Amid rising gold prices and growing optimism surrounding a potential India-US trade deal, jewellery stocks are coming into focus for investors in the Indian stock market. Analysts suggest that the outlook for these stocks could improve due to the favorable sentiment surrounding the trade discussions. However, the ability of a company to withstand increasing gold prices will play a critical role in determining which stock might yield higher returns, making the selection process essential and complex.
When evaluating leading jewellery companies like Titan, Kalyan Jewellers, and Senco Gold, several financial indicators, market positioning, and growth potentials are crucial for investors. Senior Research Analyst Seema Srivastava from SMC Global Securities emphasized the importance of assessing resilience against fluctuating gold prices, along with each company’s financial performance.
Titan appears to have a solid financial foundation, reporting ₹60,456 crore in revenue and an operating profit of ₹5,694 crore for fiscal year 2025. The company boasts a return on equity (ROE) of 32% and experienced a staggering 52% increase in profit in the first quarter of FY26, attributed to a 24.5% rise in sales.
On the other hand, Kalyan Jewellers displayed promising growth with a 48.5% increase in profit for Q1 FY26, amounting to ₹264 crore. However, it does face operational challenges stemming from the volatility of gold prices. Meanwhile, Senco Gold reported modest growth, with a lower ROE of 10%, adversely affected by higher inventory levels and extended working capital days, impacting overall margins.
Srivastava outlined key considerations for investors during this period of economic uncertainty:
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Gold Price Volatility: Elevated gold prices have transformed consumer buying patterns, leading to a shift toward lighter, studded, or alternative jewellery options.
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India-US Trade Deal: The potential trade agreement could alleviate export challenges and indirectly benefit Indian jewellery exporters, contributing to long-term growth.
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GST Reforms: Recent adjustments to the Goods and Services Tax provide more predictability for the sector, and reductions in rates across other areas could enhance consumer spending power.
When discussing which jewellery stocks investors should target, Srivastava pointed out that Titan seems to be a more stable investment choice due to its robust financial position and strong market presence. In contrast, Kalyan Jewellers offers growth opportunities but comes with significant operational risks. Senco Gold, while a niche player, is likely to provide more modest returns.
From a technical analysis perspective, An Shul Jain, Head of Research at Lakshmishree Investment, provided insights into market movements. Kalyan Jewellers appears to be weak on the technical chart, forming a bearish flag pattern amid selling pressure, indicating cautious sentiment for traders. Senco Gold’s shares are currently stabilizing within a range of ₹321 to ₹407, with a breakout needed to signal a potential rally. Titan, however, stands out, with strong institutional volumes and aggressive long positions, along with a favorable 140-day cup-and-handle pattern indicating overall strength. A successful breakout from this technical configuration could enable a significant price increase, targeting around ₹4,200.
Investors should weigh their options carefully and consider not only the fundamental metrics of these jewellery stocks but also their own risk tolerance before making investment decisions.
