Gold jewellery sales should reverse trend of decline this fiscal: Crisil

By

Isabelle Crossley

Published
Sep 17, 2021

Gold jewellery sales are expected to grow by between 12% and 14% during the 2022 financial year and reverse two years of consecutive decline, thanks to stable gold prices and a move towards post-pandemic recovery.

A rise in consumer spending on gold jewellery, especially for weddings and festive occasions, has driven growth in the market, ratings business Crisil announced on Thursday, the Economic Times reported. Jewellery businesses can also expect to see their operating margin return to pre-pandemic levels of between 6.5% and 7% thanks to a stabilisation of gold prices, among other factors, according to Crisil.
 
Following an investigation into 86 fine jewellery retailers, Crisil found that most are experiencing a recovery in revenue and a stable credit outlook. The decrease in domestic gold prices enabled Indians to purchase more jewellery and pent up wedding demand due to recent lockdowns also led to higher sales. 

“This fiscal, revenue of organised jewellers is also set to benefit from lower import duty, and introduction of mandatory hallmarking, which will make them more competitive compared with unorganised players,” Crisil Ratings’ senior director Anuj Sethi said in a statement, the Press Trust of India reported. 
 
“Lockdowns in many states were localised and less stringent, and hence store closures were lower compared to the first wave,” said Sethi.

“Besides, pent-up demand from weddings (55% to 60% of overall jewellery sales) and festivals in later quarters will help resurrect revenue, just as they did last fiscal.”