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M.R. Subramani

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Chennai Feb. 11 If the efforts of the gold and jewellery companies for the Valentine's Day bear fruit, it could help firms that are listed on the stock exchanges to perform better.

Already, these companies have turned in an better performance in the third quarter of the current fiscal.

Tracking records

Investors could well begin to track the fortunes of companies such as Titan Industries, Gitanjali Gems Ltd, Rajesh Exports and Su-Raj Diamonds.

In the third quarter, Titan reported a 155 per cent jump in net profit, while Gitanjali Gem nearly doubled it.

Rajesh Exports came up with a 45 per cent rise in profit, while Su-Raj's net increased over 30 per cent.

On the stock exchanges, these scrips have performed well and are currently near their 52-week high.

Gold prices are ruling above $650 an ounce and indications are that the rates are unlikely to witness any sharp fall in the near to medium term.

In fact, analysts are seeing gold scaling $850 with a period of two years.

Prices impact

Will high prices put away consumers and, thereby, affect the bottomline of these companies?

The answer is simple.

If these companies can perform so well when prices are ruling high, then they should continue to do well.

Gold is always seen as a tool for long-term investment, a hedge against inflation and geo-political risks.

Gold appetite

Appetite for gold in India never ends. With inflation now above 6.5 per cent, we can expect people to look at gold for investment.

With prices of agricultural products being high, it is quite possible that farmers and growers could be left with enough cash to spend on jewellery.

Taking into account the fact that jewellery forms an integral part of Indian marriages, these stocks should continue to perform well.

Therefore, any positive movement in gold jewellery during the week should pep up the fortunes of these listed companies.

More Stories on : Gold & Silver | Strategy | Stocks | Gems & Jewellery | Events

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