Sky Gold & Diamonds has officially announced a strategic transformation under its Sky Gold 3.0 vision, marking a significant shift towards an asset-light expansion model. The company released this update through an official media statement dated February 27, 2026, reinforcing its commitment to capital-efficient growth and enhanced financial resilience.

Strategic Shift from Greenfield to Leased Manufacturing

The company has decided to transition from its original plan of establishing a large-scale greenfield manufacturing facility to a more agile, asset-light expansion approach. As part of this strategic pivot, Sky Gold will scale capacity through leased manufacturing facilities rather than owned assets.

Land Monetization Timeline and Guarantees

Sky Gold has set a clear timeline for the proposed land sale, targeting completion within six months. The company has implemented additional safeguards to ensure execution certainty. In the unlikely event that the transaction is not concluded within the specified period, the promoter family has committed to acquiring the land, ensuring the company remains compensated for any opportunity cost.

Financial Impact and Borrowing Reduction

The strategic shift is expected to deliver significant financial benefits. With proceeds from the land monetization and improved operating cash flows anticipated in FY27, the company expects borrowings to reduce by over 20.00%. The increased utilization of Gold Metal Loans (GML) and other structured financing products is expected to further optimize funding costs.

Management Commentary on Strategic Vision

Mangesh Chauhan, Managing Director of Sky Gold & Diamonds, emphasized the strategic rationale behind this decision. He stated that the move reflects the company's intent to remain adaptive in a dynamic operating environment while sharpening its execution framework. The capital released will be strategically redeployed to strengthen operations and support the company's next phase of growth.

This strategic transformation positions Sky Gold & Diamonds for more responsive customer service, optimized resource deployment, and enhanced operational productivity while maintaining its target of achieving net debt-free status by FY30.

Sky Gold and Diamonds Limited has received a significant credit rating upgrade from India Ratings and Research Private Limited, with its rating enhanced from IND A-/Stable/IND A2+ to IND A/Stable/IND A1. The upgrade, announced on February 16, 2026, reflects the company's strong financial performance and improved operational metrics over recent periods.

Rating Upgrade Details

The credit rating upgrade covers the company's bank loan facilities with a stable outlook maintained across all ratings. The enhancement encompasses both existing and newly assigned facilities:

The short-term rating component has been upgraded from IND A2+ to IND A1, while the long-term rating improved from IND A- to IND A, indicating enhanced creditworthiness and reduced default risk.

Strong Financial Performance Drives Upgrade

India Ratings cited the group's robust consolidated revenue growth as a key factor in the rating upgrade. The company demonstrated exceptional growth momentum with consolidated revenue increasing 103% year-on-year in FY25 and 75% in H1FY26. This growth was primarily driven by inorganic acquisitions, strong product acceptance, and increased sales to reputed retail jewellers.

The company's financial metrics showed significant improvement across key parameters:

Operational Strengths and Market Position

The rating agency highlighted several operational strengths that supported the upgrade decision. The company's gross margins improved to 8.10% in H1FY26 from 7.00% in FY25 and 6.00% in FY24, driven by economies of scale, design premiums, and lower gold loss. The improvement in margins was also supported by increasing studded and high-margin products in the product mix.

Sky Gold and Diamonds benefits from the extensive experience of its promoters, who have over two decades of experience in the gold manufacturing and processing business. The company operates on an asset-light, business-to-business model, catering to large gold retailers, mid-range jewellers, and boutique stores with a current production capacity of 1.20 tonnes per month.

Expansion Plans and Future Outlook

The company has ambitious expansion plans, including the development of a 540,000 square feet facility in Navi Mumbai that will increase production capacity to 4.50 tonnes per month. This new facility is intended to serve as a jewellery park for the Sky Group, consolidating operations to reduce gold loss percentages and enhance profitability.

India Ratings noted that the company's strategic focus on increasing sales under the advance gold model, currently at 5%-7% of total revenue, is likely to improve return on capital employed over the medium term. The rating agency expects the company to maintain steady growth in operations along with cost-optimization initiatives and prudent hedging practices.

Risk Factors and Challenges

Despite the positive rating action, India Ratings identified several constraints including moderate operating margins due to the nature of operations, high inventory requirements resulting in moderately high net leverage levels, and exposure to regulatory oversight and volatile commodity prices. The company also faces customer concentration risk, with the top 10 customers contributing over 62% of revenue in FY25, though the counterparty credit risk remains low as these include reputed brands in the gold retail industry.