Jewellery consumption in India poised to rise 10-12 per cent due to surge in gold prices in FY24: ICRA 

This development is marked by a festive period considered auspicious for purchasing precious metals 

Mumbai: The consumption of jewellery in terms of value, in India, is anticipated to increase by 10 to 12 per cent in the current fiscal year, according to a report by ICRA (formerly Investment Information and Credit Rating Agency of India Limited set up in 1991 by leading financial and investment institutions as an independent investment Information and credit rating agency). This development is due to a surge in gold prices, the report was quoted as saying.  

ICRA gave an upgraded outlook for growth in domestic jewellery consumption, in value terms, in FY 2023-24 fiscal year of 10-12 per cent, against earlier estimates of 8-10 per cent. 

This trend is marked by a festive period considered auspicious for purchasing precious metals, and elevated gold prices. 

The report underlined that gold prices remained volatile between December 2022 and April 2023, and then continued to be relatively stable in the first half of FY24. However, the prices remained higher by 14 per cent than average prices during the corresponding period a year earlier.  

These high prices supported revenue boost in most jewellery retailers amid muted volume growth. It stated that the current tensions in the Middle East and the changing global macroeconomic environment could keep gold prices high in the near term.  

The report further said that jewellers of the organised market are predicted to clock healthy revenue growth of 15-18 per cent on a YoY basis in FY24, because of planned retail expansions and a gradual change in consumer preferences towards branded jewellers. 

“The organised jewellery retailers are expected to outperform the industry over the medium term supported by tailwinds from accelerated formalisation of the industry,” ICRA VP and Sector Head, Sujoy Saha, was quoted as saying. 

“The momentum is likely to continue over near to medium term with an estimated increase in store count by 18-20 per cent YoY in FY24, supporting their revenue growth,” Saha added. 

The ICRA report said that the operating margins of the organised players are also projected to experience some moderation in the current fiscal year, due to the front-loaded operating costs for planned store additions and elevated advertising expenses amid increasing competition.  

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