- Date : 23/12/2021
- Read: 4 mins
Indians’ love for gold is legendary. Here are some jewellery brands you can invest in.
India is the world’s second-largest consumer of gold. Therefore, it is no surprise that India's bullion and precious jewellery industry is on a significant growth trajectory.
The total jewellery market was estimated to be about $65 billion in FY 2019-20, of which $20 billion was ascertained to be from the organised sector. This ratio is expected to grow substantially, considering every mid-to large-scale brand is making huge investments to push sales through digital channels.
The overall industry is projected to show a Compound Annual Growth Rate (CAGR) of 11% over the next five years to reach $111 billion by FY 2024-25. Consequently, jewellery businesses that are publicly listed on the stock exchanges are expected to realise favourable valuations.
If you are bullish on the prospects of precious metals and jewellery becoming more valuable in the future, take a look at these four jewellery brands that could make a good addition to your investment portfolio.
Tanishq is one of the biggest and most trusted jewellery brands in India, with over 300 stores across the country. It also has an extensive digital channel presence. Tanishq is a subsidiary of Titan Ltd., a group company of the Tata conglomerate.
The Tanishq brand is renowned for its high-quality craftsmanship, wide range of jewellery options for varying budgets, and more importantly, assurance of purity and authenticity. The listed parent company (Titan) is considered a strong buy for long-term investors. It is a cash-positive business with a strong asset base and a low debt-to-equity ratio of 0.54%
The Titan stock has delivered an average return of 24% over the last 10 years.
2. Kalyan Jewellers
Headquartered in Kerala, Kalyan Jewellers is one of the oldest family-owned businesses in India, with its legacy dating back to 1908. Today, the listed jewellery brand has close to 150 stores in India and the Middle East.
The company has a loyal following owing to its strong understanding of local tastes and preferences. Its traditional designs showcasing Indian culture and heritage makes it a much-sought-after wedding jewellery brand.
Kalyan Jewellers was listed on the exchange earlier in 2021, and the stock performance is yet to be seen compared to its peers. However, the rapid sales growth over both offline and online channels show promise for the stock.
3. Rajesh Exports
Rajesh Exports is a multinational gold brand and finds a place amongst India’s Fortune 500 companies. It is touted to be the world’s only fully integrated gold business across the value chain - from mining to retail sales (under the Shubh brand).
In 2015, the company acquired the largest gold refinery in Switzerland and claims to process about 35% of all the gold manufactured in the world. Owing to this business advantage, Rajesh Exports is a possible long-term buy for investors interested in jewellery and lifestyle businesses.
Rajesh Exports was listed on the stock exchange in 2001 and delivered steady growth till about 2014 before skyrocketing almost 7X on account of the acquisition mentioned above. Since 2016, the stock has had numerous peaks and troughs, indicating cyclical activity.
In the last one year, the stock has delivered about 54% returns and continues to hold promise, given that the business has been steadily growing over the last five years, the impact of COVID-19 notwithstanding.
4. Asian Star Company
Asian Star is one of the leading manufacturers and exporters of diamonds and diamond jewellery. It is a key partner of the globally renowned De Beers group. While the brand does have a robust retail line of precious jewellery, its primary revenue comes from the specialised diamond cutting and polishing business for international markets.
The brand was listed on the bourses in late 1996, and its performance has been a mixed bag. Considering a significant chunk of operating revenue comes from international business, the performance has been choppy. Even on a daily basis, the stock does tend to have sharp price movements.
For someone who is clued into regular business activity, Asian Star offers a good opportunity for short-term trading.