Jewellery stocks outshine Nifty as festive gold demand fuels optimism

Analysts are expecting 20 per cent more sales this festive season as compared to last year, and this is being reflected in the stock prices of jewellers. Over the last six months, jewellery stocks have returned on average 42 per cent compared to the Nifty 50 at 3.59 per cent. Gold prices during the same period are up 10 per cent to ₹144,600 per 10 grams in Mumbai. However, gold prices are still lower compared to their January levels of ₹175,000.

Sixteen jewellery stocks were flat on Monday, down 0.1 per cent on average, after rising 5.6 per cent over five sessions amid Diwali festivities. Over the last six months, the same stocks have returned 42% on average, a Business Standard analysis showed.

The stock price of Kalyan Jewellers rose 3.2 per cent to ₹611 on Monday, extending its gain over the past week to almost 21 per cent. The company will announce its results for the second quarter of financial year 2026-27 (Q2FY27) on Tuesday (November 10), and the Street expects the company to beat analysts’ consensus. The real test for the stock will be on Wednesday.

In its Q2FY27 business update with stock exchanges in October, Kalyan Jewellers said its consolidated revenue rose more than 26 per cent, with same-store sales up about 20 per cent in India.

Comparatively cheaper gold drew Diwali shoppers back and investors bet that listed chains will profit from Indians spending more on the yellow metal.

Since gold prices in the Mumbai market are down about 22 per cent from their January levels, the price correction helped boost sales during Dhanteras on November 6. The All India Gem and Jewellery Domestic Council estimated that gold sales by value rose 15-20 percent to about ₹60,000 crore compared to the previous year, though physical volumes remained largely flat.

The World Gold Council's third-quarter report showed the same split. Indian jewellery demand had dropped 20 per cent from a year earlier to 99.9 tonnes. Its value climbed 16 per cent to ₹1.49 trillion. In its consumer survey, 77 per cent of respondents planning to change or keep their buying habits said they would switch to lower purity or carat.

Titan said on November 5 that its jewellery business grew 24 per cent to ₹17,495 crore in July-September, excluding bullion and digital gold. With buyer numbers flat, bigger tickets drove growth. The quarter also included a one-time Customs duty gain of ₹490 crore.

“If the (West Asia) war continues, it is good for the dollar and not for gold," said Sanjiv Arole, a precious metals analyst. He noted that a stronger dollar and rising US inflation could push gold prices down, while investor demand shifts towards exchange-traded funds (ETFs) rather than physical jewellery—an outcome he doubts will benefit the jewellery trade.