Listed jewellery companies including Titan Company, Kalyan Jewellers, PN Gadgil Jewellers, Thangamayil Jewellery, and Senco Gold have gained 2-20% over the past week compared with 4-40% drop over a three-month period. Fluctuating gold prices continue to be a double-edged sword for jewellery retailers. While higher prices boost revenue, they also impact affordability leading to softer volume growth. However, demand, among other factors, also depends on seasonal factors such as weddings and festivals.
Notwithstanding short-term price pressures, jewellery retailers are doubling down on expansion strategies, signalling confidence in long-term demand. Kalyan Jewellers plans to open 170 new stores in FY26, with 45 stores expected by the end of the March 2025 quarter. Titan added 46 new stores in the December quarter, bringing the total count to 1,055. PN Gadgil is targeting 25 store additions in FY26, including 10 outlets under its new format, LiteStyle by PNG, which aims to attract younger customers with modern designs.
While store additions prepare companies to take advantage of future demand, the success of this strategy also depends upon the sales traction for each store. The sector shows a mixed trend in same-store sales growth (SSSG). For Kalyan Jewellers, SSSG grew by 16% year-on-year in the third quarter, up from 11% in the year-ago quarter. In contrast, Thangamayil’s SSSG declined to 18.5% from 25.7%, while Senco Gold’s SSSG dropped to 14% in the nine-month period ended December 2024 from 17% in the year-ago period.
Retailers expect demand to remain strong for upcoming festive events like Gudi Padwa and Akshaya Tritiya, as well as wedding-related purchases. Kalyan Jewellers observed stable customer footfall in January, indicating that the market is gradually adapting to elevated gold prices.
