In FY2025, revenue growth for organised jewellers was driven largely by buoyant realisations, even as most players experienced volume contraction
Despite a projected decline in volumes, domestic gold jewellery consumption by value is expected to continue to exhibit double-digit growth in the current financial year (FY26), with an estimated increase of 12 to 14 per cent, as per a report by Icra. This is similar to the price-driven expansion seen in FY2025, when the sector registered a 28 per cent rise in value, largely attributable to a 33 per cent surge in gold prices.
According to Jitin Makkar, Senior Vice President and Group Head, Icra, “The sample of 14 large retailers—representing approximately two-thirds of the organised market—is expected to post revenue growth of 14–16 per cent YoY in FY2026. This will be supported by continued gold price appreciation, planned retail expansion, and market share gains from the unorganised segment. A higher number of auspicious days in the fiscal is also expected to lend some support to demand, despite elevated prices and declining volumes”.
It estimates domestic gold jewellery consumption volumes to decline by 9-10 per cent in FY2026, following the 7 per cent drop in FY2025, even as investment demand will remain resilient. Consumption of bars and coins had risen by 17 per cent and 25 per cent, respectively, in FY2024 and FY2025, reflecting investor preference for safe-haven assets amid global macroeconomic uncertainty and heightened geopolitical and trade tensions. This trend is likely to persist in FY2026, with demand for bars and coins likely to grow by around 10 per cent, accounting for 35 per cent of the total gold demand.
In FY2025, revenue growth for organised jewellers was driven largely by buoyant realisations, even as most players experienced volume contraction, except for a few that pursued aggressive store expansion. This pattern is expected to continue in FY2026, supported by the sustained cultural importance of gold, stable wedding demand and a good number of auspicious days. Gold prices are expected to stabilise at current levels, unless there are major global or geopolitical events influencing the price movements, following a sharp rally since Q4 FY2023, during which prices grew at a CAGR of 23 per cent through FY2025.
The asset-light franchise model continues to be the preferred expansion strategy for large jewellers, enabling faster scale-up with lower capital outlay. Collaborations with local partners provide market-specific insights while supporting capital-efficient growth.
Icra estimates the industry’s operating margin to expand by approximately 30 basis points (bps) to 7.2 per cent in FY2026, aided by scale efficiencies and favourable pricing. However, net margin expansion is likely to be constrained by rising financing costs. Interest coverage is projected to moderate to 5.6 times in FY2026, from 5.8 times in FY2025 and 6.1 times in FY2024, due to increased borrowings to fund higher inventory levels and a rise in gold metal loan (GML) rates by 300-500 bps in the recent period and by 130-150 bps on an annualised basis.
“Despite a projected 30 bps expansion in operating margins in FY2026, net margin expansion will remain limited within 10 basis points due to higher financing costs stemming from elevated GML rates and increased working capital borrowings driven by high gold prices and planned store additions,” Makkar added.
