National News

Rising gold prices to shave a tenth off organised retailers’ volumes

Revenues to still grow in double digits; credit profiles supported by higher operating margins

Published

1 year ago

April 23, 2025

The continued rise in retail gold prices to an all-time high is expected to reduce the sales volume of organised gold jewellery retailers by 9-11% in fiscal 2026. However, with prices and realisations expected to be significantly higher on- year, revenues will still grow 13-15%.

This comes on the back of four straight years of more than 20% revenue growth, which has seen the industry grow 2.5 times since fiscal 2021. Volume, however, has remained subdued with consumers purchasing smaller quantities amid budget constraints due to higher prices.

An interplay of multiple factors is visible amid the continually rising gold prices. For one, as demand wanes, retailers are pushing sales through promotions and discounts amid increasing penetration in Tier 2 and 3 cities. The resultant increase in costs, however, will be more than covered by jewellery getting sold at prices higher than the purchase and making prices. Thus, operating profitability will rise 30-40 basis points (bps) on-year, driven by inventory gains.

The higher prices will also push up working capital borrowings for purchasing inventory for existing and planned stores. Nonetheless, leverage will remain under control and debt protection metrics healthy, supporting credit profiles.

A Crisil Ratings analysis of 60 gold jewellery retailers, which account for a third of the revenue of the organised jewellery sector, indicates as much.

In fiscal 2025, retailers took a 4-5% hit to volume as gold prices soared ~25% on-year (refer to Chart 1) amid geopolitical and economic concerns. As of mid-April 2025, gold prices are already ~20% higher than the average price in fiscal 2025. Thus, even if the prices move up only 4-5% from here, the average price will still be up 22-24% on-year for fiscal 2026.

Says Himank Sharma, Director, Crisil Ratings, “The recent jump in prices came just before the start of the festive and marriage seasons in the first half of April 2025, limiting the impact on demand thus far. However, as ticket sizes for buyers are likely to remain constant, caratage and grammage may reduce, as seen in the last four fiscals, impacting volumes. The demand, though lower, remains supported by duty cuts on gold imports announced last year.”

As such the implementation of Goods and Services Tax and Bureau of Indian Standards hallmark continue to push customers towards organised retailers, supporting revenue growth. Higher realisations will push another year of double- digit revenue growth for organised retailers, resulting in revenues of Rs.4.5-5.0 lakh crore for the industry.

Says Gaurav Arora, Associate Director, Crisil Ratings, “Despite the increasing debt, the capital structure of gold jewellery retailers will remain comfortable. Improved revenues and operating profitability will absorb the impact on debt protection metrics as well with median interest coverage seen healthy, over 6 times in fiscal 2026.”

The higher prices will have a two-way impact on retailers. One, with jewellery sold at prices higher than the purchase prices, resulting in an inventory gain of 20-30 bps, we expect the operating margin to break the declining trend of the last two fiscals and inch closer to the seven-year average of 7.8-8.0% in fiscal 2026 (refer to Chart 2). Two, the debt of gold jewellery retailers rated by Crisil Ratings will rise as the cost of inventory replenishment as well as new store inventory rises with higher prices, although higher revenue and profitability will provide cash flow towards store expansion.

That said, any sharp volatility in gold prices, changes in government regulations and import duties on gold, and consumer sentiment will bear watching.

National News

Belgian Consul General H. E. Mr. Pierre Stverlynck Graces BDB Annual Day

Published

12 hours ago

October 19, 2026

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Event marks 42 years of Incorporation and 16 years of Operations
Recently-appointed Consul-General’s first visit to the Bourse helps strengthen a century-old bond
Long service awards presented to outstanding employees

Bharat Diamond Bourse today marked 42 years of incorporation and 16 years since the commencement of operations at the BDB Complex in BKC with a special programme graced by H. E. Pierre Stverlynck – Consul General of Belgium in Mumbai as Chief Guest and a number of leading diamantaires.

The function was organised to celebrate the crucial roles played both by the visionaries who conceptualised the need for a centralised infrastructure to boost the diamond trade over four decades ago, and the employees who have run the daily operations in a highly efficient and professional manner.

In his Welcome Address, BDB Vice President, Mehul Shah explained the significance of celebrating twin milestones – 42 years of incorporation and 16 years of operations. He said:

“BDB began with a vision and is now the world’s largest operational bourse, and a symbol of India’s leadership in the diamond world and excellence in every aspect of operations.”

He added, “It is significant that the Consul General of Belgium is with us on this special occasion. Antwerp and Mumbai have a very close relationship, going back more than 100 years. Today the two cities have bonds based on trust, trade and friendship. We are committed to strengthening this bond over the next century as well.”

Congratulating the awardees he said that members may be the owners, but it is the staff who run the complex and have helped build it as the “best of the best” centres for diamonds. “Personal integrity combined with hi-tech surveillance have made BDB one of the safest places in the world,” he explained, and urged all present never to forget that “it is the soldiers who fight and win the wars.” Mr Shah offered compliments to all the awardees and congratulated Team BDB.

Speaking on the occasion, Anoop Mehta, President BDB, welcomed Mr Stverlynck who has recently assumed charge as Consul General of Belgium in Mumbai.

“We are sure that this will be the first of many visits to our Bourse,” he said, noting that the Consulate is the nearest neighbour of the complex.

“The BDB leadership has always enjoyed a very special relationship with the Belgian consulate,” he added, “built on the longstanding bonds between the diamond industry in our two countries.”

Mr Mehta said it was heartening that so many employees had remained loyal to the BDB for multiple years, and urged all gathered to reach out through their department heads to put forward suggestions for further changes and improvements

Mr Stverlynck, who was on his first visit to the Bourse after assuming charge as Consul General, said he was extremely impressed with the facilities available for exporters within the complex. Assuring the trade of cooperation and support, he said he was happy to be personally present to celebrate such a remarkable institution as BDB that has become a key pillar of the India diamond industry.

Congratulating the leadership for its role in steering the bourse, as well as those employees who had received long service awards, Mr. Stverlynck said:

“The consolidated knowledge and experience of so many from those at the top to a number of others who contributed in various ways, is an asset to the industry.”

Special long service awards were presented to employees who completed special milestones during the year. These included 30-year, 25-, 15-, 10- and 5-year service awards to a few employees.