India jewellery stocks surge up to 40% on strong Q1
A sharp rally in Indian jewellery stocks driven by resilient first-quarter demand underscores a structural shift toward organised retail, though stretched valuations now hinge on sustained earnings delivery.
India's listed jewellery companies have surged as much as 40% in the past month, defying broader market headwinds after delivering stronger-than-expected June quarter updates. Kalyan Jewellers led the sector with a 40% gain, followed by Sky Gold at 25% and Thangamayil Jewellery at 24%, according to ACE Equity. Titan Company climbed 14%.
The robust performance caught markets off guard, as analysts had braced for a softer quarter due to the Adhik Maas period and macroeconomic uncertainty. Instead, same-store sales grew healthily. "A key driver was the ~18% correction from peak gold prices and the return of price stability," said Anil R, Senior Research Analyst at Geojit Investments.
For market professionals, the rally signals that the long-term shift from unorganised to organised retail is accelerating. The unorganised sector still accounts for 60% of India's jewellery industry, leaving significant room for established players to capture market share through transparent pricing. Analysts note that premiumisation and higher penetration of studded jewellery are supporting sustainable revenue growth.
Brokerages are largely backing market leaders to sustain this momentum into the seasonally stronger second half of the year. International brokerage Nomura maintained its Buy rating on Titan with a target price of Rs 5,000. "We view Titan as a key beneficiary of the rising affluent and elite income population in India, with sales growth at 1.5-2x GDP of India over the medium term," the brokerage said.
Alternative strategies are also emerging within the sector. Citi and ICICI Securities favour Kalyan Jewellers, pointing to its asset-light franchise model and assigning target prices of Rs 750 and Rs 670 respectively. Meanwhile, Preeyam Tolia of Choice Institutional Equities argues B2B manufacturers like Shanti Gold are better placed to outperform because they can scale without heavy capital expenditure on store expansion.
However, the rapid repricing means valuations are no longer inexpensive. Future returns will depend entirely on actual earnings delivery rather than sentiment. Investors will now focus on management commentary, the behaviour of gold prices, and festive season footfalls to determine if the June quarter marked a structural upturn or merely a temporary reprieve.
