and steady operating margin of 11-12% per fiscal, amid price volatility, remains a key rating sensitivity factor.
The financial risk profile continues to be healthy, aided by limited reliance on external debt and credit from the suppliers. Liquidity should be comfortable, with sufficient cash accrual against moderate debt obligation, and the available cushion in bank limit.
The ratings continue to reflect the extensive experience of the promoters in the jewellery industry. These strengths are partially offset by the large working capital requirement, susceptibility of operating profitability to volatility in gold prices, regulatory changes, intense competition, geographic and customer concentration in revenue, and timely ramp up of operations for new showrooms. |
Analytical Approach Crisil Ratings has considered the standalone business and financial risk profiles of RBZJL. |
Key Rating Drivers - Strengths Extensive experience of the promoters: Mr Rajendra Zaveri and Mr Harit Zaveri are the promoters of the company. While Mr Rajendra has been engaged in the jewellery industry for over three decades, Mr Harit has about a decade of experience. The promoters’ expertise, strong understanding of market dynamics and healthy relationships with customers and suppliers, will continue to support the business. Having its own manufacturing unit enables the company to control cost and report a higher margin. Further, the company caters to demand from 72 cities across 19 states, via job-work and business-to-business (B2B) route.
Revenue has grown at a compound annual growth rate of 28% over the three fiscals through March 2025, to Rs 530 crore. Growth in fiscal 2026 will be driven by higher realisations, due to sharp increase in gold prices, partially offset by moderation in volume. Revenue performance will be driven by the retail business going forward, as the company plans to open four new showrooms in Gujarat in fiscal 2027.
Healthy financial risk profile: Networth stood at Rs 242.9 crore as on March 31, 2025 (Rs 205.3 crore a year before), driven by healthy profitability. Gearing and total outside liabilities to adjusted networth (TOL/ANW) ratios were low at 0.36 time and 0.44 time, respectively, as on the same date. Debt protection metrics were robust, as reflected in interest coverage and net cash accrual to total debt ratios of 6.54 times and 0.46 time, respectively, in fiscal 2025. The financial risk profile is expected to remain healthy, despite expansion plans, with gearing likely to peak at 0.85 time as on March 31, 2027. |
Key Rating Drivers - Weaknesses Large working capital requirement: Gross current assets stood at 217 days as on March 31, 2025, driven by inventory of over 229 days. The company has three business segments – business-to-customer (B2C), B2B and job-work – of which B2C has the largest working capital requirement. Additionally, inventory required for the job-work segment does not translate into days as only job-work charges are booked as revenue. Hence, maintaining a healthy mix of all three segments for controlling working capital and improving operating efficiency will be critical. Any sharp increase in working capital requirement with planned expansion impacting liquidity will remain monitorable.
Susceptibility of operating profitability to volatility in gold prices, regulatory changes, intense competition and geographic concentration: Intense competition may continue to constrain scalability, pricing power and profitability. Operating performance will remain susceptible to volatility in gold prices and regulatory changes. Moreover, unlike some peers who have strong presence in domestic and international markets, RBZJL is a regional player in the B2C category. The company has only one retail outlet and is planning to expand its reach through four new showrooms.
Timely ramp up of operations for the new showroom: The company plans to open four new showrooms in fiscal 2027. Two large showrooms, one each in Surat and Rajkot, will be launched in the second quarter of fiscal 2027. The remaining two will be smaller showrooms in east Ahmedabad, likely to be launched latter part of the year. Contribution from these showrooms will remain key monitorable, considering the huge investment and working capital requirement in the retail jewellery business. |
Liquidity Adequate Bank limit utilisation was moderate, averaging around 83% for the 12 months ended November 30, 2025. Expected cash accrual of Rs 55-70 crore should suffice to cover the term debt obligation of Rs 1-2 crore over the medium term. Current ratio was healthy at 3.15 times on March 31, 2025. Low gearing and moderate networth offer financial flexibility to withstand adverse conditions or downturn in the business. |
Outlook Positive Crisil Ratings believes that the business risk profile will continue to improve over the medium term driven by better volumes, sustained profitability and controlled working capital cycle. |
Rating sensitivity factors Upward factors
Downward factors
|
About the Company RBZJL was incorporated as a private limited company in 2008 and reconstituted as a public limited company on March 20, 2023. Promoted by Mr Rajendra Zaveri and his son, Mr Harit Zaveri, the company manufacturers gold jewellery. It also processes and supplies gold jewellery on jobwork basis to national retailers. It has a retail showroom under the Harit Zaveri brand and a manufacturing unit in Ahmedabad, Gujarat. |
Key Financial Indicators
|
Any other information: Not Applicable |
Note on complexity levels of the rated instrument: |
Annexure - Details of Instrument(s)
& - Includes sublimit of INR 21 crore for WCDL
^ - Includes sublimit of INR 32.58 crore for WCDL
% - Includes sublimit of INR 15 crore for WCDL
$ - Includes sublimit of INR 30 crore for WCDL
|
| Annexure - Rating History for last 3 Years | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| All amounts are in Rs.Cr. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Annexure - Details of Bank Lenders & Facilities | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Criteria Details
|