Synopsis

Jewellery stocks surged significantly on Thursday, defying broader market weakness. Companies reported robust business updates for the April-June quarter, showcasing resilience. Senco Gold and Kalyan Jewellers posted strong revenue and same-store sales growth. Despite macroeconomic challenges, demand for organised players remained healthy. Investors are advised to focus on fundamentally strong, organised jewellery companies.

Kotak Securities is constructive on Sky Gold and BlueStone, citing their strong growth visibility.

Mumbai: Jewellery stocks rallied nearly 19% on Thursday, even as the broader market remained under pressure, after companies reported strong business updates for the April-June quarter despite a challenging backdrop.

Shares of Kalyan Jewellers surged up to 18.7% to touch ₹444.55, while Senco Gold and Sky Gold & Diamonds gained 6% each. PC Jeweller rose 2%. The Sensex and Nifty ended 0.3% higher each, after rising as much as 1% earlier in the day.

"The June-quarter updates were genuinely strong; Senco Gold posted 60% revenue growth with 38% same-store sales growth, Kalyan clocked 38%, and PC Jeweller grew 21% while cutting more than 90% of its settlement debt and guiding to debt-free status this quarter," said Gaurav Garg, research analyst at Lemonn.

Agencies

After tough start Shares surge up to 19%; investors told to focus on organised players

Brokerages said FY27 has been challenging for the gold jewellery industry because of macroeconomic pressures and seasonal demand weakness. Soaring oil prices, rising inflation concerns, and renewed bets on higher interest rates amid the West Asia crisis coincided with the once-in-three-years 'Adhik Maas' period - an extra month in the Hindu calendar during which weddings and some festive celebrations are traditionally deferred in many parts of the country.

Even with this impact, jewellery firms recorded healthy same-store sales growth, showing demand resilience and a continued shift towards organised players. Analysts advised investors to remain selective and avoid momentum chasing.

"The rally is largely value-driven due to higher gold prices rather than volume expansion," said Garg. "Investors to avoid chasing sharp moves while focusing on fundamentally stronger, organised players."

Gold prices and government policy will heavily influence near-term stock price movements, analysts said. "Jewellery stocks earlier corrected following adverse government policy measures and advisory," said Pankaj Kumar, VP-fundamental research, Kotak Securities. He also said that demand remains resilient and sees structural tailwinds intact for organised players.

Kotak Securities is constructive on Sky Gold and BlueStone, citing their strong growth visibility.

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