India's organised jewellery industry is expected to witness revenue growth of 17 per cent in 2025-26 on wedding season and investment demand, said India Ratings report on Wednesday.

"The importance of gold in weddings, where it holds deep, sentimental, and cultural value, and as an adornment, will help largely maintain gold jewellery volumes, moreover, the investment demand is likely to be boosted by the prevailing global geopolitical and macro-economic uncertainty and the relative outperformance of the asset class," the report said.

Organised jewellers' credit metrics in FY26 are expected to be supported by rising scale and absolute profit coupled with the adoption of a new model for expansion.

In addition, improved funding availability will benefit the organised gems and jewellery industry, especially for players with high standards of corporate governance, the report said.

India Ratings expects operating profit margins to be range-bound during the fiscal due to competitive pressures necessitating discounts, higher advertising spends to ensure customer acquisition and start-up costs for new stores.

However, as new stores ramp up and achieve breakeven, it will support the operating margin with better absorption of operating cost.

Further, the expansion through franchise formats adopted by some players will result in improved credit metrics and help in deleveraging the balance sheets.

"We expect organised jewellers to continue to witness market share gains in FY26, owing to their trusted brand image, rising compliance costs and mandatory hallmarking.

The share of the organised sector in the Indian jewellery industry, which is valued at over Rs 6 trillion, increased to about 40 per cent in FY24 from 30 per cent in FY21, with a further gain of 10 per cent in market share to reach about 50 per cent by FY29," Ind-Ra Senior Analyst - Corporate Ratings, Preeti Kumaran said.

The increasing awareness among customers regarding hallmarked jewellery, growing reliance on trusted brands, and the ability of organised players to provide a variety of original designs have led to accelerated formalisation in the sector, the report added.

Published on January 15, 2025