Helping You Build Wealth With Honest Research
Since 1996. Try Now


Login Failure
(Please do not use this option on a public machine)
  Sign Up | Forgot Password?  

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

An Emerging Opportunity for Investors
India's Lithium Megatrend

**Important: We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
**By submitting your email address, you also sign up for Profit Hunter, a daily newsletter from Equitymaster
covering exciting investing ideas and opportunities in India.


Top 5 Jewellery Stocks in India by Growth

Mar 29, 2023

Top 5 Jewellery Stocks in India by Growth

Indians just love purchasing jewellery. Be it for weddings, self-consumption or gifting purposes, we end up purchasing at least one piece of jewellery in a year.

Growing disposable income, unending demand for gold (and Indian people's love for Gold 😊) are some of the major growth drivers for the jewellery industry in India. Gold is deeply ingrained in the Indian culture and lifestyle.

Earlier, most of the gold purchases used to happen through the unorganized market, but now with urbanization and the greater spread of designer products, the focus has shifted to organized jewellery players.

According to a report by the World Gold Council (WGC), India is one of the largest consumers of gold jewellery in the world. The Indian gems and jewellery market is expected to grow at a compound annual growth rate (CAGR) of 8.3% between 2023-2027. This augurs well for the organized players.

Keeping that in mind, we have shortlisted the five best jewellery stocks in India. These jewellery and jewellery related companies have recorded the highest growth in their revenue and profit.

#1 Goldiam International

First on the list is Goldiam International.

The company is engaged in the business of manufacturing and exporting gold and diamond jewellery to global retailers.

Its products include engagement rings, wedding bands, bridal sets, and earrings made of natural and lab-grown diamonds.

The company exports to multiple countries, including US, UK, Dubai, China, and Russia. It follows the omnichannel model for selling its products through offline and online stores.

In 2021, the company also launched its own website for its B2B (business to business) segment. Prior to that in 2020, it had acquired a majority stake (88%) in Eco-Friendly Diamonds to expand its lab-grown diamond business.

At present, lab-grown diamond sales account for only 3% of the overall jewellery sales in the US. They are expected to grow to 10% by 2030. The company's increased effort towards this segment is justified as it generates high operating margins (45-50%).

To add to this, the company is planning a capex of Rs 100 million (m) for enhancing its lab-grown diamond capacity.

As of February 2023, its order book stands at Rs 1.5 billion (bn).

Coming to its financials, the revenue has more than doubled in the last five years, driven by higher demand. The net profit has also gone up by five times, mainly due to the company's backward integration efforts across the lab-grown diamonds supply chain.

As a result, the company's return on equity (RoE) and return on capital employed (RoCE) have improved substantially to 20.4% and 28.7%, respectively.

Despite its acquisitions and aggressive capex plans, the company continues to remain debt-free.

The smallcap company also consistently pays dividends to its shareholders and has carried out six share buybacks in the last six years.

Goldiam International Financial Snapshot (2018-2022)

Particulars (Rs m) FY18 FY19 FY20 FY21 FY22
Total Revenue 3,304 4,642 3,866 4,132 7,124
Growth   40.5% -16.7% 6.9% 72.4%
Operating Profit 256 559 443 941 1,302
Operating Profit Margin 8.0% 12.5% 12.2% 23.2% 18.9%
Net Profit 202 466 453 671 1,060
Net Profit Margin 6.3% 10.4% 12.4% 16.5% 15.4%
Source: Equitymaster

Going forward, a healthy order book, growing demand for lab-grown diamonds, along with company's growth plans will drive its revenue.

To know more, check out Goldiam International's financial factsheet and its latest quarterly results.

#2 Titan Company

Second on the list is Titan, a Tata Group company.

You probably guessed this company at the start when you opened this article as that's the brand image Titan has created over the years...from a Tata group penny stock to a behemoth which contributes significant chunk of revenues for the Tata group, Titan has come a long way.

It is the largest jewellery retailer in the country, with a 7% market share as of December 2022. Titan sells jewellery through brands such as Tanishq, Mia, Caratlane, and Zoya.

The company has a strong retail presence with over 685 stores across India.

It is also the world's fifth largest and largest watch player in India and sells watches through brands such as Titan, Fastrack, Sonata, and Xylys.

The company also has a joint venture (JV) with Monto Blanc and has licenses for several international brands such as Coach, Kenneth Cole, Police, and Tommy Hilfiger.

Apart from these, Titan also sells eyewear and perfumes under different brand names.

Being one of the largest jewellery players in the country, the company has quite a few growth plans.

It established a 100% subsidiary in the USA to expand international business, especially for Tanishq Jewellery.

Titan is also concentrating on improving its market share through high-visibility marketing, inventory infusion, and competitive pricing.

Apart from its jewellery business, Titan is expanding its watches and eye care businesses through store expansion.

It has launched Taneria (an Indian dress wear brand) and Irth (a fashion accessories brand) in the last five years.

What's commendable is that the Tata group company is managing all this with zero debt on its books.

With all these efforts, little should you wonder about Titan's performance...

In the last five years, Titan's revenue has grown at a compound annual growth rate (CAGR) of 12.4%, driven by growth across all segments. The net profit has grown at a CAGR of 14.8% during the same time.

The company boasts of strong return ratios with ROE at 23.6% and ROCE at 33.6% as of FY22.

There's more. Titan has consistently paid dividends. Its average dividend payout ratio for the past five years comes to 30.5%.

Titan Company Financial Snapshot (2018-2022)

Particulars (Rs m) FY18 FY19 FY20 FY21 FY22
Total Revenue 161,725 199,636 212,050 218,310 290,370
Growth   23.4% 6.2% 3.0% 33.0%
Operating Profit 16,253 19,872 24,630 17,180 32,830
Operating Profit Margin 10.1% 10.0% 11.7% 7.9% 11.4%
Net Profit 11,019 13,887 14,930 9,740 21,980
Net Profit Margin 6.9% 7.0% 7.1% 4.5% 7.6%
Source: Equitymaster

Going forward, strong expansion plans are expected to drive revenue and profitability.

To know more about Titan, checkout its factsheet and latest quarterly results.

To know more, check out Titan's financial factsheet and its latest quarterly results.

#3 Ethos

Next on the list is Ethos, India's largest luxury watch company.

The company has a market share of 13% in the retail market for premium and luxury watches.

The company follows the omnichannel model to sell its premium watches. They sell their watches through their own stores, multi-brand stores, mono-brand boutiques, and online channels.

In India, they have over fifty stores spread across seventeen cities.

It has exclusive contracts with 60 premium and luxury watch brands. Some of its well-known brands include Omega, Tissot, Rado, Louis Moinet, Longines, and Balmain.

At present, the company is concentrating on increasing its offline presence through store expansion. The goal is to increase its visibility in India.

In line with its goals, the company plans to build 13 new stores and renovate 6 stores with the proceeds it received from a successful IPO (initial public offering) in 2022.

Apart from watches, the company is also looking to expand product offerings and include luxury products such as eyewear, jewellery, luggage, cosmetics, and writing instruments in its retail portfolio.

Coming to its financials, the company's revenue has grown at a CAGR of 10.5% in the last five years driven by higher demand. The net profit has jumped by 42.4% during the same time on a CAGR basis!

The RoE and RoCE at the end of the financial year 2022 stand at 10.1% and 20.4%, respectively.

Ethos Financial Snapshot (2018-2022)

Particulars (Rs m) FY18 FY19 FY20 FY21 FY22
Total Revenue 3,579 4,451 4,610 4,030 5,901
Growth   24.4% 3.6% -12.6% 46.4%
Operating Profit 170 362 554 427 717
Operating Profit Margin 4.8% 8.2% 12.1% 11.1% 12.4%
Net Profit 40 134 -13 48 234
Net Profit Margin 1.1% 3.0% -0.3% 1.2% 4.1%
Source: Equitymaster

Going forward, the growing portfolio of exclusive brands and increasing demand for luxury watches will drive revenue and profit.

To know more, check out Ethos' financial factsheet and its latest quarterly results.

#4 Thangamayil Jewellery

Fourth on the list is Thangamayil Jewellery, one of the leading jewellery retailers in India.

Based out of Tamil Nadu, the company sells gold, silver, diamond, and platinum jewellery.

It has four manufacturing facilities with in-house goldsmiths to craft jewellery according to the latest trends.

As of July 2022, the company operates 52 stores with a strong presence in Tier II and Tier III cities of Tamil Nadu, a state with the largest share of India's gold consumption.

Thangamayil Jewellery is planning to increase its store space through brownfield expansion. It has allocated Rs 100 m for capex for upgrading all the stores.

This move could increase its debt-to-equity ratio, which is currently at 0.3x.

In the last five years, the company's revenue has grown at a CAGR of 9.8%, driven by an uptick in gold prices and a revival of demand. The net profit has grown by 10.9% on a CAGR basis during the same time.

The RoE and RoCE for the financial year 2022 stood at 11.9% and 18.2%, respectively.

In the recent quarterly results, the company's revenue grew 18% year-on-year (YoY) while net profit grew by 22.1%.

Thangamayil Jewellery Financial Snapshot (2018-2022)

Particulars (Rs m) FY18 FY19 FY20 FY21 FY22
Total Revenue 13,772 14,462 16,950 18,270 21,947
Growth   5.0% 17.2% 7.8% 20.1%
Operating Profit 593 706 977 1,410 862
Operating Profit Margin 4.3% 4.9% 5.8% 7.8% 3.9%
Net Profit 229 303 457 866 385
Net Profit Margin 1.7% 2.1% 2.7% 4.8% 1.8%
Source: Equitymaster

Going forward, the company's strong position in the key gold market of India, and store expansions are expected to drive its revenue and profit.

To know more, check out Thangamayil Jewellery's financial factsheet and its latest quarterly results.

#5 Vaibhav Global

Last on the list is Vaibhav Global.

The company is involved in the e-retailing of fashion jewellery, accessories, and lifestyle products like watches, hair accessories, and home decor.

It has a unique business model consisting of TV-based and website-based operations that helped the company create a niche for itself in the global retail market.

Through its subsidiaries, Vaibhav Global operates three 24-hour TV channels and e-commerce websites in two of the largest economies of the world - the US and the UK.

The company has its own manufacturing units in India, which cater to almost 70% of its jewellery requirements. The rest of its jewellery requirements and other products are sourced from its established supplier based across the world.

In the financial year 2022, the company forayed into the German market through which it also serves the Austrian market.

It has also invested Rs 3 bn in capex to set up new headquarters in the US, upgradation of IT infrastructure, warehouse robotics automation, and upgradation its channel position in the UK.

The company also acquired Encase Packaging in 2022 to strengthen its supply chain network and lower its costs.

Despite incurring such high capex, it continued to retain a debt-free status mainly due to its high cash flows.

In the last five years, the company's revenue has grown at a CAGR of 11.9% driven by healthy growth in sales volume and new product launches. The net profit also grew by 16.1% during the same period.

The return ratios for the financial year 2022 are 21.3% (RoE) and 24.7% (RoCE).

Vaibhav Global Financial Snapshot (2018-2022)

Particulars (Rs m) FY18 FY19 FY20 FY21 FY22
Total Revenue 15,811 18,281 20,010 25,578 27,743
Growth   15.6% 9.5% 27.8% 8.5%
Operating Profit 1,484 2,033 2,618 3,702 3,096
Operating Profit Margin 9.5% 11.2% 13.2% 14.6% 11.2%
Net Profit 1,125 1,542 1,903 2,718 2,371
Net Profit Margin 7.2% 8.5% 9.6% 10.7% 8.6%
Source: Equitymaster

Going forward, new product launches, its entry into the German market, and an established presence in TV shopping channels will drive its revenue and net profit.

To know more, check out Vaibhav Global's financial factsheet and its latest quarterly results

Why should you invest in jewellery stocks?

Be it a festival or an event, we Indians have a knack for spending big money on gold.

While every Indian wedding is unique in its own way, jewellery plays a major role with some estimates that families spend as much as 20% of the wedding budget on jewellery.

With the big fat Indian wedding season upon us, jewellery stocks seem like a very lucrative investment option.

However, it must be noted that the demand for jewellery is seasonal, and the revenue of these companies depends on the demand.

Moreover, a sudden rally in gold prices or unfavourable economic conditions could impact consumer spending, indirectly affecting these stocks.

Treat jewellery stocks with the same amount of caution as you would treat other stocks.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...


Which are the top Jewellery companies in India?

Based on marketcap, these are the top jewellery companies in India:

You can see the full list of jewellery stocks here.

Which are the top gainers and top losers within the jewellery sector today?

Within the Jewellery sector, the top gainers were SKY GOLD (up 5.0%) and ZODIAC JRD (up 5.0%). On the other hand, KENVI JEWELS (down 3.7%) and RAJESH EXPORTS (down 2.2%) were among the top losers.

How should you value jewellery companies?

Investing in stocks requires careful analysis of financial data to find out a company's true worth. However, an easier way to find out about a company's performance is to look at its financial ratios.

Two commonly used financial ratios used in the valuation of stocks are -

Price to Earnings Ratio (P/E) - It compares the company's stock price with its earnings per share. The higher the P/E ratio, the more expensive the stock.

Price to Book Value Ratio (P/BV) - It compares a firm's market capitalization to its book value. A high P/BV indicates markets believe the company's assets to be undervalued and vice versa.

Equitymaster requests your view! Post a comment on "Top 5 Jewellery Stocks in India by Growth". Click here!