Even though Indian gold retailers sold less jewellery in the March quarter as soaring prices forced shoppers to cut back on purchases, higher rates helped prop up their revenues.
Jewellery buyers typically stick to fixed budgets, buying smaller quantities when prices are high, executives said. “When prices are low, the volume will be higher. When the prices are high, the volume will be lower,” Ramesh Kalyanaraman, executive director at Kalyan Jewellers, said during the company’s quarterly analyst call.
Gold prices hit an all-time high of approximately ₹1,69,349 per 10g (24K) following the US-Iran war at the end of February, about 80% higher than the same period the previous year. On 11 May, the price of 24-carat gold stood at ₹15,192 per gm.
The sharp rise in prices weighed on consumption volumes. India’s gold jewellery volumes declined 19% year-on-year to the second-lowest first-quarter on record since 2000, said the World Gold Council's Gold Demand Trends: India Focus Q12026 report. “In contrast, value demand rose 47% on-year to a record ₹99,900 crore, highlighting higher overall spending despite lower volumes,” the report added.
Indian jewellers, to cushion demand and protect margins, leaned on lightweight designs, lower-carat products, and studded jewellery, helping maintain healthy top-line growth.
For the March quarter, Titan Co. Ltd reported an 80.5% on-year rise in consolidated revenue, while Kalyan Jewellers posted a 66.2% increase and P N Gadgil Jewellers recorded a 124% jump in revenue.
Profit growth was also strong despite lower volumes. Titan reported a 35.4% increase in net profit, Kalyan Jewellers posted a 118% rise, while Bluestone Jewellery and Lifestyle swung back to profitability.
Some like P N Gadgil Jewellers even managed to buck the trend, reporting a 27% jump in gold volumes, the company said in its quarterly update.
However, with Prime Minister Narendra Modi urging citizens to postpone gold purchases to help the country conserve foreign currency, Indian jewellers face additional pressure on demand.
Demand woes
Jewellers continued to get a steady demand from wedding purchases during the quarter. “We've also seen an advancement in wedding purchases. Because people were anxious that it could go up even beyond. And those who have weddings in their families in the first quarter of FY27 also ended up coming in the months of February and March,” said Arun Naryanan, chief executive, jewellery, Titan.
Beyond weddings, companies launched schemes to boost demand and ensure accessibility, even as prices surged. “Our rapid realignment of entry-level offerings leveraging our vertically integrated model enabled us to restore price accessibility without compromising design or experience,” said Gaurav Singh K. Ushwaha, founder and CEO of BlueStone Jewellery and Lifestyle.
The measures included exchange schemes, 18-carat gold jewellery, 14-carat studded jewellery, and jewellery purchase plans, said Narayan of Titan. He added that the light-weight category was becoming popular among customers. During Akshaya Tritiya 2026, Titan launched “Hues", a new collection featuring gemstones set in 18-karat gold.
Kalyan, meanwhile, is focusing on its Candere portfolio, which has better margins. Of the 150 stores it plans to open in FY27, about 50 to 55 will be Candere outlets, according to management.
Studded jewellery incurs higher manufacturing costs and allows greater use of lower-carat gold, helping retailers protect margins while keeping prices accessible. Candere has gross margins in the mid-30s, with a studded ratio of 70%. Kalyan's overall portfolio had a studded ratio of about 31% in the quarter.
Rising gold prices also prompted the government to act. In July 2025, the Centre authorized and made mandatory Bureau of Indian Standards hallmarking for 9-karat gold jewellery.
Margin squeeze
However, the price rise is already squeezing margins. Titan’s Ebitda (earnings before interest, taxes, depreciation, and amortization) margin contracted to 7.2% from 10.7% a year ago.
“If gold remains at the current rate, it is sustainable,” said Ashish Sonthalia, chief financial officer at Titan. He said the company is adopting various methods to prop up demand, such as reengineering, lightweight jewellery, exchange offers, and lower-carat products, to retain customers. “But beyond that point, there will be an impact on margin. And that is visible. Some 10, 20 basis points, we have been kind of losing,” he said.
Analysts are cautious. “In the event of a continued rise in gold price in 2026-27, the elevated top-line growth should continue, albeit with some margin pain on account of a weaker revenue mix and competitive pressure,” analysts at Emkay Global Financial Services said about Titan’s Q4 results on 11 May.
“On the other hand, a stable gold price or a minor gold-price correction in FY27 would bring in fence sitters, along with likely muted demand for investment-focused gold coins,” the analysts added.
Beyond margins, working capital could also be affected. “The higher (gold) prices will also push up working capital borrowings for purchasing inventory for existing and planned stores,” Crisil Ratings said in an industry report on 23 April 2025.