Jewellery sales may grow by 40% in Akshaya Tritiya

Even as gold prices ruled high, jewellers are expecting business to grow by up to 40% during Akshaya Tritiya, a festival considered auspicious for buying the metal, on increased consumer confidence, market experts said today.

"The consumer mood is very upbeat despite the price touching a new peak of over Rs 23,000 per 10 grams last week. With this positive market sentiment we expect the business to grow by 40% in value terms," All-India Gems and Jewellery Trade Federation (GJF) Chairman Bachhraj Bamalwa told PTI here.

Prices of gold have gone up by up to 25% since Akshaya Tritiya last year and looking at the present positive consumer sentiment, we expect the jewellery sales within 15% in terms of volume, he said.

Gold prices, which ruled at about Rs 22,815 per 10 grams on April 30 in Mumbai, touched an all-time high of Rs 23,175 per 10 grams in Delhi.

In international markets, gold climbed to a record high of $1,570.60 an ounce in day-to-day trading.

Echoing the view, Gitanjali Group Chairman Mehul Choksi said the consumer confidence in gold is very positive during Akshaya Tritiya, which falls on May 6 this year.

"We are expecting a 40% growth in jewellery sales in terms of value and 15% in volume," he said.

A former Chairman of the GJF, Ashok Minawala, opined that Akshaya Tritiya has proved a strong event for gold as a commodity since last few years.

Minawala said even if business in volume terms remained the same as last year, in value, the growth will be at least 30% more due to the rise in price.
    
"Value is more important on the occasion as consumers are limited with a budget and spend a certain amount even if that fetches less volume," he said.
    
Shree Ganesh Jewellery House Chairman Nilesh Parekh said that price is not a determinant for jewellery sales.
    
"As long as the price of the yellow metal is increasing and giving good returns the demand will remain. This year the sales will go up by 30% in value. However, in terms of volume the sales may remain same as last year," he said.
    
Unbranded jewellery is likely to do robust business during this season compared to the branded ones, as there was an additional central excise duty imposed on them in the Union Budget 2011, he said.
    
Kotak Mahindra Bank, which offers gold coins, is also expecting robust business this year.
    
"Our Akshaya Tritiya sale has started with a good note. During this season, we are expecting a sale of about 130 kg, which would be 60% higher than last year's sales of 80 kg. Though gold prices have increased over 25% from last Akshaya Tritiya, there is a strong demand as people are expecting further appreciation in prices," Kotak Mahindra Bank Executive Vice-President Puneet Kapoor said.
    
The bank, which has 2-3% market share in the total organised gold coin selling pie, is offering coins in five denominations like 5 grams, 8 grams, 20 grams, 50 grams and 100 grams during this season.