Jewellery stocks are in focus as the sector heads into the festive and wedding season. Most of the jewellery stocks are trading in the green today, but there are a few significant names that are in the red.
Recent trends in the jewellery market indicate that the demand for jewellery is recovering after a softer period, primarily driven by relatively stable gold prices and retailers building inventory ahead of the festive season. Investors will be closely watching whether improving consumer demand can translate into stronger sales and earnings growth.
Gold prices remain a key factor for the sector. Currently, gold is trading at around Rs 1,63,079 per 10 gms on MCX, up by 0.15% from its previous close. Though higher gold prices help to increase the value of jewellery sales, they can also weigh on consumers' demand as higher prices make jewellery more expensive. Buyers have increasingly shifted towards lighter-weight and lower-carat jewellery, while exchange schemes, savings plans and flexible payment options are helping support purchases.
In the international market, spot gold price eased modestly 0.3% to $4,642.74 per ounce on Aug. 26 around 0410 GMT after peaking on Tuesday, since mid-May.
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Jewellery Stocks in Focus
As jewellery stocks are back in focus, Thangamayil Jewellery Ltd. leads the industry with its stock trading at Rs 5,478.5 apiece on NSE, gaining more than 1.5% on Wednesday. Despite today's rally, the stock has been down over a month, losing more than 20%, however rallied over 146% in the past year.
Sky Gold and Diamonds Ltd. follows with a 1% surge in its stock price, which is trading at Rs 850.5 apiece around 10.59 am today. The stock has rallied more than 179% in the past one year, and gained more than 30% in the past one month itself.
Kalyan Jewellers India Ltd. shares are also trading in the green but have only gained 0.1% today, and are currently at Rs 613.2 apiece on NSE. The stock has jumped nearly 23% in the past year, while gaining 6.8% in the past month.
Senco Gold and PC Jeweller, on the other hand, are trading in the red around 11 am today. PC Jeweller Ltd. lost around 0.4% to trade at Rs 10.96 apiece on NSE, while Senco Gold declined close to 2% in the early hours of Wednesday.
Both the stocks have been down over a year as well; while PC Jeweller lost 16.03% over a year, Senco Gold is 3.06% down over the past year.
Festive and Wedding Demands Ahead
In the upcoming days, the festive and wedding season will therefore be an important demand trigger for jewellers. Store expansion, same-store sales, customer footfall, average ticket sizes and margins will also remain key factors for investors, while the direction of gold prices will remain crucial for volumes.
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