Top 5 Jewellery Stocks in India

Jewellery stocks are in the news these days. These stocks have been rising in the market in an eye-catching manner ever since the budget was announced.

The government slashed customs duties on gold and silver by 6%. The basic customs duty has been reduced to 5% from 10%, and the agriculture infrastructure and development cess was lowered to 1% from 5%.

Why was this important for jewellery stocks?

The reduction in customs duty on gold and silver has led to a decline in precious metal prices. This will lead to significant cost savings for jewellery firms.

These firms were under severe margin pressure due to high prices of precious metals, especially gold. But now, this pressure will ease, leading to higher margins and thus, higher profits.

The markets have recognised this and have already begun to take the prices of these stocks higher.

In this editorial, we will examine the top jewellery stocks in the Indian stock market.

Read on...

#1 Titan Company

Titan is a Tata group company that manufactures luxury and fashion accessories such as jewellery, watches, and eyewear.

It started as a joint venture with TIDCO, the company has its corporate headquarters in electronic city, Bengaluru, and registered office in Hosur, Tamil Nadu.

Titan Company commenced operations in 1984 under the name Titan Watches. In 1994, Titan diversified into jewellery with Tanishq and subsequently into eyewear with Titan Eye Plus.

Titan derives 90% of its sales from the jewellery segment with a 7% market share. Watches and wearables contribute 7% of total revenues with the balance coming in from eyecare division.

In its recent quarterly earnings report, Titan reported only marginal growth. The core domestic jewellery business grew 8% year on year (YoY).

The company showed mixed performance across its divisions, facing various challenges. High gold prices had significantly impacted consumer demand.

However, the cut in customs duty has resulted in a decline in gold prices. This will support margins and also give a boost to jewellery demand, just in time for the festive/wedding season.

Thus, the negative sentiment around the stock has lifted to an extent recently. However, the company has its work cut out in the face of increasing competition and changing customer preferences.

For more details, see the Titan company fact sheet and quarterly results.

#2 PC Jewellers

PC Jeweller is an Indian jewellery firm based in New Delhi.

It started operations in April 2005 with one showroom at Karol Bagh, Delhi. It's a first generation business promoted by two brothers - Padam Chand Gupta and Balram Garg. It presently has 80 stores in 66 cities, across 17 states and union territories.

The stock has been on the rise recently due to the boost in sentiment surrounding jewellery stocks due to the customs duty cut on precious metals.

Earlier this month the company announced a fund raising via 481.3 million (m) fully convertible warrants through private placement basis. Both promoters and non-promotes can participate.

The issue price per warrant is Rs 56.2, a premium to the floor price determined under SEBI regulations. The total amount raised will be up to Rs 27.1 billion (bn), subject to approval from members and regulatory authorities.

While all this might be good news in the short term, investors should be aware that the company has been making losses for the last three years.

Thus, any investor considering an investment in the jewellery stocks should be extremely wary of the stock of PC jeweller.

The company has recently reached a one-time agreement with its lenders to settle its outstanding debt of Rs 35 bn. The company has offered Rs 22.5 bn in a mix of cash and equity. The lenders will be taking a 20% haircut in this settlement.

This has boosted short-term sentiment around the stock. However, it remains to be seen how the company returns to profitability and finds its place in an extremely competitive market.

For more details, see the PC Jeweller company fact sheet and quarterly results.

#3 Kalyan Jewellers

Kalyan Jewellers is one of the largest jewellery companies in India. It's run by one of the oldest business families in India with a family legacy of over a century since 1908.

Having ventured into jewellery retailing in 1993 in Thrissur, Kerala, the company has since expanded to become a pan-India jewellery company.

It designs, manufactures, and sells a wide range of gold, studded, and other jewellery products across various price points ranging from jewellery for special occasions, such as weddings, which is its highest-selling product category, to daily-wear jewellery.

Kalyan Jewellers is currently on a store expansion spree, having opened about 60 showrooms in FY24. For 2025, it's planning 55 franchise Kalyan showrooms in India, and around 80 showrooms in total.

The company's is looking at lab-grown diamonds as its next big growth engine. This segment is still at nascent stage in India.

It's on a firm footing as far as financials are concerned. It's growth has been strong. Revenues have grown at 30.1% and 31.8% in FY23 and FY24, respectively.

Despite the rise in gold prices, and an aggressive expansion drive, the company's net margin has increased from 1.4% at the end of FY20 to 3.2% at the end of FY24, a commendable achievement.

The company's cash flow from operations has increase more than 4 times in the last four years from Rs 3.2 bn in FY20 to Rs 13.2 in FY24.

For more details, see the Kalyan Jewellers company fact sheet and quarterly results.

#4 Senco Gold

Incorporated in 1994, Senco Gold is a pan-India jewellery retailer. The products are sold under its brand name Senco Gold & Diamonds.

The company listed about one year ago in July 2023 on the stock market via its IPO.

Senco Gold primarily sells gold and diamond jewellery along with jewellery made of silver, platinum, precious and semi-precious stones, and other metals. The company also offers costume jewellery, gold, and silver coins, and utensils made of silver.

With a catalogue of more than 108,000 designs for gold jewellery and more than 46,000 designs for diamond jewellery, the company offers a variety of designs of handcrafted jewellery, most of which are designed and manufactured in-house in collaboration with over 170 skilled local craftsmen in Kolkata and across the country.

The company also manufactures machine-made lightweight jewellery in gold and diamonds and source jewellery from third-party vendors.

The company has over 136 showrooms which have a total area of approximately 409,882 square feet. It includes 70 company-operated showrooms and 61 franchisee showrooms spread across 99 cities and towns over 13 states across India.

The company is doing well financially. Its growth over the last two years has been good. In FY23 and FY24, revenues grew 32.9% and 15.4%, respectively. The net profit has increased 2.5 times in the same period. The company is debt free.

For more details, see the Senco Gold company fact sheet and quarterly results.

#5 Thangamayil Jewellery

Thangamayil Jewellery is one of the leading jewellery retailers in India.

Based out of Tamil Nadu, the company sells gold, silver, diamond, and platinum jewellery. It has four manufacturing facilities with in-house goldsmiths to craft jewellery according to the latest trends.

The company has been on a major store expansion drive over the last few years. It's actively expanding retail presence in Tamil Nadu, a state with the largest share of India's gold consumption.

It commands a strong market presence in the Tier II and Tier III cities of Tamil Nadu. It also has a dominant position in the Madurai micro market.

The expansion drive has strengthened its position in the organised jewellery market and has won market share from unorganised players.

The company is doing well financially. Its revenue has grown 2.2 times over the last four years from Rs 16.8 bn in FY20 to Rs 38.2 bn in FY24.

The net profit growth has been even better at 2.7 times over the last four years from Rs 0.45 bn in FY20 to Rs 1.2 bn in FY24.

Its debt to equity is manageable at 0.2 times and the interest coverage ratio is 5.5. It's store expansion hasn't resulted in a significant increase in debt over the last few years.

In FY24, the company generated Rs 3.3 bn in cash flow from operations.

To know more, see the Thangamayil Jewellery company fact sheet and its quarterly results.

Conclusion

The reduction in customs duty on gold and silver from 15% to 6% is expected to reduce the input costs for jewellery firms. The budget proposal could also boost the export business of jewellery companies.

This policy move is viewed positively as it aims to increase jewellery exports and foster growth in the precious metals sector. The duty cut is also expected to enhance the competitiveness of Indian jewellery in the global market.

The growth in the jewellery sector could also lead to job creation. This would benefit artisans and other stakeholders all across the supply chain. It would also attract more investment into the jewellery and precious metals sector in general, fostering technological advancements.

However, investors in this sector should be cautious. The industry is incredibly competitive and short term boosts due to duty cuts can't be the basis for long term investments.

Investors should study the fundamentals of these companies in detail and only consider buying them at reasonable valuations.

Happy investing.

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