­Experienced management and long track record of operations
B N Jewellers, was established as a proprietorship firm in 1989 by Mr. Babulal Rawal. It was reconstituted as a partnership firm in the year 2004. Further, the partnership firm was converted into a private limited company on May 21, 2021. The company has an operational track record of over 3 decades in the industry. Mr. Babulal Rawal possesses extensive industry experience of around four decades. He is well supported by his son Mr. Nirmal Rawal  who has been involved in the business for over two decades. The company deals with reputed jewellery retailers like Tanishq, Joyalukkas, Kalyan Jewellers, Titan, PNG, Malabar Gold, Senco Gold, Tribhovandas Bhimji Zaveri, Tara Jewels and others. The extensive experience coupled with long track record of operations has enabled the company to forge long term relations with customers and suppliers. Acuité believes that the experience of the management in the industry is likely to favourably impact the business risk profile of the company over the near to medium term.

Above average financial risk profile
The tangible net worth of the company stood at Rs.93.81 Cr. as on March 31, 2025(prov) as compared to Rs.99.86 Cr. as on March 31, 2024. The slight decline is attributable to change in analytical adjustment wherein Acuite has changed the treatment of unsecured loans of Rs. 35.00 Cr. which was earlier treated as quasi equity, into debt in present assessment. This adjustment is partially off-set by accretion of profit to reserves. The gearing of the company stood at 1.47 times as on 31st March, 2025(prov) as compared to 1.02 times as on 31st March 2024. The Total Outside Liabilities/Tangible Net Worth (TOL/TNW) stood at 1.89 times as on March 31,2025(prov) as compared to 1.36 times as on March 31, 2024.The debt protection metrices of the company remain comfortable marked by Interest coverage ratio (ICR) of 4.87 times and debt service coverage ratio (DSCR) of 2.69 times for FY2025(prov).The net cash accruals to total debt (NCA/TD) stood at 0.25 times in FY2025(prov). Acuite believes that the financial risk profile of the company is likely to be sustained  backed by steady accruals and no major debt funded capex plans.

Improvement in scale of operations coupled with healthy margins
BNJIPL has been consistently improving in terms of revenues with Rs.747.51 Cr. operating income in FY2025(prov) as compared ot Rs.620.10 Cr. in FY2024, a growth of 20.55%. The improvement in revenues showcases strong demand for their products which incorporate latest desings and quality with respect to other competitors. The capital structure and working capital cycle ensures the company is able to churn its inventory adequately in order to generate higher revenues. Additionally, 80-85% of inventories are backed by orders reducing counterparty credit risk . The company has been maintaining healthy levels of EBITDA and PAT margins i.e 7.26% and 3.87% respectively in FY2025(prov). Acuite believes that the company is likely to improve its scale of operations with sustained margins owing to ~85% of their revenues generated from platinum products which command better margins.

­Strong competition from large number of players in the organized and unorganized sector
The gems & jewellery (G&J) industry is characterized by a large number of organized and unorganized players and intense competition resulting in pressure on margins. The G& J industry in India is highly fragmented with numerous organized and unorganized players.  Acuité believes that larger players will benefit from the healthy relationships with their geographically diversified clientele.

Moderate working capital cycle
The GCA days for BNJIPL stood at 103 days as on 31st March,2025(prov) as compared to 117 days as on 31st March,2024. The high GCA days are on account of high inventories which is an industry phenomenon. Inventory days stood at 79 days as on March 31, 2025(prov). The company has 80-85 percent order-backed inventory. However, the company also makes jewellery to keep a buffer stock. Handmade Gold Jewellery takes around 10-15 days of processing and Platinum Jewellery takes around 25-30 days of processing. More customized jewellery as per requirement of the customer takes more time. The debtor’s day stood at 25 days as on March 31, 2025(prov) as against 27 days as on March 31, 2024. For Gold Jewellery, the payment terms are ~15 days for large players and 1 week or full/partial advance payment depending upon the relationship and past track record of the client. Days payable outstanding stood at 10 days as on March 31, 2025(prov) as against 8 days as on March 31, 2024. Import of gold bullions and platinum are backed by BG. Further, the average bank limit utilization in the last six months ended April 25 remained at ~90 percent for fund-based limits. Acuite believes that the operations of the company will continue to experience moderate working capital cycle over the medium term due to nature of operations.

Exposed to regulatory risks and seasonality in demand
The domestic jewellery sector continues to remain exposed to the regulatory risks, which could have an adverse impact on the business. Restrictions on bullion imports, mandatory PAN disclosure on transactions above a threshold limit, imposition of GST and demonetisation are some regulatory developments that have impacted demand and supply in the past. Revenues and cash flows of the jewellery players are also exposed to seasonality in demand, based on the numbers of auspicious days, festivals, crop harvest etc. Acuite believes that changes in customer demand and regulations which may affect the gems and jewellery industry directly or indirectly will remain a key monitorable.