MoneyWorks4Me

Check Before You Invest : Deepa Jewellers Ltd

BSE: 544903 NSE: DEEPA ISIN: INE1M2N01020
  |   Sector:  Consumer Durables   |   Industry:  Diamond & Jewellery

Snapshot

Q.1 Which industry/sub-sector does Deepa Jewellers Ltd belong to?
Deepa Jewellers Ltd belongs to the Consumer Durables sector, operating specifically within the Diamond & Jewellery segment.
Q.2 Is Deepa Jewellers Ltd a good quality company?
Deepa Jewellers Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Deepa Jewellers Ltd undervalued or overvalued?
Deepa Jewellers Ltd appears Overvalued, as its key valuation ratios are higher than their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 3-year
Historic Median
Price to Earnings 17.82 17.82
Price to Book 7.75 7.75
Price to Sales 0.97 0.97
EV to EBITDA 13.43 13.43
Q.4 Is Deepa Jewellers Ltd a good buy now?
Deepa Jewellers Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Deepa Jewellers Ltd?
Deepa Jewellers Ltd revenue growth is 37.9% for FY-2026, which is above its 3-year CAGR of 27.88%, indicating faster growth.

Q.2 Gross Profit margin of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Gross profit margin which is the profit after deduction of direct costs, is 7.3% for FY-2026, which is above its 3-year median of 3.9%, indicating increasing margins.

Q.3 Operating Profit Margin of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 7.6% for FY-2026, which is above its 3-year median of 4.01% indicating increasing margins.

Q.4 Net Profit Margin of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Net Profit Margin is 5.44% for FY-2026, is above its 3-year median of 2.9%, indicating increasing margins.
Current Level 3-year
Historic Median
Gross Profit Margin (%) 7.3 3.9
Operating Profit Margin (%) 7.6 4.01
Net Profit Margin (%) 5.44 2.9

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Return on Asset is 36.49%, which is above its 3-year historical median of 20.71%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Return on capital employed is 52.08% for FY-2026, which is above its 3-year historical median of 30.6%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Return on equity is 56.45% for FY-2026, which is above its 3-year historical median of 35.95%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Cash conversion cycle is 52 days, in line with its 3-year historical median of 52 days, indicating stable working capital management. However, you need to compare this with its peers in the industry.
Current Level 3-year
Historic Median
Asset Turnover (x) 6.71 6.71
ROE (%) 56.45 35.95
ROCE (%) 52.08 30.6
Cash Conversion Cycle 52 days 52 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Debt-to-Equity ratio is 0.47, which is lower the industry average of 0.57, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of Deepa Jewellers Ltd?
Deepa Jewellers Ltd Debt to cash flow from operations is -7.54, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Deepa Jewellers Ltd?

Q.1 Promoter shareholding and pledge status of Deepa Jewellers Ltd?
Promoters hold % of the Deepa Jewellers Ltd, with % of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Deepa Jewellers Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Deepa Jewellers Ltd vs industry peers?
Deepa Jewellers Ltd revenue CAGR is 27.88%, compared to the industry median CAGR of 20.06%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 3-year
Industry Median
Revenue Growth (%) 37.9 20.1
Gross Profit Growth (%) 156.4 38.4
Operating Profit Growth (%) 160.7 35.4
Net Profit Growth (%) 156.1 37.5
Operating Efficiency
Current Level 3-year
Industry Median
Asset Turnover (x) 6.71 1.64
ROE (%) 56.45 12.3
ROCE (%) 52.08 14.14
Cash Conversion Cycle (days) 52.43 108

Valuation & price assessment

Q.1 Stock return of Deepa Jewellers Ltd over the last decade?
Over the last - year(s), the stock has delivered a CAGR of N/A% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
- - - -
Q.2 Valuation ratios of Deepa Jewellers Ltd vs historical?
The current P/E ratio of 17.82 is in line with than its historical median of 17.82, indicating that the stock is trading near its historical average valuation.
Q.3 How do the current valuation ratios compare with 3-year historical median and industry numbers?
Valuation Ratios Current 3-year
Historic Median
3-year
Industry Median
Price to Earnings 17.82 17.82 28.21
Price to Book 7.75 7.75 1.95
Price to Sales 0.97 0.97 1.40
EV to EBITDA 13.43 13.43 17.18

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