Motilal Oswal bullish on jewellery stocks; picks Titan, Kalyan Jewellers as top bets, sees up to 34% upside

Domestic brokerage firm Motilal Oswal, in its latest report, said India's organized jewelry retail sector is set to accelerate further in the coming years, supported by two structural tailwinds — formalization and increasing premiumization.

The brokerage views Titan and Kalyan Jewelers as best positioned to benefit from these trends because of their scale, brand strength, store expansion, and execution.

Organized jewelry retail gains share

The sector's long-term growth thesis rests on two powerful structural tailwinds — formalization and premiumization. The organized segment's share of India's approximately ₹8.5 lakh crore jewelry market has nearly doubled to 40-45% in FY26 from 20-25% in FY19.

Leading retailers are expanding their customer base and increasing spend per customer through premiumization, omnichannel expansion, and a higher-studded jewelry mix. Titan, with around 43% of branded stores, and Kalyan Jewellers, with around 17%, together account for nearly 60% of the total organized jewelry retail footprint.

The brokerage expects organized leaders to further widen their competitive advantage through superior scale, sourcing capabilities, access to funding, and capital efficiency.

These structural advantages are becoming increasingly difficult for smaller and unorganized players to replicate, particularly in a volatile gold-price environment, reinforcing the ongoing shift towards organized retail.

Premiumization drives higher-value jewelry demand

Premiumization is emerging as the second key structural growth driver after formalization. Studded jewelry has become an important differentiator, with Kalyan Jewellers raising its studded mix to around 30%, from the mid-to-high teens a decade ago.

Titan has maintained a high 20% studded mix, compared with around 10-11% for Senco Gold and P N Gadgil Jewelers. The higher-studded mix supports structurally stronger gross margins through greater value addition and higher making charges.

Titan, Kalyan remain top jewelry picks

Motilal Oswal said it continues to prefer Titan and Kalyan Jewellers as its top picks in the jewelry sector, with a 'buy' rating on both and target prices of ₹6,000 and ₹800, respectively, which indicate an upside potential of 18% and 34.2%.

The brokerage also reiterated its 'buy' rating on P N Gadgil Jewellers with a target price of ₹800, while maintaining a 'Neutral' rating on Senco Gold with a target price of ₹430.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.