Jewellery stocks were under pressure in Friday's trade, with Sky Gold & Diamonds, Senco Gold and Kalyan Jewellers among the key laggards. Investors are weighing the impact of elevated gold prices on jewellery demand, even as brokerages remain positive on the organised jewellery retail segment ahead of the festive and wedding season.
Sky Gold & Diamonds was trading at Rs 818.30 apiece, down 2.97%, leading the fall. Senco Gold declined 1.39% to Rs 357.70 apiece, while Kalyan Jewellers fell 1.37% to Rs 620.65 apiece.
Thangamayil Jewellery was down 0.45% to Rs 5,477.50 apiece, while PC Jeweller bucked the trend, gaining 1.73% to Rs 11.20.
Gold Prices, Profit Booking Weigh On Stocks
Friday's decline in gold price came after a recent strong run in bullion that has supported jewellery sales in value terms but has also increased affordability pressures for consumers.
The recent gains in several jewellery stocks could also have prompted some profit booking. Sky Gold, in particular, has seen a strong run, making the stock vulnerable to short-term selling after its recent gains.
However, there is no clear fresh company-specific negative trigger visible behind Friday's broad-based weakness in the stocks tracked. The moves appear to be driven more by profit booking and investor positioning amid volatile gold prices.
JPMorgan Remains Positive On Organised Jewellery Retail
Though gold prices and jewellery stocks are declining today, JPMorgan remains constructive on the organised jewellery retail market.
The brokerage expects jewellery demand to remain sustained through the second and third quarters, supported by an extended festive season, resilient wedding demand and retailer initiatives designed to acquire buyers and increase purchase occasions.
JPMorgan also highlighted gold-exchange programmes, lightweight and lower-carat jewellery and affordable everyday-wear collections as key strategies helping organised jewellers maintain consumer participation despite elevated bullion prices.
The brokerage expects margins to remain broadly range-bound, supported by premiumisation, operating leverage and efficiency measures.
Festive, Wedding Demand In Focus
The outlook for the sector remains supported by the upcoming festive and wedding seasons. The World Gold Council has also noted that jewellery demand has been strengthening, with retailers replenishing inventories ahead of the festive season.
For investors, the key watchpoints now are gold-price movement, festive-season demand, buyer growth and the ability of organised jewellers to protect margins despite elevated bullion prices. Friday's declines, therefore, do not necessarily alter the broader positive outlook for the organised jewellery sector.
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