Lypsa

Gems & Jewellery Limited

Result Update Presenta7on
Q3 FY17

 Disclaimer

This presenta,on has been prepared by Lypsa Gems & Jewellery Limited (the Company) solely for informa,on purposes and does not cons,tute any oer,
recommenda,on or invita,on to purchase or subscribe for any securi,es, and shall not form the basis or be relied on in connec,on with any contract or binding
commitment what so ever. No oering of securi,es of the Company will be made except by means of a statutory oering document containing detailed informa,on about
the Company.

This Presenta,on has been prepared by the Company based on informa,on and data which the Company considers reliable, but the Company makes no representa,on or
warranty, express or implied, whatsoever, and no reliance shall be placed on, the truth, accuracy, completeness, fairness and reasonableness of the contents of this
Presenta,on. This Presenta,on may not be all inclusive and may not contain all of the informa,on that you may consider material. Any liability in respect of the contents
of, or any omission from, this Presenta,on is expressly excluded.

Certain maJers discussed in this Presenta,on may contain statements regarding the Companys market opportunity and business prospects that are individually and

collec,vely forward-looking statements. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks,
uncertain,es and assump,ons that are dicult to predict. These risks and uncertain,es include, but are not limited to, the performance of the Indian economy and of the
economies of various interna,onal markets, the performance of the industry in India and world-wide, compe,,on, the companys ability to successfully implement its
strategy, the Companys future levels of growth and expansion, technological implementa,on, changes and advancements, changes in revenue, income or cash ows, the
Companys market preferences and its exposure to market risks, as well as other risks. The Companys actual results, levels of ac,vity, performance or achievements could
dier materially and adversely from results expressed in or implied by this Presenta,on. The Company assumes no obliga,on to update any forward-looking informa,on
contained in this Presenta,on. Any forward-looking statements and projec,ons made by third par,es included in this Presenta,on are not adopted by the Company and
the Company is not responsible for such third party statements and projec,ons.

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 Table of Contents

Management Comment

Q3 & 9M FY17 Financial Performance

Annual Financial Performance

Company Overview

3
 Management
Comment

01

 Management Comment

Commen7ng on the results, Mr. Jeeyan Patwa, CFO, Lypsa Gems and Jewellery Limited said :

I am happy to inform you that in line with our strategy we have con,nued to focus on protable growth.

This is the rst year of our new business strategy which is yielding results in line with our expecta,ons. Our
focus con,nues to consciously move away from the low margin cuTng and polishing business to higher
margin rough trading and jewellery business.

Our quality of craVsmanship, exper,se in business and dynamic approach has helped us grow even in this
challenging market condi,ons. Our products have been very well appreciated across the globe and we
con,nue to receive new as well as repeat orders from our customer base.
We are building eciencies across the en,re diamond value chain in order to provide a compe,,ve market
oering and yet make good margins. Complete integra,on along with over four decades of industry
experience will enable us to not only grow revenue but most importantly, focus on protable growth and
generate maximum value for our shareholders.

5
 Q3 & 9M FY17
Highlights

02

 Consolidated Financial Highlights Q3 FY17 vs. Q2 FY17

Revenue
9.6% EBITDA
37.8%
Rs. 70.3 cr Rs. 7.3 cr

210 bps 41.1%
EBITDA margin PAT
10.5% Rs. 6.5 cr

Financial performance in line with strategy of focusing on protable growth and focus on
higher margin business
7
 Quarterly Consolidated Protability Highlights

Rs. Crores Q3 FY17 Q2 FY17 QoQ %

Total Income from Opera7ons 70.3 64.1 9.6%

Raw Materials 62.7 58.5

Employee Cost 0.1 0.2
Other Cost 0.1 0.2
Total Expenditure 62.9 58.8
EBITDA 7.3 5.3 37.5%
EBIDTA margin (%) 10.3% 8.2% 210 bps

Interest 0.8 0.7

DepreciaIon 0.1 0.1

Other Income 0.0 0.1

Prot Before Tax 6.5 4.6
Tax 0.0 0.0
Prot A^er Tax 6.5 4.6 41.1%

PAT Margin (%) 9.2% 7.1% 191 bps

8
 Recent Developments

Tie up with Jewelsouk.com

E- commerce arm of Gitanjali Group
To sell Diamond studded jewellery under Lypsa Atelier brand
Products in the price range of Rs. 7,500- Rs. 35,000

Debt reduc7on by 25%

Repaid Rs.75 million
One of few listed diamond companies in India to iniIate debt repayment

New Orders
Bagged new orders from UAE based customers
To supply loose diamonds and diamond- studded jewellery over 12 months period

9
 Consolidated Financial Highlights 9M FY17

435 bps EBIT Margin

427 bps
EBIDTA Margin
9.3% 9.2%

388 bps
PAT Margin
8.0%

Improvement in margins on account of shi^ from cubng and polishing to rough trading and
jewellery business
10
 9M FY17 Consolidated Protability Highlights

Rs. Crores 9M FY17 9M FY16 YoY %

Total Income from Opera7ons 180.7 425.6 (57.5%)
Raw Materials 162.7 397.7
Employee Cost 0.7 2.4
Other Cost 0.5 4.6
Total Expenditure 163.9 407.7
EBITDA 16.7 20.9 (20.0%)

EBIDTA Margin (%)

Interest
9.3%
2.1
4.9% 435 bps

2.5
DepreciaIon 0.3 0.3
Other Income 0.2 0.4
Prot Before Tax 14.5 18.4
Tax 0.0 0.7
Prot A^er Tax 14.5 17.7 (17.9%)

PAT Margin (%) 8.0% 4.2% 388 bps

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 Annual
Financial Highlights

03

 Consolidated Financial Highlights FY16

Revenue
(19)% 80 bps
EBITDA Margin
Rs.477.0 cr 4.7%

90 bps 4.5%
PAT Margin EPS
3.9% Rs. 8.9

Strong focus on increasing margins & opera7onal eciencies

13
 Consolidated Financial Highlights - FY16

Revenue (Rs. Crore)

EBITDA (Rs. Crore) / Margin (%) PAT (Rs. Crore) / Margin (%)

14
 Key Return Ra7os

Total Asset Turnover (x) RoE (%)

Despite challenging environment, Company registered strong ROE

15
 Annual Consolidated Balance Sheet Highlights

Rs. Crores Mar-16 Mar-15 Rs. Crores Mar-16 Mar-15

Shareholders Funds 72.4 52.4 Non-current assets 6.2 6.0
Share capital 21.1 21.1 Fixed assets 5.9 4.9
Reserves & Surplus 51.3 31.3 Non-current Investments 0.1 0.2
Non-current liabili7es 0.3 0.3 Long-term loans & advances 0.2 1.0
Long term borrowings 0.0 0.0
Other non-current assets 0.0 0.0
Defer Tax liabiliIes 0.3 0.3
Current assets 344.4 276.3
Other Long-Term liabiliIes 0.0 0.0
Long-Term Provisions 0.0 0.0
Current investments 0.2 0.0
Inventories 34.6 27.0
Current liabili7es 277.8 229.6
Short Term Borrowings Trade receivables 301.9 236.8
32.4 38.1
Trade Payables 244.5 188.8 Cash & Cash equivalents 6.7 10.4
Other Current liabiliIes 0.7 1.2 Short-term loans & Advances 0.9 2.1
Short-term provisions 0.3 1.6 Other Current Assets 0.0 0.0
Total Equi7es & Liabili7es 350.6 282.3 Total Assets 350.6 282.3

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 Company Overview

04

 Company Overview

Over 450,000 Carats of Rough

Diamonds Sold
Sold more than 450,000 carats of
rough diamonds in last 5 years Over 600,000 Carats of Polished
Diamonds Sold

Ver7cally Integrated
0 Distributed more than 600,000 cts of
Polished Diamonds Globally in last 5
Diamantaire
4 years
65 years of total experience
amongst promoters 0

2 0
0
0 5
State of Art 3 Amongst few Diamond Companies in
1 Factories
Cu`ng & polishing factory at
India to ini7ate debt repayment
Chaapi - Palanpur in Gujarat Debt reduced by 25% - repaid Rs 7.5cr of
total debt
D/E raIo at 0.75x from 1.03x
Plans to be Debt free soon
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 Journey So Far

Oct 2012 Feb 2015 Sep 2015 Feb 2017

Incorporated Bagged Launched Successfully bagged
WOS outside orders worth second Lypsa orders worth from
India Rs. 32 Crores retail brand UAE based
from UAE Lypsa customers
Atelier

Mar 2014 May 2015 Oct 2016
Launched Launched rst Debt reduced by
e-commerce Lypsa retail brand 25%
B2B Plalorm Oropel

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 Key Management Team

Mr. Deepan Patwa, Chairman & MD Mr. Manish Janani, Joint MD Mr. Jeeyan Patwa, Director & CFO
In 1984, ApprenIceship at Rosy Blue ApprenIceship at Rosy Blue group Graduated from London School of
Group ExperIse in handling diamond cu`ng Economics in BSc and MSc In Management
By 1989, became Sales Head of Rough and polishing operaIons Oversees AccounIng and markeIng
Diamonds Divisions Handles key customer relaIonships funcIons
In 1990, started business dealing and responsible for Group strategy Responsible for New Business
rough diamonds Development

Mr. Hemant Rathod, Head Finance Mr. Kiran Toprani, Head Rough Division Mr. Shreyash Shah, Head Polish Division
Associated with Lypsa since incepIon Responsible for purchasing rough ExperIse in handling key customer
Responsible for Forex hedging, diamonds relaIonships for polished diamonds
AccounIng and ReporIng Oversees cu`ng and polishing of Manages client demands and helps
diamonds with emphasis on cost and align product oering to clients
yield opImizaIon
Supervises quality control and
assortment of polished goods

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 State of Art Cubng & Polishing Factory

Modern diamond cu`ng and polishing

faciliIes in Chaapi in Gujarat allows us to
produce consistent high quality polished
diamonds

Equipped with State of the Art Machinery
for planning and processing rough
diamonds

Focus on cost, quality and yield

opImisaIon

Total annual capacity to process 250,000
cts of small sized rough diamonds

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 Gems & Jewellery Value Addi7on Process

Upstream

Explora7on Rough-diamond Rough-

and sor7ng and diamond
Produc7on valua7on sales

Middle Market

Cubng Polished Diamond

and diamond jewellery
Polishing manufacturing
sales

Downstream

Diamond
jewellery
retail sales

Strong presence across high end of value chain

22
 Strong Global Presence

Europe
Canada
Belgium
Germany
Switzerland Italy
USA Japan
China
Israel
Hong Kong
UAE
Thailand

Singapore

Interna7onal business generates higher margins; 57% of revenue

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 Industry Opportunity

01 Demand & Supply 03 Inec7on Point 05 Export Sector 2015-16

Expect demand for polished Diamond industry starIng to see Gems & Jewellery sector accounted
diamonds to grow recovery and witnessing growth for US$ 38.6 bn of exports
Rough prices and supply to remain Company rightly placed to make Cut and Polished diamonds exports
stable, resulIng in healthier most out of this opportunity contributed to US$ 19.96 bn
margins this year

01 03 05

02 04

02 Industry Policy 04 Lower Pricing

Rough import allowed in special noIed zone Last couple of years - excess supply resulted in low pricing and pressure on
in Bharat Diamond Bourses margins
Allows greater accessibility to rough for Miners reduced supply of rough to suck up excess inventory, resulIng in
manufacturers in India more variety and increase in demand for polished diamonds enabling beier margins for
beier pricing manufacturers like Lypsa 24
 Business Overview

Polish Diamond Sales Rough Diamond Sales

Global sales of polished Purchase rough from
products tenders and diamond
Value added services like dealers in Belgium, Dubai
bagging, custom assortment, and Africa
Just in Time delivery oered Add value by assortment,
to clients providing a unique preparaIon and processing
product and service oering and sell to specialist
Allows higher client manufacturers
retenIon and loyalty

Diamond Cubng & Polishing
Cu`ng and polishing of
Jewellery Bespoke & E- rough to maximize yield and
Commerce
Focus on generaIng quality
maximum value-added by Focus on producing polished
using Lypsa s diamonds to goods below 0.15cts
stud jewellery and selling Use of technology and skill
them through our brands to obtain superior results
Oropel and Atelier
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 Tie ups with leading Indian E-Commerce Plalorms

Tied up with Jewelsouk.com, e-commerce arm
of Gitanjali Group

Launched Lypsa Atelier - CollecIon of

contemporary diamond studded jewellery in
18K and 14K Gold

Over 150 designs to be sold through leading

Indian E-Commerce planorms

Products priced between Rs.7,500 - Rs.35,000

CollecIon uses modern design elements in

vogue with latest fashion trends

Target audience - Women between 18-45

years of age

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 Lypsa Atelier

 Oropel

 Key Strengths

01 02
Presence across enIre Value Three decades of experience
Chain Strong market ReputaIon and
Goodwill
Value added services
pornolio
Ver7cal Established InternaIonal
Integra7on market with presence across
geographies and diverse
Goodwill global customer base

Best in Class
04 Assortment
Leading to high operaIonal Exper7se 03
eciency with minimal wastage Raw Material
Provides 150 assortments of MulIple sources for raw material
rough diamonds to around 500 procurement leading to beier
clients pricing on rough diamonds
Over one million carats of Strong capability to buy and process
diamonds sold in 5 years wide variety of rough
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 Way Forward

Move Up-The-Value Chain 02 01 Export Business

Develop exisIng export business
Concentrate on operaIonal eciencies and
producIvity
Export business generates high margins

Venture into Retail Market with

Increase Footprints Through 03 Strong Business Strategy
E-Commerce Plalorm 04 Focus on increasing penetraIon through well established
Brands (Oropel & Lypsa Atelier)
Leverage on Tie-ups with all major E-
commerce players Jewellery Retail through Omni Channels like online stores,
e-commerce planorms, kiosks and agship stores
Joint Venture with major nancial services
players providing diamond backed nancial Interna7onal Manufacturing and
products to InsItuIonal investors, retail
clients and HNIs 05 Sourcing
Plans to establish cu`ng and polishing factory for larger goods in Botswana, to
get direct supply of rough diamonds from top miners

Plan to open oce to source rough diamonds in Antwerp, Belgium to bring

down cost of sourcing 30
 Thank You

534532 LYPSAGEMS LYPS

For further informa7on, please contact:

Company : Investor Rela7ons Advisors :

Lypsa Gems & Jewellery Limited. Bridge Investor Rela7ons Pvt. Ltd.

Mr. Jeeyan Patwa Ms. Savli Mangle
Director & CFO savli@bridge-ir.com

www.lypsa.in Mr. Rahul Menon
rahul@bridge-ir.com


www.bridge-ir.com

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