Explained: Gold shines at peak; here’s what it means for jewellery stock investors

Gold could also be glittering at report highs on hopes of a US Fed fee reduce and a weakening rupee, however jewelry shares have misplaced their shine, tumbling as a lot as 35% thus far this yr. With the festive season across the nook and up to date GST tweaks boosting client spending energy, analysts see an opportunity for some sparkle to return to the beaten-down counters.

Whereas the GST on gold itself stays unchanged at 3% on the steel and 5% on making costs, the broader discount in slabs has elevated disposable earnings, which might assist festive purchases.

“The brand new slabs are anticipated to not directly assist jewelry demand, notably through the festive season,” Santosh Meena, Head of Analysis at Swastika Investmart, informed ETMarkets. He expects organized jewellers to put up 14–16% income progress within the subsequent two quarters. However there’s a catch, he says, as larger costs might preserve volumes 10–15% decrease year-on-year.

That units the stage for a combined quarter for the business. India’s peak jewelry shopping for window from October to December sometimes contributes 30–35% of annual jewelry gross sales. Cultural elements guarantee jewelry stays a must-buy throughout weddings and festivals, however this yr’s surge in costs—up 28–39% thus far in 2025—might mood enthusiasm, consultants say.

“Shoppers have a tendency to purchase extra aggressively when costs are secure somewhat than trending larger, so this yr’s purchases could also be larger in worth however decrease in weight,” LKP Securities’ Jateen Trivedi stated. “The optimism across the festive season is sort of robust and the upcoming wedding ceremony season can also be anticipated to be fairly good, with almost 5 million weddings anticipated to happen over the following 3-4 months. Although wedding ceremony demand is considerably inelastic, the demand can be decrease for discretionary gold purchases, thus total quantity progress might not be very excessive. On a year-over-year foundation, the amount progress can be weak, however worth progress could be >20-25%,” Aishvarya Dadheech of Fident Asset Administration stated.

Analysts additionally see a definite shift in client behaviour. Many are choosing lighter designs, buying and selling in outdated jewelry, or shifting to alternate options like silver and 18K jewelry. Whereas this might squeeze smaller gamers, giant retailers are higher positioned to resist the pattern. “Rising jewelry costs are more likely to suppress jewelry volumes by 10–20% within the coming quarters,” Meena stated, including that giant, organized retailers should still maintain worth progress by means of premium pricing and better studded jewelry gross sales.Nevertheless, margin combine might show to be a brilliant spot for jewelry shares within the coming quarters. Studded jewelry, which carries margins of as much as 30–35% in contrast with 10–14% for plain gold, is predicted to see larger demand, particularly from city consumers. “If festive demand shifts towards studded items, corporations might partially offset the affect of decrease jewelry volumes by means of improved profitability,” stated Trivedi. Meena expects total margins of main gamers like Titan and Kalyan Jewellers to enhance by 1–2% in Q3–This fall FY26.

What ought to traders do?

Investor technique, nonetheless, stays cautious. Each consultants consider stability in gold costs can be key earlier than jewelry shares can regain sustained momentum. “Jewelry corporations are inclined to carry out higher when gold costs consolidate somewhat than rally sharply,” Trivedi stated, advising traders to stagger their purchases and add throughout corrections.

High picks

Apart from Titan, which has held up higher because of its robust model and diversified portfolio, most jewelry counters are buying and selling within the pink this yr. Meena believes Titan might face some profit-booking near-term however sees potential in smaller names resembling DP Abhushan, Thangamayil Jewelry, and PN Gadgil. He additionally favours Muthoot Finance, which advantages immediately from larger gold costs by means of the elevated worth of its mortgage e-book. “I consider traders ought to concentrate on gold finance corporations amid rising gold costs, as they stand to be the main beneficiaries,” he stated.

On the flip aspect, Swastika Investmart maintains an ‘Keep away from’ ranking on Kalyan Jewellers, whereas LKP prefers sticking with bigger, established gamers.

Inventory Efficiency

Titan Firm, the most important firm by m-cap within the area, has seen its inventory rally almost 12% on a year-to-date foundation. Different gainers embrace Thangamayil and Goldiam Worldwide, up 12% and 4%, respectively.

Laggards embrace Kalyan Jewellers, down almost 35% over the identical interval. PC Jeweller shares have slipped almost 20%, whereas PN Gadgil is down 12% YTD. Different outstanding names, resembling Rajesh Exports and Senco Gold, have additionally declined as much as 32% because the starting of the yr.

(Disclaimer: Suggestions, options, views and opinions given by the consultants are their very own. These don’t characterize the views of The Financial Instances)