Organised jewellery retailers to see average 20% growth in FY23: ICRA

By

Isabelle Crossley

Published
Jan 16, 2023

India’s organised jewellery retailers should see their revenue grow by an average of 20% in the 2023 financial year followed by around 10% in the 2024 financial year. The organised sector will outpace the industry as a whole over the medium term, according to ratings agency ICRA. 

Despite some moderation in margins, the credit profile of India’s organised jewellery retailers is expected to remain comfortable over the medium term, ICRA announced in a press release. The jewellery industry is shifting from unorganised to organised retail and established brands are expanding their retail presence to capitalise on these tailwinds. 

“The industry growth is likely to moderate to ~5% YoY in FY2024 due to the high base of FY2023, coupled with evolving macro-economic scenario,” said ICRA’s vice president and co-group head Kaushik Das in a press release. “Nevertheless, the revenue of organised jewellery retailers is likely to grow at a much higher rate of ~10% YoY in FY2024, supported by the accelerated shift in market share to the organised sector driven by tightening regulations, change in consumer preferences towards branded jewellery and planned expansion of organised jewellers into Tier 2 and tier 3 cities.”

With a stable industry outlook, ICRA expects the gold jewellery retail industry as a whole to record year-on-year growth of around 15% this fiscal. For its study, ICRA made estimates for its sample set of 15 major organised jewellers and concluded that the debt protection metrics and liquidity position of players in the sample set is expected to remain comfortable. This is supported by higher earnings projections on the back of improved scale of operations, despite the likely moderation in margins and part debt-funded store expansions being undertaken.
 
“Most organised jewellers have recommenced expansion with a focus on capturing the untapped market in Tier 2 and tier 3 cities in H1 FY2023,” said ICRA’s assistant vice president and sector head Vipin Jindal. “The total store count of ICRA’s sample set is expected to increase by ~10% in the next 12-18 months, which is expected to translate into market share gains and economies of scale.”