Prepare the Molds: Lightly grease your molds with coconut oil. Set aside.
Melt the Sugar: In a large, heavy-bottomed pan, combine the jaggery and water. Heat over medium, stirring constantly, until the jaggery fully dissolves.
Thicken the Mixture: Continue to cook the mixture, stirring frequently to prevent burning, until it thickens and darkens in color, about 15-20 minutes.
Add Peanuts: Stir in the peanuts (if using) and mix well to ensure they're evenly distributed.
Mold the Panocha: Carefully pour the hot mixture into the prepared molds. Let them cool and set at room temperature.
Unmold and Serve: Once set, carefully remove the panocha from the molds. They're now ready to be enjoyed!