Value over volume to drive jewellery growth in H2 amid higher gold prices

December quarter results for the sector are expected to be in similar lines to the September (Q2) quarter

Jewellery makers are set to post strong revenue growth in the 2025-26 (FY26) October–December quarter (Q3), supported by a robust wedding season and rising value growth, even as volumes decline. Brokerages also expect the second half of FY26 to outperform the first. The average return of the three largest listed players is over 27 per cent, led by Thangamayil Jewellery, which has risen more than 59 per cent, followed by market leader Titan Company at 19 per cent.

 

Q3 results for the sector are expected to mirror the July–September (Q2) performance. Key metrics such as like-for-like growth, ticket size, and store additions showed healthy trajectories in Q2, according to Centrum. Titan and Kalyan Jewellers both reported strong double-digit growth (25–29 per cent), supported by gold price inflation.

 

For Q3, BOB Capital Markets expects its jewellery universe revenue to rise 28 per cent year-on-year (Y-o-Y), buttressed by strong festival demand in October and steep gold price gains, which were up 63 per cent Y-o-Y and 22 per cent sequentially. Thangamayil (up 82 per cent Y-o-Y) and Kalyan (up 35 per cent) are expected to lead growth, while Senco Gold (up 20 per cent) may underperform the sector.

 

Rising competition from smaller and unorganised players could trim operating margins by 20 basis points, as these players often pass inventory gains to customers during a period of rising gold prices.

 

Higher gold prices, however, favour the larger listed players amid ongoing sector consolidation. Analysts at Prabhudas Lilladher, led by Amnish Aggarwal, observe that elevated gold prices are accelerating consolidation and easing competitive pressure on national chains.

 

Unorganised jewellers, which account for 53 per cent of the market, face challenges including bulk inventory costs, limited hedging, and constrained liquidity, delaying design refreshes and store expansions.

 

This scenario benefits large, organised players with stronger sourcing and working-capital structures, allowing them to maintain a wide design range. With discounting pressures easing, Prabhudas Lilladher expects Titan’s jewellery margins have likely bottomed out. The company is projected to deliver sales and net profit growth of 16.1 per cent and 20.6 per cent, respectively, over FY26 through 2027-28. The brokerage has a ‘buy’ rating on Titan with a target price of ~4,397.

 

The second half of FY26 is expected to enjoy further demand tailwinds, driven by a higher number of weddings compared with last year, though auspicious wedding dates are down Y-o-Y. This is likely to support high double-digit sales value growth, even as elevated gold prices constrain volumes.

 

Store additions in the sector could slow down due to higher capital expenditure requirements and stretched balance sheets resulting from rising gold prices.

 

Analyst Utkarsh Nopani of BOB Capital Markets expects companies with a high share of franchise revenue, low leverage, high hedging ratios in volatile gold markets, and strong return on capital employed to grow faster over the long term. PN Gadgil Jewellers is his preferred pick among the listed players.