Best Jewellery stocks in India to keep an eye on!

adminSeptember 29, 2024

India’s love affair with jewellery is more than just a passing fancy; it’s a deep-rooted tradition that has endured for generations. From the glittering Kohinoor diamond to the intricate Kundan work of Rajasthan, these precious creations have not only adorned the bodies of the wealthy but also the souls of the nation. As the jewellery industry continues to evolve, it presents smart investors with a chance to capitalize on this enduring passion. In this article, we’ll delve into Best Jewellery stocks in India, exploring their potential for growth and the factors that drive their success. Get ready to discover how you can turn your love for jewellery into an attractive investment opportunity.

Jewellery Industry in India

The gem and jewellery industry is experiencing significant growth, driven by rising consumer demand for luxury products. India’s jewellery market is a significant player in the global landscape, accounting for 24.21% of the worldwide jewellery market in FY23. The sector is predominantly driven by gold jewellery, which represented 77.72% of the total revenue.

India is the fifth-largest importer of gold and holds one of the world’s largest gold reserves as well. The Indian jewellery market size was estimated to grow at a CAGR of 5.7% from 2024 to 2030. It was expected to reach from USD 85.52 billion in 2023 to USD 100 billion in 2027.

The global jewellery market size was valued at USD 224.39 billion in 2023. It is projected to grow from USD 232.94 billion in 2024 to reach USD 343.90 billion by 2032, which is expected to grow at a CAGR of 4.99% during the forecast period of 2023-2032. Factors contributing to this growth include increasing disposable incomes, changing consumer preferences, and the popularity of unique, ethically sourced gemstones.

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Recent Trends in Gold Prices and Consumption in India

In recent years, gold prices have experienced notable fluctuations, rising from ₹52,670 per gram in 2022 to ₹65,330 in 2023 and further increasing to ₹76,000 in 2024. This surge includes a substantial increase in the first half of 2023 alone. Despite these high prices, retail sales remained strong, particularly during the festive season, highlighting consumer confidence.

South India leads in gold jewellery consumption, contributing 40% to the national demand. Overall, India’s gold consumption is projected to remain robust in 2024, estimated between 700-800 tonnes. The industry’s growth is influenced by various factors, including geopolitical events like the Russia-Ukraine war and economic conditions such as inflation and interest rate changes from the US Federal Reserve.

Jewellery Exports Slowdown in India

India’s exports of gems and jewellery experienced a significant decline of over 18% year-on-year, from USD 2.01 billion to USD 2.48 billion in August 2024 as compared to the same period in the previous year. This downturn is attributed to a slowdown in global consumption, particularly in key markets like the United States and China, which have shown reduced demand for luxury goods.

The overall export figures for the sector have been impacted by rising inflation and economic uncertainties that have led to cautious spending by consumers. As a result, the Indian gems and jewellery industry is facing challenges in maintaining its growth in these adverse global economic conditions.

Government Initiatives in Jewellery Industry

Government initiatives are pivotal in supporting the jewellery industry’s growth. In India, strategic measures have been implemented to promote exports and attract investments in the sector. In 2024, the Indian government introduced significant initiatives aimed at revitalizing the jewelry industry, particularly through substantial reductions in customs duties.

The Union Budget announced a decrease in customs duties on gold and silver from 15% to 6% and on platinum from 15.4% to 6.4%. This move is expected to make jewelry more affordable, especially ahead of wedding seasons and festivals, potentially leading to a short-term drop in prices for consumers.

The Gems and Jewellery Export Promotion Council (GJEPC) has highlighted the potential to enhance domestic value addition and boost sales within the sector. Additionally, the government is promoting the Diamond Imprest License, which will allow small and medium enterprises (SMEs) to import diamonds based on their export turnover, thus leveling the playing field with larger exporters.

This initiative is part of a broader strategy to position India as a global hub for diamond trading, comparable to established markets like Dubai and Antwerp. The GJEPC aims for India’s gems and jewelry exports to reach $75 billion by 2030, with specific targets set for gold jewelry alone to achieve $25 billion.

Overall, these programs like the Gold Monetization Scheme and GJEPC aim to boost domestic gold supply and reduce dependency on imports. Furthermore, the adoption of blockchain technology enhances supply chain transparency, addresses ethical sourcing concerns, and fosters consumer trust in the jewellery industry. We’ll see some of the Best Jewellery stocks in India in the next paragraph.

Best Jewellery Stock in India

Titan Company

Titan Company was established in 1984, with its headquarters in Bangalore. The company is a joint venture between the Tata Group and Tamilnadu Industrial Development Corporation. It is a leading player in India’s jewellery market, with its flagship brand Tanishq.

Titan’s jewellery division includes a portfolio of brands like Tanishq, Zoya, Mia by Tanishq, and CaratLane. It offers a diverse range of products, from luxury pieces to contemporary designs. The jewellery division achieved ₹38,352 crore in revenue for FY 2023-24, reflecting 20% growth year-on-year.

The company has undertaken significant retail expansion, adding 56 new stores across brands and upgrading existing ones to enhance the customer experience. Additionally, Tanishq’s same-store sales grew by 16%, driven by innovative product lines and customer-focused campaigns. CaratLane and Mia by Tanishq also experienced substantial growth, with CaratLane growing by 31% and Mia by 34%.

Revenue: Titan Company Limited’s revenue has increased from ₹40,575 crore in FY23 to ₹51,084 crore in FY24, which has grown by 28.90%. The company’s revenue is coming from manufacturing goods by 73.42%, traded goods by 17.94%, services by 0.16%, and other operating income by 8.42% in FY24. Titan’s revenue has grown at a CAGR of 24.81% over the last four years.

Net Profit: Titan Company Limited’s net profit has grown by 6.78%, from ₹3,274 crore in FY23 to ₹3,496 crore in FY24. The net profit has grown at a CAGR of 23.70% over the last four years.

Future Plans: Titan Company Limited is planning to continue aggressive investments in store expansions and new collections, which is targeting a 15-20% annual revenue growth. The jewellery division aims to increase its market share from 8.5% to around 10-11% by FY 2026-27. Key initiatives include significant investments in new store openings, digital innovations, and collaborations with renowned designers to boost product offerings, ensuring both domestic and international growth.

Kalyan Jewellers India

Kalyan Jewellers India was founded in 1993 by T.S. Kalyanaraman. The company’s headquarters are in Thrissur, Kerala. Kalyan Jewellers India Limited has established itself as one of India’s largest and most trusted jewellery brands. The company operates across various segments of the jewellery market, including wedding jewellery, regional jewellery, and diamond collections.

Kalyan Jewellers derives a significant portion of its revenue from gold jewellery, particularly in South India. The company has also ventured into high-margin categories like diamond and studded jewellery to boost profitability.

Kalyan Jewellers India Limited has over 253 showrooms across five countries, including 217 in India and 36 in the Middle East. The company operates through a mix of owned and franchised stores, including a successful digital-first strategy with its Candere platform. The company has contributed to achieving 32% year-on-year growth in revenue, driven by an increase in franchised showroom contributions and a robust demand for its diverse product offerings.

Revenue: Kalyan Jewellers India Limited’s revenue has increased from ₹14,071 crore in FY23 to ₹18,548 crore in FY24, which has grown by 24.14%. The company’s most of the revenue is coming from the sale of jewellery by 99.59% and other operating income by 0.41% in FY24. Kalyan Jewellers India Limited’s revenue has grown at a CAGR of 16.41% over the last four years.

Net Profit: Kalyan Jewellers India Limited’s net profit has grown by 37.96%, from ₹432 crore in FY23 to ₹596 crore in FY24. The net profit has grown at a CAGR of 43.13% over the last four years.

Future Plans: Kalyan plans to expand its showroom network by adding 130 new showrooms in FY25, focusing on 80 for Kalyan and 50 for Candere brands. This includes expanding its footprint in non-South Indian markets and international locations like the Middle East. The company aims to enhance its omni-channel presence, blending online and offline sales channels. Additionally, Kalyan Jewellers will invest in capital-light growth, leveraging its franchise model to optimize returns.

Senco Gold

Senco Gold was established on August 22, 1994, and is headquartered in Kolkata, West Bengal. The company has evolved into one of the leading jewellery retail chains in the country, with a particular focus on gold and diamond jewellery. The company has a rich legacy of over 85 years, offering a wide range of gold, diamond, and silver jewellery.

Senco Gold’s portfolio includes more than 151,000 gold designs and 85,000 diamond jewellery designs, crafted by a team of over 100 artisans. The company operates a robust retail network of 159 showrooms across India, including 66 franchise outlets, spread across 96 cities and towns in 13 states. Senco’s stores are situated in both Tier-II and Tier-III cities, catering to diverse customer segments.

The company has developed key sub-brands like Everlite, focusing on lightweight jewellery, and Sennes, offering lab-grown diamonds and luxury lifestyle products. The company employs around 100 skilled artisans who meticulously craft these pieces, ensuring high quality and unique designs tailored to customer preferences.

Revenue: Senco Gold Limited’s revenue has increased from ₹4,077 crore in FY23 to ₹5,241 crore in FY24, which has grown by 28.55%. The company’s most of revenue came from gold jewellery by 85.11%, diamond jewellery by 10.93%, platinum jewellery by 2.36%, silver jewellery by 0.92%, and other segments income by 0.68% in FY24. The company has earned a revenue from India by 96.03% and outside India by 3.97%. Senco Gold Limited’s revenue has grown at a CAGR of 21.31% over the last four years.

Net Profit: Senco Gold Limited’s net profit has grown by 13.24%, from ₹158.03 crore in FY23 to ₹178.95 crore in FY24. The net profit has grown at a CAGR of 18.43% over the last four years.

Future Plans: Senco Gold plans to further expand its presence across India by opening more showrooms, focusing on Tier II and Tier III cities. The company has committed to increasing its CAPEX to drive this retail expansion. Additionally, Senco Gold aims to strengthen its digital presence by introducing platforms like Digi Gold and Digi Silver, which allow customers to purchase gold and silver in small amounts digitally. Senco also plans to increase its product offerings, with a focus on lab-grown diamonds and lifestyle accessories.

Sky Gold

Sky Gold was founded in 2005 and is headquartered in Navi Mumbai, India. The company is a prominent player in the jewelry industry, specializing in lightweight 22-carat gold jewelry. The company operates an 81,000 sq. ft. state-of-the-art facility, equipped with German and Italian technology, which produces between 750 to 800 kg of gold jewelry monthly.

Sky Gold’s portfolio includes rings, bracelets, bangles, earrings, and pendants, serving both special occasions and daily wear across various price points. The company design library boasts over 500,000 unique designs, catering to wholesalers and retailers across India. The company’s strategic focus on localized designs and an expansive product range has solidified its position in mid-market and value segments.

Revenue: Sky Gold Limited’s revenue has increased from ₹1154 crore in FY23 to ₹1745 crore in FY24, which has grown by 33.87%. The company’s revenue has grown at a CAGR of 24.69% over the last four years.

Net Profit: Sky Gold Limited’s net profit has grown massively by 110.53%, from ₹19 crore in FY23 to ₹40 crore in FY24. The net profit has grown at a CAGR of 60.69% over the last four years.

Future Plans: Sky Gold Ltd plans to expand its jewelry production and increase capacity utilization at its new Navi Mumbai facility. It aims to boost automation and IT investments, improve regional sales, and strengthen its management team. The company is also exploring new geographic markets and intends to open new retail outlets, further increasing its market footprint.