Page 31 - Bullion World Volume 04 Issue 07 July 2023

Bullion World | Volume 3 | Issue 7 | July 2023

Indian Organised Jewellery Retailers

set to outpace Industry Growth in FY2024

Authors:

Mr Vipin Jindal, Assistant Vice President & Sector Head, ICRA Limited
Mr Raunak Modi, Senior Analyst, ICRA Limited

ICRA expects the organised jewellery
retailers in India to continue to
outpace the industry in FY2024,
aided by planned store additions
by a majority of large jewellery
retailers and market share gains due
to accelerated formalisation of the
industry. Its sample set of 12 major
organised jewellers1 is projected to
record a revenue growth of ~12-
15% YoY in FY2024, despite a high
base and evolving macro-economic
environment, against the expected
industry growth of 8-10% YoY. In
Mr Raunak Modi Mr Vipin Jindal
terms of profitability, operating
margin of ICRA’s sample set is likely
to remain comfortable and stabilise uncertainties and evolving domestic high base, evolving domestic inflation
at around 7.5-8% over the next inflation. Nonetheless, the strong and volatility in gold prices.
two years. With the debt protection cultural affinity of Indians to gold is
metrics and liquidity position of likely to support festive and wedding While ICRA projects the operating
players in the sample set expected demand for gold jewellery. margins of organised players to
to remain comfortable, supported Most jewellery retailers in ICRA’s witness some moderation in FY2024
by higher earnings on the back of sample are estimated to have owing to higher operating costs
improved scale of operations, the recorded revenue growth in excess for new stores and increasing
industry outlook is Stable. of 15% YoY on Akshaya Tritiya 2023. competition, the benefits of
The aggressive retail expansion economies of scale and likelihood of
ICRA projects the industry growth by most players during FY2023 inventory gains for some jewellers
to moderate to 8-10% YoY (in value along with a steep increase in gold in FY2024 are likely to support the
terms) in FY2024 with volume prices (~10-12% higher YoY in operating margins in the range of
growth likely to remain constrained April 2023) are likely to have aided 7.5-8% over the coming years, higher
by expected volatility in gold prices revenue growth while volume growth than the average levels of ~6.5%
amidst global macro-economic remained muted in the light of the witnessed before the pandemic.

1 ICRA’s sample includes Titan Company Limited, Kalyan Jewellers India Limited, Jos Alukkas Group, Joyalukkas
India Limited, Senco Gold Limited, Thangamayil Jewellery Limited, M/s. Purushottam Narayan Gadgil, P.N. Gadgil &
Sons Limited, Lalithaa Jewellery Mart Private Limited, P C Chandra Group, Bhima Jewellers Trivandrum Group and
Bhima Jewels Private Limited.

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