DEEPA JEWELLERS LIMITED

Consumer Cyclical — Luxury Goods · NSE

₹249.95+₹12.33 (+5.19%)

DalalBaazaar Score

67 / 100

🟢 Good

Verdict

REASONABLE

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: Strong business and financial position, with both sales and profits growing well. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:08 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

The 60-second version of DEEPA JEWELLERS LIMITED — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

Deepa Jewellers Limited engages in designing, processing, and suppling of hallmarked gold and precious stone studded jewellery in India.

IndustryLuxury Goods

SectorConsumer Cyclical

Employees64

Annual revenue₹1,927 Cr

How does it make money?

Turns over ₹1,927 Cr a year. Of every ₹100 of sales, about ₹5 reaches shareholders as profit, with ₹8 left at the operating level before interest, tax and depreciation. Each of its 64 employees supports ₹30.10 Cr of revenue a year, the signature of a capital- or asset-led business.

EBITDA margin7.6%

Net margin5.4%

Revenue / employee₹30.10 Cr

Who are its competitors?

The closest listed comparisons in its industry are TITAN COMPANY LIMITED, TRENT LTD, AVENUE SUPERMARTS LIMITED, ASIAN PAINTS LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.

TITAN COMPANY LIMITEDP/E 68.5x · ROE 36.7%

TRENT LTDP/E 87.2x · ROE 25.9%

AVENUE SUPERMARTS LIMITEDP/E 69.9x · ROE 12.7%

ASIAN PAINTS LIMITEDP/E 46.9x · ROE 22.3%

What is its competitive advantage?The numbers suggest a real one

ROCE has stayed above 15% in every year available and stands at 51.0%. Returns that high normally get competed away; when they persist, something is protecting them, and its ROE of 44.0% against a peer median of 25.9% is consistent with that. What that something is — brand, scale, switching costs, regulation — the accounts cannot tell you.

ROCE51.0%

ROE44.0%

Peer median ROE25.9%

What has been driving growth?

Sales and margins have both contributed to where profit is now. Over 3 years revenue moved +109% while net margin moved +128% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect+109%

Margin effect+128%

DalalBaazaar Score

67/ 100

Good

Weighted across six categories. Every point is explained below.

✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

76/ 100

Good

How good the business is, ignoring the share price entirely.

Valuation

66/ 100

Fair

What you are being asked to pay, ignoring how good the business is.

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

22.9x

Sector Median

69.2x

median of 4 sector peers

🟢Against its sector it trades 67% below the peer median of 69.2x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

69.2x median of 4 peers · -67%

vs. generic bands

Fair

15x–35x

P/E (Trailing)

22.9x

P/B

8.61x

EV/EBITDA

17.2x

PEG

0.34

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well5

Margins are improving
EBITDA margin is up from 3.6% to 7.6% over 3 years.
Return on equity is rising
ROE has improved from 32.3% to 44.0%.
Return on capital is rising
ROCE has improved from 29.9% to 51.0%.
High return on capital employed
ROCE of 51.0% is the mark of a business that converts capital into profit efficiently.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Debt is rising
Total debt is up 40% over 3 years — worth checking what it funded.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 179% against revenue growth of 109% — customers are taking longer to pay.

Red Flags

4 items require attention · 2 high · 2 watch

🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴Receivables growing faster than salesFinancial
Receivables up 179% against revenue up 109% — sales are being booked faster than they are collected.
🟡Debt is increasingFinancial
Total debt is up 40% over 3 years.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹19 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Capital compounds at a high rate
ROCE of 51.0% means each rupee reinvested earns well above what capital costs. If the company can keep deploying at this rate, growth creates value rather than just consuming cash.
Margin expansion has further to run
EBITDA margin has risen from 3.6% to 7.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Cheaper than its peers
It trades 67% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Sales are being booked faster than collected
Receivables are up 179% against revenue up 109%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
Several serious flags at once
2 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1Revenue growth stays above 21% a year✓ 27.9% CAGR
Latest reported year was 39.0%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
2EBITDA margin holds above 6%✓ 7.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
3Free cash flow remains positive✗ -₹19 Cr
Profit that never becomes cash eventually stops being profit.
4Debt / EBITDA stays below 2x✓ 0.8x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
5ROCE stays above 48%✓ 51.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

8 / 10 checks passed

✓ Strong return on equity (ROE ≥ 15%)
✓ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✓ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹2,403 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

22.9x

Fair

Fairly valued against the generic band

P/B Ratio

8.61x

Rich

Steep premium to book — needs high, durable returns to justify

EPS (TTM)

₹10.9

Profitable

Profitable on a per-share basis

ROE

44.0%

Strong

Strong capital efficiency

ROCE

51.0%

Strong

Earns comfortably above its likely cost of capital

Debt/Equity

0.49x

Low

Conservative leverage

Revenue Growth (YoY)

39.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

26.8%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹19 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹249.95

Operating Margin

8.9%

Average

Average margins

Net Margin

5.4%

Average

Average bottom-line conversion

Current Ratio

4.94

Comfortable

Healthy short-term liquidity

52W Range Position

89%

Near high

Near its 52-week high

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹921 Cr	₹1,025 Cr	₹1,397 Cr	₹1,927 Cr	+27.9%
EBITDA	₹33 Cr	₹37 Cr	₹59 Cr	₹146 Cr	+63.5%
EBITDA Margin	3.6%	3.6%	4.2%	7.6%	—
PAT (Net Profit)	₹22 Cr	₹24 Cr	₹41 Cr	₹105 Cr	+68.2%
EPS	₹2.29	₹2.53	₹4.22	₹10.9	+68.2%
ROE	32.3%	26.3%	30.5%	44.0%	—
ROCE	29.9%	27.3%	34.2%	51.0%	—
Total Debt	₹83 Cr	₹78 Cr	₹81 Cr	₹117 Cr	+11.9%
Free Cash Flow	-₹7 Cr	₹5 Cr	-₹10 Cr	-₹19 Cr	—

🟢 Revenue has grown at 27.9% a year over 3 years.

🟢 EBITDA has grown at 63.5% a year over 3 years.

🟢 EBITDA Margin has risen from 3.6% to 7.6% over 3 years (+4.0 pts).

🟢 PAT (Net Profit) has grown at 68.2% a year over 3 years.

🟢 EPS has grown at 68.2% a year over 3 years.

🟢 ROE has risen from 32.3% to 44.0% over 3 years (+11.7 pts).

🟢 ROCE has risen from 29.9% to 51.0% over 3 years (+21.2 pts).

🔴 Total Debt has grown at 11.9% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹357 Cr

Total Liabilities

₹119 Cr

Total Debt

₹117 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

-₹15 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

1.6%

Insider Holding

75.1%

Peer Comparison

Company	P/E	ROE
TITAN COMPANY LIMITED	68.5x	36.7%
TRENT LTD	87.2x	25.9%
AVENUE SUPERMARTS LIMITED	69.9x	12.7%
ASIAN PAINTS LIMITED	46.9x	22.3%

Recent News

2 mixed4 general

Deepa Jewellers Ltd. IPO Review - Deepa Jewellers Ltd. IPO Dates, Issue Price, Subscription and Allotment Status

The Economic Times, 13 Oct

Deepa Jewellers Share Price Rise Backed by Valuation View

Univest, 06 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Deepa Jewellers IPO listing: Shares debut at Rs 221 on NSE, 25% premium to issue price

Moneycontrol.com, 08 Sept

Compare RAJESH EXPORTS with

Equitymaster, 13 Oct

Deepa Jewellers share price rallies 13% despite stock market rout | Q1 growth, IPO gains in focus

Livemint, 07 OctPrice move

🟡Mixed / dependsA price move, which is not by itself a change in the business. Worth finding the cause before reading it as either good or bad.

Market Trading Guide: Deepa Jewellers among 2 stock recommendations for Friday

The Economic Times, 08 Oct

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate12.4/20

🟢Financial HealthStrong14.5/20

🟢GrowthStrong18.5/20

🟢ProfitabilityStrong11.8/15

🟡ValuationFair6.8/15

🔴RiskHigh2.5/10

Good business at a fair price

A sound business at a reasonable valuation. Suitable for a long-term holding, with the valuation and the direction of margins worth watching rather than the business itself. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓Revenue growth stays above 21% a year27.9% CAGR
✓EBITDA margin holds above 6%7.6%
✗Free cash flow remains positive-₹19 Cr
✓Debt / EBITDA stays below 2x0.8x
✓ROCE stays above 48%51.0%