• B2B growth strategy: Capitalising on the retail shift from unorganised to corporate chain stores, Deepa Jewellers is using IPO proceeds for working capital and geographic expansion. The company plans to remain strictly focused on B2B, setting up sales offices in Vijayawada and Bangalore to de-concentrate its client base across Tier 2 and Tier 3 markets.
• Margins and return profile: Operating margins are expected to remain stable or improve due to cost reductions from in-house manufacturing and higher studded jewellery sales. The company rotates its working capital in 54 days (about six times annually), supporting an ROE and ROCE of 50% to 55%.
• Core product portfolio: Product offerings are divided between studded jewellery, where the company is a key player in bridal Vaddanam (gold waist belts), and plain gold CNC machine-cut bangles for daily wear.
• Pricing risks and gold exchange: Management identified sharp gold price volatility as the primary risk to customer demand. To mitigate broader import and demand concerns, the company promotes old-gold exchanges for new jewellery, which deliver identical margins and operating dynamics as new gold sales.