The gold jewellery industry entered FY27 facing a four-pronged challenge. Soaring oil prices, rising inflation concerns and renewed expectations of higher interest rates amid the West Asia crisis coincided with the once-in-three-years Adhik Maas period, which typically dampens wedding-related jewellery demand. At the same time, Prime Minister Narendra Modi urged citizens to curb gold purchases to help arrest the freefall in the Indian rupee, while customs duty on gold was raised to 15% from 6%.
Despite these headwinds, India's listed jewellery stocks have moved in the opposite direction. Backed by stronger-than-expected June quarter business updates, the sector has rallied as much as 40% in just one month.
Data from ACE Equity shows Kalyan Jewellers leading the pack with a 40% gain, followed by Sky Gold at 25%, Thangamayil Jewellery at 24%, Goldiam International at 21%, PC Jeweller at 15%, Titan Company at 14%, and Senco Gold at 9%.
Jewellery companies delivered healthy same-store sales growth during the June quarter, signalling resilient demand and an accelerating shift towards organised players. The sector had earlier corrected following adverse government policy measures and advisories. However, analysts believe demand has remained resilient and that the long-term structural tailwinds for organised jewellers remain intact.
Titan, India's largest jewellery retailer, reported a 41% year-on-year rise in its consumer businesses during the June quarter, supported by strong jewellery demand, retail network expansion and robust growth in its international operations. Its domestic business grew 37% year-on-year, taking the total store count to 3,517. Jewellery continued to be the biggest contributor, with the segment growing 39% over the year-ago period. Titan attributed the performance to healthy festive demand and strong sales during Akshaya Tritiya.
Also read:Titan vs Kalyan Jewellers: What Q1 sales indicate about demand and which stock to buy
Other listed players also reported robust business updates. Senco Gold posted 60% revenue growth along with 38% same-store sales growth, Kalyan Jewellers reported 38% growth, while PC Jeweller recorded 21% growth after reducing more than 90% of its settlement debt and guiding for a debt-free balance sheet this quarter.
Fundamental buying or sentiment driven?
"The Q1 FY27 business updates from jewellers point towards demand resilience despite concerns around Adhik Maas, gold prices and macro uncertainty. While the market expected a softer quarter, demand remained strong across wedding, festive and investment-led categories. A key driver was the ~18% correction from peak gold prices and the return of price stability," Anil R, Senior Research Analyst, Geojit Investments, told ETMarkets.
According to him, the recent rally is largely supported by improving fundamentals rather than sentiment alone. Organised jewellers continue to gain market share from the unorganised segment as consumers increasingly prefer branded and trusted players. At the same time, leading companies have consistently expanded their store networks while maintaining healthy return ratios and strong balance sheets, making the organised jewellery business model increasingly attractive to investors.
He added that the industry is also benefiting from premiumisation and higher penetration of studded jewellery, both of which support sustainable revenue growth over the medium term. The recent consolidation in gold prices is also expected to improve customer footfalls.
That said, valuations for some jewellery stocks are no longer inexpensive, and future returns will increasingly depend on earnings delivery.
Will momentum sustain after Q1 results?
The outlook beyond the June quarter also remains constructive as leading players continue to project strong long-term demand.
"The strong start to FY27 by market leaders reinforces confidence in the sector's demand outlook. Within our coverage universe, we prefer Titan Company (ADD, Fair Value: Rs 4,725) and Bluestone Jewellery (BUY, Target Price: Rs 625) as our preferred picks over the next 12–18 months," Pankaj Kumar, VP Fundamental Research at Kotak Securities, told ETMarkets.
Anil shares a similar view, saying the growth momentum appears sustainable beyond Q2, although the pace will depend on gold price movements and consumer sentiment. Stable gold prices should support demand, as jewellery purchases are typically influenced more by price volatility than by absolute price levels. He also believes initiatives such as gold exchange and recycling programmes will improve affordability and customer engagement.
Also read:Bought gold and silver at the top? Here's what experts suggest after prices plunged up to 50% from January
Importantly, the second half of the year is typically stronger for the industry, supported by the festive season and the peak wedding period. If gold prices remain relatively stable, leading organised jewellery retailers should continue delivering healthy growth over the coming quarters.
Should you buy jewellery stocks right now?
International brokerage Nomura said the "strength show continues, all businesses fire up well" for Titan Company and maintained its Buy rating with a target price of Rs 5,000, implying 9% upside. "We view Titan as a key beneficiary of the rising affluent and elite income population in India, with sales growth at 1.5-2x GDP of India over the medium term," the brokerage said.
Nomura noted that Titan has been among the fastest-growing domestic jewellery players, increasing its market share from 5% in FY19 to 8% in FY24. It expects the company to continue outpacing industry growth and raise its market share to 10% by FY28F, driven by expansion into Tier 2, Tier 3 and Tier 4 towns and the continued migration of consumers from the unorganised sector, which still accounts for 60% of the industry, to organised retailers offering correct carat-age, better designs and an improved shopping experience.
Preeyam Tolia, Research Analyst, Choice Institutional Equities, believes B2B jewellery manufacturers are better placed to outperform over the next 12-18 months. He said these companies can scale without significant investments in store expansion, branding or customer acquisition. With ongoing capacity additions and stronger relationships with organised jewellers, B2B players are well positioned to deliver superior earnings growth. Within this segment, Shanti Gold and Shringar House of Mangalsutra remain the firm's preferred picks.
Citi remains bullish on Kalyan Jewellers, with a target price of Rs 750, implying 58% upside. The brokerage expects the company's franchise-led expansion strategy to support future revenue growth and believes its asset-light model will aid deleveraging while improving return on capital employed (ROCE).
ICICI Securities has also maintained a Buy rating on Kalyan Jewellers, with a target price of Rs 670, implying 41% upside. The brokerage said the company's robust Q1FY27 performance despite multiple headwinds underscores resilient jewellery demand. While continued store expansion and the formalisation of the industry reinforce its positive outlook, it flagged any structural decline in natural diamond prices as a key risk.
Going forward, investors will closely monitor management commentary, festive season demand and the pace of store expansion, all of which are likely to shape the sector's performance over the coming quarters.
