Among major players, PC Jeweller has emerged as the biggest laggard, with its shares tumbling nearly 44% over the past year. Senco Gold has followed closely, declining over 43%, while Kalyan Jewellers has lost around 35%.
Recently listed firms have also struggled. PN Gadgil Jewellers is down about 15%, Bluestone Jewellery has slipped marginally, and Motisons Jewellers has witnessed a sharp fall of nearly 45%. In contrast, Titan and Thangamayil Jewellery remain notable exceptions, gaining 17% and 72%, respectively.
Why Gold Prices and Jewellery Stocks Are Moving Apart
Market experts cite three primary reasons behind the underperformance of jewellery stocks despite record gold prices. According to analysts, gold acts as a raw material cost rather than a direct profit driver for jewellery companies.
Rapid increases in gold prices raise working capital requirements and squeeze operating margins. This often forces jewellers to slow inventory replenishment and adjust pricing cautiously to avoid hurting demand.
Weak Volumes and Consumer Caution
Elevated gold prices have also dampened volume growth. Many consumers are delaying purchases or opting for lighter jewellery, particularly during weddings and festive seasons when price sensitivity is high.
However, strong brands such as Titan have managed to outperform peers due to better pricing power, efficient inventory management and robust hedging strategies that reduce exposure to price volatility.
Liquidity Stress and Rising Interest Costs
Tight liquidity conditions and higher borrowing costs have further strained jewellers with elevated debt levels. Inventory-heavy businesses are especially vulnerable when gold prices rise sharply, increasing financing needs.
The depreciation of the Indian rupee has compounded the challenge, making imported gold more expensive and complicating procurement decisions for retailers across the country.
Changing Consumer Preferences
Industry voices suggest buyer behaviour is evolving rather than collapsing. While some consumers are adopting a wait-and-watch approach, others continue to purchase gold as a long-term store of value.
There is also a gradual shift towards lower-karat jewellery, particularly 18kt and 14kt options for design-led and gifting segments.
Long-Term Outlook Remains Constructive
Despite near-term challenges, analysts remain optimistic about the long-term prospects of the organised jewellery sector. Industry estimates suggest the organised market could grow at a robust pace through 2030, driven by branded expansion into Tier-2 and Tier-3 cities.
Wedding-related demand is expected to remain a key structural driver, with annual wedding volumes staying broadly stable and average spending likely to rise alongside income growth.
Stocks to Watch
Market experts recommend a selective approach. Titan remains a preferred pick due to its strong brand, balance sheet strength and consistent operational performance.
B2B-focused players with lower retail risk and efficient manufacturing models are also being closely monitored by institutional investors for long-term opportunities.