Jewellery stocks such as Kalyan Jewellers, Titan Company and Senco Gold came under heavy selling pressure on May 11, with shares falling up to 10 percent after Prime Minister Narendra Modi urged citizens to avoid non-essential gold purchases for a year to help protect the country’s foreign exchange reserves.
The remarks, made on Sunday, formed part of a broader austerity appeal that included reducing fuel consumption, avoiding foreign travel, adopting Swadeshi products, cutting cooking oil usage, and encouraging natural farming.
Indian households remain among the world’s largest consumers of gold. According to Commerce Ministry data, gold imports surged 24 percent to a record $71.98 billion in FY26, compared with $58 billion in FY25.
The sharp correction in jewellery stocks reflects fears that Modi’s remarks could dampen discretionary demand, particularly in the wedding and festive segments that traditionally support jewellery sales.
Ajit Mishra of Religare Broking said volatility in jewellery stocks could continue in the near term amid geopolitical uncertainty and concerns over potential policy measures related to gold imports.
“If somebody has a short-term view, then this kind of volatility may continue. Traders may consider booking profits. But long-term investors need not panic, especially in fundamentally strong companies,” he said.
Mishra pointed out that companies such as Titan have continued to deliver strong earnings despite elevated gold prices. He added that organised jewellery retailers could continue gaining market share from smaller unorganised players over time.
Harshal Dasani of INVasset PMS said investors should avoid emotional reactions and instead focus on quality businesses during market corrections. According to him, the selloff is currently more sentiment-driven than structural.
Key concerns weighing on the sector include:
Possible slowdown in wedding-related demand
Lower showroom footfalls
Pressure on discretionary spending
Weak near-term sentiment towards gold-linked consumption
However, Dasani noted that jewellery demand in India has historically remained resilient because of its deep connection with weddings, festivals and household savings habits.
Analysts believe investors should differentiate between high-quality organised players and smaller speculative names.
Titan Company: Seen as the strongest long-term play due to its brand strength, premium positioning and diversified retail portfolio.
Kalyan Jewellers: Offers higher growth potential but with greater volatility.
Smaller jewellery companies may remain under pressure until sentiment stabilises.
Analysts advise against aggressive buying immediately after the sharp correction.
Market experts broadly recommend the following approach:
Long-term investors may continue holding quality jewellery stocks
Avoid panic selling after the sharp one-day correction
Use deeper declines for staggered accumulation
Short-term traders should remain cautious due to expected volatility
Watch for changes in consumer demand over the next two to three quarters
The coming quarters will likely determine whether Modi’s appeal causes a temporary sentiment shock or leads to a meaningful shift in consumer behaviour. For now, analysts believe organised jewellery retailers remain structurally stronger despite the near-term turbulence.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
(By arrangement with livemint.com)