MUMBAI: Indian gold retailers navigated a tough April-June quarter after duty hikes and religious factors impacted the sector, slowing revenue growth from the previous quarter, when business was healthy on the back of high prices.
“Gold price volatility also led to a cautious ‘wait-and-watch’ approach among consumers across regions and segments,” the World Gold Council said in a report on 18 June.
Titan Company Ltd’s jewellery business grew 39% year-on-year in the April-June quarter, according to its quarterly update, compared with 46% growth in Q4 of FY26. Kalyan Jewellers reported a 38% revenue growth in the quarter against 66% growth in Q4 of FY26.
The first quarter started on a high note with Akshaya Tritiya, which was on 19 April this year. An estimated 18 to 20 tonnes of business was recorded around that day, according to Rajesh Rokde, chairman of the All India Gem and Jewellery Domestic Council. That compares with about 16 tonnes last year.
However, this momentum was soon disrupted. On 10 May, Prime Minister Narendra Modi advised Indians to postpone gold purchases for a year to help conserve foreign exchange reserves during the West Asia conflict. Three days later, the government increased the total effective import duty on gold and silver to 15% from 6%. This was followed by the sacred period of adhik maas from 17 May to 15 June.
“Adhik maas is a once-in-a-three-year phenomenon during which wedding-related demand tends to take a pause in certain parts of the country,” Kalyan Jewellers said in its quarterly update.
This slowdown was visible in same-store-sales-growth (SSSG) numbers for some companies. Kalyan Jewellers reported a 28% SSSG in Q1 compared with 47% in Q4 of FY26.
The upcoming wedding season is expected to lift sentiment.
Demand outlook
“We remain positive on the demand outlook, supported by the recent correction in gold prices, which is expected to encourage jewellery purchases ahead of the upcoming wedding season,” PNGS Reva Diamond Jewellery said in its quarterly update.
“Q2 FY27 is expected to be seasonally softer, while consumer demand will be driven by monsoon and festivals like gold booking for Q3,” Senco Gold Ltd said in its quarterly update.
Gold prices have cooled.
“In 1QFY27, average gold prices rose 59% YoY (vs ~80% YoY in 4QFY26) and remained broadly flat QoQ,” analysts at Motilal Oswal Financial Services said in a 6 July report. Gold prices have fallen 30% from $5,600 ( ₹2.04 lakh per 10 g) in January to trade below $4,000 internationally.
Retailers are relying on exchange of old gold jewellery to drive sales. About half a million customers exchanged more than 11,000 kg of gold at Titan in the past nine months, Arun Narayan, chief executive officer of Titan’s jewellery division, told Mint. Kalyan Jewellers said 46% of its sales in Q1 came from the exchange of old gold, while Senco estimated it to be about 43% in the quarter.
However, companies had to roll out extensive advertisements to promote their gold exchange programmes, which could affect margins.
“There won't be any bump up in profitability, but we might see a contraction in profitability in the year due to higher discounting and promotional expenses,” said Rahul Guha, senior director at Crisil Ratings.
Analysts expect other factors also to put margins of top players under pressure in the first quarter.
“Considering the high growth in gold coins and plain gold jewellery aided by Akshaya Tritiya, we expect domestic TMZ (Tanishq, Miya, Zoya) margins to experience marginal pressure y-y but remain within its band of 11-11.5% (vs 11.8% in 1Q26),” analysts at Nomura Group said in a 6 July report about Titan's jewellery business. Mia and Zoya are new-age brands under Titan's jewellery business.
Sales volumes
Experts have predicted a tough year ahead in terms of volume growth. Retail gold jewellery volumes are expected to decline 13-15% in FY27, according to analysts at Crisil Ratings. Additionally, players with business in West Asia were also affected.
“Within the Middle East specifically, we witnessed revenue growth of approximately 30% for Q1 FY2027 as compared to Q1 FY2026 driven predominantly by same-store-sales-growth despite the impact on footfall during the month of April due to the geopolitical tensions in the region,” Kalyan said in its quarterly update.
In March, Mint reported that Tanishq had paused plans to expand stores in West Asia due to the conflict.