Gold may be glittering at record highs on hopes of a US Fed rate cut and a weakening rupee, but jewellery stocks have lost their shine, tumbling as much as 35% so far this year. With the festive season around the corner and recent GST tweaks boosting consumer spending power, analysts see a chance for some sparkle to return to the beaten-down counters.
While the GST on gold itself remains unchanged at 3% on the metal and 5% on making charges, the broader reduction in slabs has increased disposable income, which could support festive purchases.
“The new slabs are expected to indirectly support jewellery demand, particularly during the festive season,” Santosh Meena, Head of Research at Swastika Investmart, told ETMarkets. He expects organized jewellers to post 14–16% revenue growth in the next two quarters. But there’s a catch, he says, as higher prices may keep volumes 10–15% lower year-on-year.
That sets the stage for a mixed quarter for the industry. India’s peak jewellery buying window from October to December typically contributes 30–35% of annual jewellery sales. Cultural factors ensure jewellery remains a must-buy during weddings and festivals, but this year’s surge in prices—up 28–39% so far in 2025—could temper enthusiasm, experts say.
“Consumers tend to buy more aggressively when prices are stable rather than trending higher, so this year’s purchases may be higher in value but lower in weight,” LKP Securities’ Jateen Trivedi said. “The optimism around the festive season is quite strong and the upcoming wedding season is also expected to be quite good, with nearly 5 million weddings expected to take place over the next 3-4 months. Though wedding demand is somewhat inelastic, the demand will be lower for discretionary gold purchases, thus overall volume growth may not be very high. On a year-over-year basis, the volume growth will be weak, but value growth can be >20-25%,” Aishvarya Dadheech of Fident Asset Management said.
Analysts also see a distinct shift in consumer behaviour. Many are opting for lighter designs, trading in old jewellery, or moving to alternatives like silver and 18K jewellery. While this could squeeze smaller players, large retailers are better placed to withstand the trend. “Rising jewellery prices are likely to suppress jewellery volumes by 10–20% in the coming quarters,” Meena said, adding that large, organized retailers may still sustain value growth through premium pricing and higher studded jewellery sales.
However, margin mix could prove to be a bright spot for jewellery stocks in the coming quarters. Studded jewellery, which carries margins of up to 30–35% compared with 10–14% for plain gold, is expected to see higher demand, especially from urban buyers. “If festive demand shifts toward studded pieces, companies could partially offset the impact of lower jewellery volumes through improved profitability,” said Trivedi. Meena expects overall margins of major players like Titan and Kalyan Jewellers to improve by 1–2% in Q3–Q4 FY26.
What should investors do?
Investor strategy, however, remains cautious. Both experts believe stability in gold prices will be key before jewellery stocks can regain sustained momentum. “Jewellery companies tend to perform better when gold prices consolidate rather than rally sharply,” Trivedi said, advising investors to stagger their purchases and add during corrections.
Top picks
Except for Titan, which has held up better thanks to its strong brand and diversified portfolio, most jewellery counters are trading in the red this year. Meena believes Titan may face some profit-booking near-term but sees potential in smaller names such as DP Abhushan, Thangamayil Jewellery, and PN Gadgil. He also favours Muthoot Finance, which benefits directly from higher gold prices through the increased value of its loan book. “I believe investors should focus on gold finance companies amid rising gold prices, as they stand to be the major beneficiaries,” he said.
On the flip side, Swastika Investmart maintains an ‘Avoid’ rating on Kalyan Jewellers, while LKP prefers sticking with larger, established players.
Stock Performance
Titan Company, the largest company by m-cap in the space, has seen its stock rally nearly 12% on a year-to-date basis. Other gainers include Thangamayil and Goldiam International, up 12% and 4%, respectively.
Laggards include Kalyan Jewellers, down nearly 35% over the same period. PC Jeweller shares have slipped nearly 20%, while PN Gadgil is down 12% YTD. Other prominent names, such as Rajesh Exports and Senco Gold, have also declined up to 32% since the beginning of the year.