Jewellery retailers’ revenue may grow 17-19% in FY25

Mumbai: Organised gold jewellery retailers are expected to clock 17-19 per cent year-on-year revenue growth in 2024-25, driven by higher realisations following a surge in gold prices, while volume is likely to remain steady, a report said on Wednesday. The revenue of organised gold jewellers is expected to rise 17-19 per cent this fiscal, while volume growth is likely to stagnate due to rising gold prices, Crisil Ratings said in a report.

The report further stated that the working capital requirements of retailers might increase due to higher inventory levels resulting from the substantial rise in gold prices and new store additions. However, credit profiles should remain stable, it added. The organised sector accounts for slightly more than a third of the market, with the highly fragmented unorganised sector making up the rest, it noted. Domestic gold price increased 15 per cent during FY24 and reached Rs 67,000 per 10 grams at the end of March 2024, Crisil Ratings said.

Gold prices inched up to about Rs 73,000 in April 2024, as gold kept its shine as one of the safer investment options seen by various central banks across the world as well as end consumers amid geopolitical uncertainties. “Apart from ramping up branding and marketing expenditure, retailers are likely to offer higher discounts to buyers even as they continue to expand product designs and offerings in a bid to attract customers amidst higher gold prices. We expect a shift to gold jewellery of lower carat and continued promotion of the gold exchange programme to support volume,” Crisil Ratings Director Aditya Jhaver said.

As a result, the share of gold exchange schemes is expected to rise from almost a third of the overall volume for most large retailers, the report added.