Business Desk – Gold Jewelery Stocks: With the beginning of festive and wedding season in the country, shares of jewelery sector are on the radar of investors. Gold prices are at a high level, but demand is expected to remain strong due to festivals and weddings. According to market experts, customers are now giving preference to light weight jewelery instead of heavy jewellery, low budget options and buying new jewelery by exchanging old gold.
Apart from Titan and Kalyan Jewellers, investors are also eyeing Senco Gold and recently listed Lalita Jewelery Mart in this sector. Sales, revenue and profit figures of companies will tell how their business fares amidst expensive gold.
Demand expected to remain strong despite expensive gold
According to Ravi Singh, Chief Research Officer, MasterTrust, despite the high prices, the demand for jewelery may remain strong this festive and wedding season. Customers are choosing lighter jewelery and low-budget options. The trend of buying new jewelery by exchanging old gold is also helping in maintaining demand in the market.
Kranthi Bathini, director of Wealthmills Securities, says that due to changes in bond yields and interest rates, gold prices may remain in a range for some time. However, traditional shopping during festivals and weddings in India is expected to support demand.
The earnings of jewelery companies do not depend only on the sale of gold. The making charges taken for designing and preparing the jewelery are also a part of their earnings.
Jewelery market could be worth Rs 11.18 lakh crore by 2030
According to India Brand Equity Foundation (IBEF), India’s jewelery market can grow to Rs 11.18 lakh crore or about $ 130 billion by 2030.
The main reasons behind this growth are demand for Indian designed jewelery and diamonds in America, Britain and the Middle East, expansion of organized jewelery retail companies and increasing spending by domestic consumers.
However, it is not necessary that all companies get the benefit of this growth equally. Business expansion, costs and profit margins can affect the performance of companies.
Senco Gold: Targeting 20% value growth
According to Ravi Singh, Chief Research Officer, MasterTrust, Senco Gold’s valuation and revenue performance make it attractive for investors. According to him, the P/E multiple of the company is around 9.5 times.
The company has maintained the target of 20% value growth for FY 2027. Investors will keep an eye on how the company performs on the sales and profits front.
However, a low P/E in itself is not a guarantee that the stock will be cheap or will generate better returns. Before investing, it is important to assess the company’s earnings, business growth and current share price.
Lalita Jewelery Mart: Shares came down from record high
Kranti Bathini has also said to keep an eye on the recently listed Lalita Jewelery Mart. According to the given data, the company’s IPO came at an issue price of Rs 201 per share and was listed on NSE at Rs 265 on August 24. The stock had reached a record high of Rs 414.10 in early October. After this, it was trading at around Rs 361.85 with a decline.
According to experts, this stock can be monitored during the fall. However, the company’s upcoming quarterly results will clarify the real picture of its business. A stock cannot be considered cheap merely on the basis of decline from record high.
Eye on Titan and Kalyan Jewelers also
Titan and Kalyan Jewelers also remain among the favorite stocks of investors. The market will keep an eye on the sales, revenue and profits of these companies during the festive and wedding season. It will be important for investors to see how companies meet customer demand amid high gold prices. Light jewelry sales, new stores, operating costs and profit margins can impact their performance.
Overall, there is long-term growth potential in the jewelery sector, but the decision to invest in a stock should not be made only on the basis of festive demand or price decline. It is important to take into account the company’s financial results, valuation and risk.
Note: This article is based on market information and expert opinions, and not investment advice. Investing in the stock market is subject to risks.