Crisil Ratings stated that the revision in the outlook reflects the significant improvement in the company's financial risk profile following equity fund raise of Rs 367 crore through an initial public offering (IPO) with as Rs 275 crore as fresh issue and Rs 93 crore as offer for sale in August 2026. With this, the overall networth is expected to increase over the medium term, with significant free cash availability for business growth. At present, the IPO proceeds have been utilised towards debt reduction and for meeting working capital requirement, with around Rs 40-45 crore being freely available for future use. Consequently, the company's dependence on external borrowings is expected to remain low, leading to an improved capital structure.

The rating action also factors in the expected improvement in the company's business risk profile. Revenue growth is expected to be supported by the availability of additional working capital funds.

Operating margin improved in fiscal 2026, aided by inventory gains resulting from the increase in gold prices. However, the margin is expected to normalise over the medium term.

The company's ability to achieve healthy operating margin along with efficient management of inventory and working capital cycle amid continued volatility in gold prices will remain monitorable.

The rating continues to reflect the established presence of SJL in the gold jewellery industry and the established customer relationships and strong financial risk profile of the company.

These strengths are partially offset by susceptibility of operating performance to intense competition, regulatory scrutiny and volatility in gold prices, and large working capital cycle.

Shankesh Jewellers manufactures hand-crafted gold jewellery and provides customisation services to clients.