Gold jumps 56%, silver 69% but jewellery stocks tumble 36% in 2025. Where is the money flowing? – News Air Insight

Gold and silver’s record rally in 2025 has buoyed bullion investors but hammered jewellery stocks, which have plunged 36% year-to-date. Domestic gold prices have surged 56% this year, while silver has soared 69%, as investors increasingly prefer ETFs and electronic forms of the metals over physical holdings.

An analysis of 14 jewellery stocks with market capitalisation above Rs 1,000 crore paints a grim picture. Kalyan Jewellers suffered the steepest fall of 36%, followed by Senco Gold and Motisons Jewellers, down 35% and 32%, respectively.

Other notable losers include Renaissance Global, Sky Gold and Diamonds, Tribhovandas Bhimji Zaveri, Rajesh Exports, PC Jeweller, Asian Star Company, Radhika Jeweltech, and D.P. Abhushan, which has slipped between 4% and 30%.

Meanwhile, a few names bucked the trend, with Goldiam International, Titan Company, and Thangamayil Jewellery posting modest gains of 0.5%-10%.

Bluestone Jewellery and Lifestyle, which listed on August 19 this year, is trading 20% above its listing price of Rs 517. In contrast, shares of Shanti Gold International have dipped below their listing price of Rs 227.55, though still above the issue price of Rs 199, currently trading around Rs 205.

What’s ailing jewellery stocks?

While festive demand is reviving physical gold purchases, soaring bullion prices have dampened appeal, prompting consumers to opt for lower-karat jewellery. Silver, though relatively cheaper, has also seen rapid price rises, weighing on buyer sentiment.Market expert Anuj Gupta attributes the decline in jewellery stock prices to high bullion rates, forecasting retail demand could fall 20–25% this season, impacting company earnings. Kranthi Bathini, Director-Equity Strategy at WealthMills Securities, notes a growing investor shift toward ETFs and electronic gold over physical holdings, which are primarily used for consumption rather than investment.

ETFs and gold mutual funds allow investors to own fractional units of gold without large upfront payments, while avoiding storage hassles and theft risks. Kavita Chacko, Research Head, India, at the World Gold Council (WGC), highlighted strong inflows and lower redemptions in gold ETFs.

In August, inflows to gold ETFs surged 74% month-on-month to Rs 2,190 crore from Rs 1,256 crore in July, according to AMFI data. Investor interest is also reflected in a 42% year-on-year increase in folios, rising to over 80.33 lakh by August 31, 2025, compared with 56.60 lakh a year ago. Month-on-month, folios increased by 1.64 lakh, up over 2%.

Analysts, bullish on gold and silver at the start of 2025, now see the metals trading at unprecedented levels, Rs 1.2 lakh per 10 grams for gold and Rs 1.47 lakh for silver. Most had earlier expected 10–15% growth, following strong gains over the past five years.

The fall in jewellery stock prices came despite most companies reporting strong Q1 numbers.

Senco Gold and Sky Gold & Diamonds stood out, with profit after tax (PAT) soaring 104.12% and 105.33%, respectively, supported by robust sales growth of 30.09% and 56.46%. Kalyan Jewellers India maintained momentum, posting a 48.73% rise in PAT alongside a healthy 31.49% increase in revenue.

Others, like D.P. Abhushan and Goldiam International, recorded strong operational showings, with PAT growth of 45.23% and 52.50%, respectively. Titan Company, the sector bellwether, reported a 52.59% increase in PAT and 21.20% growth in sales, underscoring its resilience amid a challenging market environment.

However, not all players shone. Rajesh Exports posted a massive 180% decline in PAT despite a 117.95% surge in sales, reflecting margin pressure. Renaissance Global and Thangamayil Jewellery reported profit contractions of 57.15% and 19.18%, respectively. Bluestone Jewellery & Lifestyle saw a 43.08% drop in profit, even as sales climbed 41.47%.

Some companies showed modest growth. PC Jeweller’s PAT rose 3.76% on an 80.71% increase in sales, while Asian Star Company’s profitability grew 10.62% despite a 5.62% decline in revenue. Shanti Gold International posted a striking 174.02% jump in PAT, backed by 22.07% sales growth, signaling improving margins and operational efficiency.

Experts predict mixed prospects for Q2. Gupta sees a direct impact of rising gold and silver prices on earnings, while Bathini expects companies to face margin pressure in September and subsequent quarters if bullion prices continue to climb.

Gold vs jewellery stocks

Kavita Chacko of the World Gold Council (WGC) expects demand for gold to strengthen during the peak festive period (October–December), aided by sustained investment interest, wedding- and occasion-related jewellery purchases, and potential consumption tax cuts. “However, elevated prices, and any renewed surge, may curb overall demand,” she warns.

For jewellery stocks, Nilesh Jain of Centrum Broking sees no clear trend and advises investors to avoid the segment for now. Gupta of Ya Wealth expects further downside for jewellery stocks, while remaining bullish on gold and silver. Bathini of WealthMills considers the sector overcrowded due to too many listed companies, recommending investors focus on established names like Titan and Kalyan.

Titan’s diversified business gives it an edge over its peers. In its Q2 business update, the company reported 19% YoY growth in its jewellery segment. CaratLane outpaced Tanishq, Miya, and Zoya with 30% growth versus 18% for the latter. A total of 34 new jewellery stores were added in the quarter.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)