India's Organised Jewellery Market: A Golden Future

India's organised jewellery industry is poised for a 17% revenue growth by 2025-26 due to increased wedding and investment demand. The expansion through franchise formats and growing trust in organised brands is expected to raise the market share to 50% by FY29.

The organised jewellery sector in India is projected to experience a 17% revenue growth in 2025-26, driven by wedding season demands and investment interests, according to a new report by India Ratings.

Gold's cultural importance in weddings and its status as a valuable asset during uncertain times have cemented its role in maintaining jewellery volumes. Investment interest is spurred by global uncertainties and the asset class's strong performance, the report suggested.

Rising scale, absolute profit, and an expansion through franchising are expected to bolster organised jewellers' credit metrics. As industry players adopt higher corporate governance standards, funding opportunities are set to enhance, particularly for those with reputable brand images.

While competitive pressures may cap operating profit margins, especially with necessary discounts and advertising costs, the establishment of new stores promises a margin boost as they reach breakeven. Franchise expansion will also aid in improving credit metrics and reducing balance sheet leverage.

Overall, the sector's market share grew from 30% in FY21 to 40% in FY24 and is anticipated to hit 50% by FY29. This growth is attributed to increasing consumer awareness about hallmarked jewellery and the trust in organised brands offering a diverse range of original designs.