SKY GOLD AND DIAMONDS LIMITED — Credit Ratings, 05-02-2025: Credit Rating- Revision

**SKY GOLD LTD Financial Summary**

Consolidated revenue for the half-year reached ₹14,918 million, a notable increase from ₹11,538 million in the previous year, reflecting a robust growth trajectory driven by a compound annual growth rate (CAGR) of 27% from FY20-FY24. The company’s operational efficiency has improved, resulting in an EBITDA margin of 5.1% compared to 3.1% in the prior year, although margins remain modest due to the business's nature.

The net profit and EPS figures for the half-year illustrate a positive shift in profitability, aided by increasing demand and a well-managed working capital cycle. Interest coverage improved to 4.2x from 3.4x, indicating enhanced capacity to service debt, while net leverage stands lower at 2.2x, down from 3.4x, suggesting improved financial stability.

Operational costs have been impacted by expansion initiatives, with expenses reflecting significant investments in capacity upgrades and efficiencies. The total net debt grew to ₹2,333 million, up 44% since FY20, highlighting the reliance on external borrowings to facilitate growth.

Strategically, the company is focusing on inorganic growth through recent acquisitions which have enhanced its manufacturing capabilities. Market sentiment appears favorable due to solid sales performances with reputed retailers, but challenges remain, particularly in managing competition and fluctuating gold prices.

For investors, the company's performance and strategic direction suggest a **hold** position, considering ongoing expansion risks against the backdrop of improved metrics and robust demand trends.