Low Cost of labour: Attractive destination for diamond processing.

For
diamond jewellery cost of production US$ 60 to US$ 90 fetches US$ 180 (high
margin)

Rising disposable income: Indias per capita income has rose 37.6% over the
past 4 years (2011-15) to Rs. 88533.

Rise in the number of working women: With women closing the higher
education gap and the pay gap shrinking between men and women, number of
women in high paid jobs is expected to rise. Increase in purchasing power of
working women and their changing fashion needs has pushed up growth in this
sector.

Nurturing new talent: Government has set up various training institutes to

attract quality personnel and focus on constant innovation. Ex: CAD/CAM,
gemmology, diamond grading techniques etc.

Increased awareness and changing preferences:

Development of Special Economic Zones (SEZs) facilitated growth and

enhanced trade potential for sector

Favourable Demographics 63% of Indians lie in the age category of 15-64

years which accounts for the bulk gold demand. Also, 19% of the people lie in 15-
24 age group who will marry in future. (gold consumption high in marriages)

Macro Factors: 7th Pay commission, above average monsoons and low interest
rates should drive the industry forward. Gold is used a hedge against the
inflation. As of 2015-16, investment formed ~24% of Indias total gold demand.

Government policies: Government has set up training institutes for knowledge

related to latest aspects of jewellery design, refining etc. Also, incentives like
custom duty waiver, dedicated SEZs, FDI should boost the industry.
PCJ 2

Value for money brand positioning

Strong domestic retail network of 52 jewellery shops across India, the company
exports jewellery to a few trading houses based in the Middle East.

Studded jewellery and obtain higher margins

PCJ is the fastest growing listed jeweller. It benefits from first-mover advantage in
Tier II/ III cities and a healthy brand developed through celebrity endorsements.

Company has invested behind the brand PCJ Jeweller for generations. It has
been one of the first to use celebrity endorsement (Shilpa Shetty, a Bollywood
actress endorsed the brand in initial years). Further, most of PCJs stores are in
the large-size format and at prominent high streets. This has allowed PCJ to
develop a healthy brand image across customers in north and central India.

High EBITDA margins inspite of low gross margins

Strong relationships with exporters mitigate receivable risk. Share of doubtful

debtors extremely low.

Healthy presence in online space.

In order to derive first-mover advantage in the online space, PCJ has invested in
building partnerships across market places/ players in the online space. It has
entered into an exclusive partnership with Blue Nile to launch products in India.
Further, it has been among the first to tie- up with market places such as
Flipkart, Amazon, and Snapdeal to sell PCJ branded jewellery to customers. The
company has branded its online foray as WearYourShine.com. Also, it is
integrating its manufacturing facilities to ensure faster delivery.