Rating Rationale
March 27, 2025 | Mumbai
RBZ Jewellers Limited
Ratings upgraded to 'Crisil BBB+/Stable/Crisil A2'
 
Rating Action
Total Bank Loan Facilities RatedRs.150 Crore
Long Term RatingCrisil BBB+/Stable (Upgraded from 'Crisil BBB/Positive')
Short Term RatingCrisil A2 (Upgraded from 'Crisil A3+')
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 upgraded its ratings on the bank loan facilities of RBZ Jewellers Ltd (RBZ) to ‘Crisil BBB+/Stable/Crisil A2’ from ‘Crisil BBB/Positive/Crisil A3+’.

 

The upgrade factors in the expected improvement in the company’s market position, driven by planned expansion in its retail presence with new openings. Hence, operating revenue is expected to grow 30-40% during fiscal 2026. The operating margin remained healthy due to strong segmental mix from all three businesses, and is expected to remain 11-12% over the medium term. The working capital cycle will, however, remain stretched driven by large inventory requirement.

 

The financial risk profile is expected to remain strong with healthy capital structure and robust debt protection metrics. Liquidity is also expected to remain adequate with high expected cash accrual against moderate debt obligation. Bank limit utilisation is likely to remain moderate.

 

The ratings reflect the extensive experience of the promoters in the jewellery industry and healthy financial risk profile. These strengths are partially offset by large working capital requirement and susceptibility of operating profitability to volatility in gold prices, regulatory changes, intense competition and geographical and customer concentration in revenue.

Analytical Approach

Crisil Ratings has evaluated the standalone business and financial risk profiles of RBZ.

Key Rating Drivers & Detailed Description

Strengths:

  • Extensive experience of the promoters: The company is promoted by Mr Rajendrakumar Zaveri and his son, Mr Harit Zaveri. While Mr Rajendrakumar Zaveri has more than three decades of experience, his son has about a decade of experience in the jewellery industry. Expertise of the promoters, their strong understanding of market dynamics and healthy relationships with customers and suppliers should continue to support the business. The company has its own manufacturing set-up, resulting in better control over costs and increasing profit margin. The company supplies products to 72 cities across 19 states in India through jobwork and the business-to-business (B2B) route. Revenue has increased at a compound annual growth rate of 45% in the past three fiscals, to Rs 327.4 crore in fiscal 2024, and is further estimated to grow by more than 50% in fiscal 2025. The revenue growth in fiscal 2026 will be mainly driven by increased retail business as the company is planning one new showroom in Surat, Gujarat, which is expected to operationalise in the third quarter of fiscal 2026; and another in Rajkot, Gujarat, which is expected to operationalise in the fourth quarter of fiscal 2026. The timely debt tie-up for these expansion will remain monitorable.

 

  • Healthy financial risk profile: Networth has improved after the Rs 100 crore initial public offering (IPO) in December 2023 to Rs 205.3 crore as on March 31, 2024. This reduced reliance on external borrowing, resulting in strong gearing of 0.34 time and total outside liabilities to adjusted networth (TOLANW) ratio of 0.37 time. The gearing and TOLANW ratio are estimated to remain comfortable at 0.33 time and 0.44 time, respectively, as on March 31, 2025. Despite the planned debt-funded capital expenditure, the peak gearing is expected at 0.75 time at the end of fiscal 2026. Debt protection metrics were also robust, with interest coverage and net cash accrual to total debt ratios of 4.9 times and 0.33 time, respectively, for fiscal 2024.

 

Weaknesses:

  • Large working capital requirement: Gross current assets were more than 282 days as on March 31, 2024, driven by sizeable inventory of over 283 days. The company has three business segments – business-to-customer (B2C), B2B and jobwork – of which B2C has the largest working capital requirement. Additionally, inventory required for the jobwork segment does not rightly translate into days as only jobwork charges have been booked as revenue and hence, the same resulted in large inventory with increase in jobwork business. The company also procured sizeable inventory in the last quarter of fiscal 2024 using IPO proceeds, which led to business growth in fiscal 2025. Hence, maintaining a healthy mix of all three segments for controlling working capital and improving overall operating efficiency will be monitorable.

 

  • Susceptibility of operating profitability to volatility in gold prices, regulatory changes, intense competition and geographical and customer concentration: The jewellery industry is highly fragmented and the consequent 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 a strong presence in the domestic and international markets, RBZ remains a regional player in the B2C category. The company has single-location retail operations though it is expanding its retail presence through two new retail showrooms.

Liquidity: Adequate

Bank limit utilisation was moderate at around 78% for the 12 months through February 2025. Expected Annual cash accrual of Rs 45-60 crore will be more than sufficient to meet yearly term debt obligation of Rs 3-4 crore, over the medium term; and the remaining accrual will cushion the liquidity. Current ratio was healthy at 3.39 times as on March 31, 2024. Strong gearing and moderate networth provide financial flexibility and cushion against any adverse condition or downturn in the business.

Outlook: Stable

Crisil Ratings believes RBZ will continue to benefit from the extensive experience of its promoters and established relationships with clients.

Rating sensitivity factors

Upward factors:

  • Steady increase in revenue driven by healthy volume growth of more than 25% with sustained operating margin, leading to cash accrual above Rs 45 crore
  • Improvement in the working capital cycle

 

Downward factors:

  • Further stretch in the working capital cycle impacting financial risk profile, including liquidity, with TOLANW ratio weakening to above 1.2 times
  • Sharp decline in net cash accrual on account of moderation in revenue and operating profit

About the Company

RBZ was incorporated as a private limited company in 2008 and reconstituted as a public limited company on February 25, 2023. Promoted by Mr Rajendra Zaveri and his son, Mr Harit Zaveri, the company is one of the organised manufacturers of gold jewellery in India. It also processes and supplies gold jewellery on jobwork basis to national retailers. RBZ operates its retail showroom under the Harit Zaveri brand and has a manufacturing unit in Ahmedabad, Gujarat.

Key Financial Indicators

As on / for the period ended March 31

Unit

2024

2023

Operating income

Rs crore

327.43

287.94

Reported profit after tax (PAT)

Rs crore

21.57

22.33

PAT margin

%

6.59

7.76

Adjusted debt/adjusted networth

Times

0.34

1.04

Interest coverage

Times

4.89

4.55

Any other information: Not Applicable

Note on complexity levels of the rated instrument:
Crisil Ratings` complexity levels are assigned to various types of financial instruments and are included (where applicable) in the 'Annexure - Details of Instrument' in this Rating Rationale.

Crisil Ratings will disclose complexity level for all securities - including those that are yet to be placed - based on available information. The complexity level for instruments may be updated, where required, in the rating rationale published subsequent to the issuance of the instrument when details on such features are available.

For more details on the Crisil Ratings` complexity levels please visit www.crisilratings.com. Users may also call the Customer Service Helpdesk with queries on specific instruments.

Annexure - Details of Instrument(s)

ISIN Name Of Instrument Date Of Allotment Coupon Rate (%) Maturity Date Issue Size (Rs.Crore) Complexity Levels Rating Outstanding with Outlook
NA Bank Guarantee NA NA NA 5.00 NA Crisil A2
NA Cash Credit NA NA NA 97.00 NA Crisil BBB+/Stable
NA Proposed Fund-Based Bank Limits NA NA NA 48.00 NA Crisil BBB+/Stable
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 145.0 Crisil BBB+/Stable   -- 29-10-24 Crisil BBB/Positive 04-05-23 Crisil BBB/Stable 06-09-22 Crisil BBB-/Stable Crisil BBB-/Stable
      --   -- 27-06-24 Crisil BBB/Positive   --   -- --
      --   -- 21-02-24 Crisil BBB/Positive   --   -- --
Non-Fund Based Facilities ST 5.0 Crisil A2   -- 29-10-24 Crisil A3+ 04-05-23 Crisil A3+   -- --
      --   -- 27-06-24 Crisil A3+   --   -- --
      --   -- 21-02-24 Crisil A3+   --   -- --
All amounts are in Rs.Cr.
Annexure - Details of Bank Lenders & Facilities
Facility Amount (Rs.Crore) Name of Lender Rating
Bank Guarantee 5 Axis Bank Limited Crisil A2
Cash Credit 35.7 IDBI Bank Limited Crisil BBB+/Stable
Cash Credit 36.3 Axis Bank Limited Crisil BBB+/Stable
Cash Credit 25 The Federal Bank Limited Crisil BBB+/Stable
Proposed Fund-Based Bank Limits 48 Not Applicable Crisil BBB+/Stable
Criteria Details
Links to related criteria
Basics of Ratings (including default recognition, assessing information adequacy)
Criteria for manufacturing, trading and corporate services sector (including approach for financial ratios)

Media Relations
Analytical Contacts
Customer Service Helpdesk

Ramkumar Uppara
Media Relations
Crisil Limited
M: +91 98201 77907
B: +91 22 6137 3000
ramkumar.uppara@crisil.com

Sanjay Lawrence
Media Relations
Crisil Limited
M: +91 89833 21061
B: +91 22 6137 3000
sanjay.lawrence@crisil.com


Nitin Kansal
Director
Crisil Ratings Limited
B:+91 124 672 2000
nitin.kansal@crisil.com

Nilesh Agarwal
Associate Director
Crisil Ratings Limited
B:+91 79 4024 4500
nilesh.agarwal1@crisil.com

Deepak Agrawal
Senior Rating Analyst
Crisil Ratings Limited
B:+91 79 4024 4500
Deepak.Agrawal@crisil.com

Timings: 10.00 am to 7.00 pm
Toll free Number:1800 267 3850

For a copy of Rationales / Rating Reports:
CRISILratingdesk@crisil.com
 
For Analytical queries:
ratingsinvestordesk@crisil.com



 

Note for Media:
This rating rationale is transmitted to you for the sole purpose of dissemination through your newspaper/magazine/agency. The rating rationale may be used by you in full or in part without changing the meaning or context thereof but with due credit to Crisil Ratings. However, Crisil Ratings alone has the sole right of distribution (whether directly or indirectly) of its rationales for consideration or otherwise through any media including websites and portals.


About Crisil Ratings Limited (A subsidiary of Crisil Limited, an S&P Global Company)

Crisil Ratings pioneered the concept of credit rating in India in 1987. With a tradition of independence, analytical rigour and innovation, we set the standards in the credit rating business. We rate the entire range of debt instruments, such as bank loans, certificates of deposit, commercial paper, non-convertible/convertible/partially convertible bonds and debentures, perpetual bonds, bank hybrid capital instruments, asset-backed and mortgage-backed securities, partial guarantees and other structured debt instruments. We have rated over 33,000 large and mid-scale corporates and financial institutions. We have also instituted several innovations in India in the rating business, including ratings for municipal bonds, partially guaranteed instruments and infrastructure investment trusts (InvITs).

Crisil Ratings Limited ('Crisil Ratings') is a wholly-owned subsidiary of Crisil Limited ('Crisil'). Crisil Ratings Limited is registered in India as a credit rating agency with the Securities and Exchange Board of India ("SEBI").

For more information, visit www.crisilratings.com 

 



About Crisil Limited

Crisil is a leading, agile and innovative global analytics company driven by its mission of making markets function better. 

It is India’s foremost provider of ratings, data, research, analytics and solutions with a strong track record of growth, culture of innovation, and global footprint.

It has delivered independent opinions, actionable insights, and efficient solutions to over 100,000 customers through businesses that operate from India, the US, the UK, Argentina, Poland, China, Hong Kong and Singapore.

It is majority owned by S&P Global Inc, a leading provider of transparent and independent ratings, benchmarks, analytics and data to the capital and commodity markets worldwide.

For more information, visit www.crisil.com

Connect with us: TWITTER | LINKEDIN | YOUTUBE | FACEBOOK

CRISIL PRIVACY NOTICE
 
Crisil respects your privacy. We may use your contact information, such as your name, address and email id to fulfil your request and service your account and to provide you with additional information from Crisil. For further information on Crisil's privacy policy please visit www.crisil.com.



DISCLAIMER

This disclaimer is part of and applies to each credit rating report and/or credit rating rationale ('report') provided by Crisil Ratings Limited ('Crisil Ratings'). For the avoidance of doubt, the term 'report' includes the information, ratings and other content forming part of the report. The report is intended for use only within the jurisdiction of India. This report does not constitute an offer of services. Without limiting the generality of the foregoing, nothing in the report is to be construed as Crisil Ratings provision or intention to provide any services in jurisdictions where Crisil Ratings does not have the necessary licenses and/or registration to carry out its business activities. Access or use of this report does not create a client relationship between Crisil Ratings and the user.

The report is a statement of opinion as on the date it is expressed, and it is not intended to and does not constitute investment advice within meaning of any laws or regulations (including US laws and regulations). The report is not an offer to sell or an offer to purchase or subscribe to any investment in any securities, instruments, facilities or solicitation of any kind to enter into any deal or transaction with the entity to which the report pertains. The recipients of the report should rely on their own judgment and take their own professional advice before acting on the report in any way.

Crisil Ratings and its associates do not act as a fiduciary. The report is based on the information believed to be reliable as of the date it is published, Crisil Ratings does not perform an audit or undertake due diligence or independent verification of any information it receives and/or relies on for preparation of the report. THE REPORT IS PROVIDED ON “AS IS” BASIS. TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAWS, CRISIL RATINGS DISCLAIMS WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR OTHER WARRANTIES OR CONDITIONS, INCLUDING WARRANTIES OF MERCHANTABILITY, ACCURACY, COMPLETENESS, ERROR-FREE, NON-INFRINGEMENT, NON-INTERRUPTION, SATISFACTORY QUALITY, FITNESS FOR A PARTICULAR PURPOSE OR INTENDED USAGE. In no event shall Crisil Ratings, its associates, third-party providers, as well as their directors, officers, shareholders, employees or agents be liable to any party for any direct, indirect, incidental, exemplary, compensatory, punitive, special or consequential damages, costs, expenses, legal fees or losses (including, without limitation, lost income or lost profits and opportunity costs) in connection with any use of any part of the report even if advised of the possibility of such damages.

The report is confidential information of Crisil Ratings and Crisil Ratings reserves all rights, titles and interest in the rating report. The report shall not be altered, disseminated, distributed, redistributed, licensed, sub-licensed, sold, assigned or published any content thereof or offer access to any third party without prior written consent of Crisil Ratings.

Crisil Ratings or its associates may have other commercial transactions with the entity to which the report pertains or its associates. Ratings are subject to revision or withdrawal at any time by Crisil Ratings. Crisil Ratings may receive compensation for its ratings and certain credit-related analyses, normally from issuers or underwriters of the instruments, facilities, securities or from obligors.

Crisil Ratings has in place a ratings code of conduct and policies for managing conflict of interest. For more detail, please refer to: https://www.crisil.com/en/home/our-businesses/ratings/regulatory-disclosures/highlighted-policies.html. Public ratings and analysis by Crisil Ratings, as are required to be disclosed under the Securities and Exchange Board of India regulations (and other applicable regulations, if any), are made available on its websites, www.crisilratings.com and https://www.ratingsanalytica.com (free of charge). Crisil Ratings shall not have the obligation to update the information in the Crisil Ratings report following its publication although Crisil Ratings may disseminate its opinion and/or analysis. Reports with more detail and additional information may be available for subscription at a fee.  Rating criteria by Crisil Ratings are available on the Crisil Ratings website, www.crisilratings.com. For the latest rating information on any company rated by Crisil Ratings, you may contact the Crisil Ratings desk at crisilratingdesk@crisil.com, or at (0091) 1800 267 3850.

Crisil Ratings uses the prefix 'PP-MLD' for the ratings of principal-protected market-linked debentures (PPMLD) with effect from November 1, 2011, to comply with the SEBI circular, "Guidelines for Issue and Listing of Structured Products/Market Linked Debentures". The revision in rating symbols for PPMLDs should not be construed as a change in the rating of the subject instrument. For details on Crisil Ratings' use of 'PP-MLD' please refer to the notes to Rating scale for Debt Instruments and Structured Finance Instruments at the following link: https://www.crisilratings.com/en/home/our-business/ratings/credit-ratings-scale.html