Jewellery firms are set to report a strong year-on-year revenue growth for the October-December quarter, driven by strong wedding and festive demand, according to analysts and company updates.
“Consumption remained buoyant, supported by higher realisations amid sustained gold price increases, a higher number of auspicious days, and a gradual shift from unorganised to organised trade following the sharp 900 basis points (bps) cut in gold import duty,” said Srikumar Krishnamurthy, senior vice president & co-group head, corporate ratings, Icra.
Also ReadMarico Q3 Preview: Can price hike stem margin contraction?
The FY25 Union Budget had reduced the import duty on gold from 15% to 6%, significantly boosting organised players.
Also Read Consumer benefits of implementing market caps in the UPI ecosystem Fireworks in defence sector in Q4: Sharp rise in order inflow expected as indigenization up Dating apps woo users Mumbai’s asset-light model draws realty heavyweights
In its quarterly business update, Kalyan Jewellers on Tuesday reported a 39% year-on-year increase in consolidated revenue during Q3FY25. Its India operations posted a 41% revenue growth, supported by a 24% rise in same-store sales growth (SSSG).
Titan Company also posted an impressive performance in an update released on Monday, with its domestic jewellery segment growing 25% YoY, driven by strong consumer demand during the festive season. “Robust traction during Diwali translated into high single-digit buyer growth along with double-digit ticket size growth,” the company said in its update.
“Jewellery companies benefited from strong SSSG and sustained consumer demand,” said a report by Motilal Oswal.
Rapid store expansion into tier-2 and tier-3 cities has also contributed to the revenue growth of jewellery majors.
Analysts expect revenue growth for jewellery majors to range between 25% and 30% YoY for the quarter. Nuvama Institutional Equities projects growth at 24%, while Motilal Oswal estimates a 31% rise.
Earnings before interest, tax, depreciation, and amortization (Ebitda) and profit after tax are likely to grow by approximately 20% and 18% YoY, respectively.
Also ReadL&T bags orders in India and abroad for its Power Transmission & Distribution business
Despite strong topline growth, some challenges persist. Retailers adopting formal hedging for gold purchases may face temporary losses due to the import duty cut,
» Read More
