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Mint
04-06-2025
- Business
- Mint
Titan to Kalyan Jewellers: Is it wise to buy jewellery stocks amid soaring gold prices? EXPLAINED
The rising gold prices act as a double-edged sword for jewellery stocks, as they can lead to inventory gains but dent demand, which could impact the profitability. With gold prices once again eyeing the ₹ 1,00,000 mark in the spot market, the spotlight is back on the jewellery companies like Titan, Kalyan Jewellers and Senco Gold, which have showcased a mixed performance so far in 2025. While the market leader Titan has gained 7% year-to-date (YTD) amid a 26% rally in gold prices, other top jewellery stocks – Kalyan, Senco and Motisons – have lost between 28% and 40%. However, despite the mixed show, analysts remain largely positive on the branded jewellery players. They believe that while the short-term outlook is hazy, these companies will continue to do well in the long run, given strong demand and a shift towards organised players. Sky-high gold prices create a complex landscape for jewellery companies, said Vinit Bolinjkar, Head of Research, Ventura. While high gold prices can boost revenue for companies dealing in gold jewellery due to higher per-unit sales value, they also suppress consumer demand for physical jewellery, particularly in price-sensitive markets. In India, jewellery demand slumped 25% YoY in volume in Q1CY2025, he observed. However, despite the slump in demand, ICRA projects domestic gold jewellery consumption by value to continue to exhibit double-digit growth in FY2026, with an estimated increase of 12-14%. This trend, ICRA said, is similar to the price-driven expansion seen in FY2025, when the sector registered a 28% rise in value, largely attributable to a 33% surge in gold prices. The current fiscal year is expected to follow a similar trajectory. According to Jitin Makkar, Senior Vice President and Group Head, ICRA, 'ICRA's sample of 14 large retailers—representing approximately two-thirds of the organised market—is expected to post revenue growth of 14–16% 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.' These estimates come, even as ICRA expects domestic gold jewellery consumption volumes to decline by 9-10% in FY2026, following the 7% drop in FY2025. However, ICRA added that investment demand (coins and bars) will remain resilient. According to a Reuters report, quoting CFO Ashok Sonthalia, Titan's jewellery business, which accounts for nearly 90% of its total revenue, is expected to grow between 15-20% in FY26 amid demand from affluent Indians. Further explaining the impact of rising gold prices, Boljinkar said, "Most organised jewellers use average-cost accounting, so a rising gold curve fattens reported gross margins until prices plateau. Each $100/oz move in gold adds roughly 60-80 bps to operating margin in the following quarter for inventory-heavy players such as Titan and Kalyan." The bullish outlook by analysts is further driven by the organised jewellery sector's robust Q4 FY25 performance, despite the record-high gold prices. Titan Company led the pack with a ~19% year-on-year rise in jewellery revenue, while net profit climbed 13% to ₹ 871 crore. Despite elevated input costs, the company maintained its double-digit EBIT margins and announced plans to open 40–50 new Tanishq stores in FY26 to deepen its footprint beyond metro cities. Kalyan Jewellers reported a 37% jump in revenue to ₹ 6,182 crore, with PAT up 36% to ₹ 188 crore, driven by a 25% surge in same-store value and aggressive expansion across North and West India. Senco Gold, with a stronghold in Eastern India, logged a 19% increase in revenue and an impressive 94% growth in PAT to ₹ 62 crore. The company attributed its performance to vibrant wedding-season demand and a higher contribution from diamond jewellery, with non-East stores now accounting for 18% of total sales. Regional player Thangamayil Jewellery also saw revenue grow to ₹ 1,381 crore with a net profit of ₹ 31 crore, highlighting the resilience of rural demand amid rising gold prices. According to CA Jashan Arora, Director, Master Trust Group, said that many players have shown some concerns about elevated gold prices, which have increased working capital requirements and intensified competition, particularly from unorganised players. "Despite these challenges, branded jewellers have shown resilience, leveraging their reputation for quality and brand value to capture market share from smaller competitors. The recent shift in what consumers prefer, leaning towards organised players, along with a strong demand for gold jewellery, paints a bright picture for the market. That said, seasonal trends and a higher baseline from the festive quarter have slowed down growth a bit. This means investors should keep an eye on companies that have solid balance sheets and smart hedging strategies to handle any short-term challenges," said Arora. He added that a possible drop in gold prices could, in fact, encourage retail purchases, boosting topline growth for jewellery companies. Sneha Poddar, VP - Research, Wealth Management, Motilal Oswal Financial Services, also remains positive on jewellery stocks amid rising disposable income, shift to organised players and demand for regular-wear (beyond wedding and investment led). "As per industry estimates, the jewellery market is expected to see 15-16% CAGR to reach USD145b by FY28, with organised/formal market likely to deliver +20% CAGR to reach 42-43% of the total market. Several Indian jewellery companies have continued to perform well in Q4FY25 despite high gold prices, suggesting a selective buying opportunity in jewellery stocks with preference towards quality brands with scale and balance sheet strength," said Poddar. Commenting on which jewellery stocks to buy, Boljinkar said companies like Titan Company could be a strong long-term bet. "The company has the largest market share in wedding and everyday jewellery, omnichannel. At 45X FY28 P/E, the stock looks optically expensive but justified by 20% earnings CAGR and strong balance sheet," he added. Disclaimer: This story is for educational purposes only. 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.
Mint
01-06-2025
- Business
- Mint
Expert view: Can Nifty 50 surpass 26k in June? 5 stocks to buy for next 1 year and more
Expert view on markets: Vinit Bolinjkar, Head of Research at Ventura Securities, says India's healthy economic growth, robust corporate earnings and steady inflows from domestic institutional investors have supported the Indian stock market. He, however, is cautiously optimistic about the domestic market for June 2025. In an interview with Mint, Bolinjkar shares his views on markets, key triggers and five stocks to buy for the next one year. Here are edited excerpts of the interview: The Nifty 50 is demonstrating notable resilience, having recently surpassed the significant 25,000 mark in late May 2025. This strength is underpinned by several positive domestic factors: India's healthy macroeconomic indicators, robust corporate earnings from the recent quarter showing continued momentum, and steady inflows from domestic institutional investors. Further bolstering sentiment, the RBI announced a substantial record dividend of ₹ 2.69 lakh crore to the government in May 2025, and the monsoon season has commenced, reportedly on an early to normal schedule according to IMD. Looking towards June 2025, the outlook remains cautiously optimistic. While the market digests recent gains, further upward movement towards the 26,000 level would be a significant next step. The Indian equity market enjoys several structural tailwinds. These include strong GDP growth, stable fiscal and external accounts, buoyant high-frequency indicators like GST collections and PMI, and strong domestic liquidity from mutual fund SIPs. Additionally, the government's capex push and formalisation of the economy continue to support long-term growth. However, there are notable headwinds, too—elevated valuations, especially in mid- and small caps, pose risks of correction. Global concerns like US inflation, uncertainty around rate cuts, and geopolitical tensions can also trigger volatility. Furthermore, rural consumption remains under pressure due to weather uncertainty and high food inflation, which could weigh on consumption-driven sectors. Lastly, election-related volatility could lead to short-term swings in sentiment. The recent rally in mid and small-cap stocks has been significantly supported by retail and HNI participation, evident from surging volumes and mutual fund inflows into small-cap schemes. However, it is not just retail froth—there is genuine earnings growth in many companies, especially those linked to manufacturing, defence, railways, and infrastructure. Several promoters have increased their stakes, suggesting long-term confidence. That said, valuations in many pockets are rich and call for careful stock selection. While the broader index might seem expensive, opportunities still exist in under-researched companies with strong balance sheets, good governance, and clear earnings visibility. Investors must stay selective and avoid chasing momentum blindly. Q4 earnings were largely in line with street expectations, but there were positive surprises in some pockets. Banks and NBFCs continued their strong performance with healthy loan growth, stable asset quality, and robust NIMs. Capital goods and industrial companies reported strong order books and execution, while the auto sector delivered margin improvement, aided by lower input costs. On the flip side, IT services disappointed due to weak discretionary tech spending and delays in deal ramp-ups. Consumer staples saw sluggish rural demand, and some cement players struggled with weak pricing trends in certain regions. Among PSUs, select companies like NTPC, BEL, and BHEL surprised positively, triggering earnings upgrades and valuation re-ratings. Overall, earnings growth remains broad-based, with cyclicals and investment-driven themes outperforming. Yes, India's long-term structural growth story remains compelling and globally attractive. Driven by a young population, rapid digital adoption, formalisation of the economy, and a shift in global supply chains towards India (China+1, Europe+1 strategies), the country is well-positioned to sustain 6–7 %+ real GDP growth. The government's continued thrust on infrastructure, PLI-linked manufacturing, and digital financial inclusion is a further enabler. Investors looking at long-term themes can participate through sectors such as private banking, capital goods, real estate, renewables, and defence. Additionally, focused bets in mid and small-cap companies with niche capabilities can generate alpha. Building a diversified portfolio across these structural themes, with a three to five-year view, remains an attractive investment strategy. HBL Engineering is gaining traction in defence electronics and railway safety systems, benefiting from India's infrastructure and indigenous defence push. Strong order visibility, operating leverage, and niche capabilities support earnings growth. Thomas Cook is benefiting from a rebound in outbound travel and a strong recovery in MICE and forex services. Operational efficiency and a strong brand recall offer room for margin expansion and earnings growth. Adani Green is a leader in renewable energy with strong capacity expansion and long-term PPAs ensuring cash flow visibility. Deleveraging efforts and India's clean energy focus make it a structural long-term play. Welspun Living is witnessing export recovery and expanding in domestic branded home textiles. Easing raw material costs and diversification into newer geographies support earnings and margin improvement. India's largest private bank, HDFC Bank, remains a core holding with a strong deposit franchise, superior asset quality, and rising traction from its merger with HDFC Ltd. Read all market-related news here Read more stories by Nishant Kumar Disclaimer: This story is for educational purposes only. The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions, as market conditions can change rapidly, and circumstances may vary.
Time of India
13-05-2025
- Business
- Time of India
Nifty's 2025 twist: Are Indian stocks headed for another record-breaking year?
At the start of 2025, the Indian equity markets faced a clouded outlook. Concerns over high valuations, persistent foreign institutional investor (FII) outflows, trade wars painted a cautious picture. Then came the India Pakistan tensions, which went out of control for a brief period. However, as we approach mid-year, a confluence of positive developments has shifted the narrative, prompting once gloomy analysts to reassess their projections for investor returns. Benchmark Nifty has surged almost 17% from the lows, setting the stage for another recording breaking year, according to analysts. Geopolitical easing and trade advancements A significant turning point was the de-escalation of tensions between India and Pakistan, culminating in a ceasefire agreement. This move alleviated investor concerns about regional instability. Palak Shah, VP – Institutional Sales, PL Capital, emphasized that the ceasefire restored stability to a region known for its geopolitical volatility. 'Investors were quick to price in the positive development, triggering a strong rally,' she added. Trade agreements and global tailwinds Globally, the environment has also turned favorable. The United States has made significant headway in trade negotiations with major partners, including China, the UK, and the European Union. The recently signed India-UK Free Trade Agreement (FTA) is expected to benefit sectors like textiles, gems and jewellery, and automotive components. This deal eliminates tariffs on 99% of Indian exports to the UK, benefiting sectors like textiles, gems and jewellery, and automotive components. In return, India has reduced tariffs on UK exports, including scotch whisky, cosmetics, and medical devices. Vinit Bolinjkar, Head of Research at Ventura , pointed out that such trade deals have not only improved global sentiment but also driven FII inflows into Indian equities. Better corporate earnings Beyond geopolitics and global trade, domestic fundamentals have been another pillar of support. Corporate earnings for the fourth quarter have surpassed expectations. According to Siddhartha Khemka, profits of 27 Nifty companies grew by 4% year-on-year (YoY), beating the estimated 2% growth. Among 109 Motilal Oswal Financial Services (MOFSL)-covered companies, earnings rose by 6% against an expected decline of 2%. Sectors such as metals, technology, BFSI, and oil and gas led the earnings growth. Metal companies posted a 67% YoY profit surge on a low base, while oil marketing companies (OMCs) delivered a 14% profit growth, defying expectations of a decline. Valuations: A mixed view Analysts are mixed on Nifty's valuations. While for some, they remain relatively comfortable, others still point to the expensive nature. It is currently trading at 21.6x FY26 P/E, just 5% above its 10-year average of 20.6x. Vinit Bolinjkar from Ventura said that while valuations are on the higher side, they are not overly stretched. 'The trend may remain bullish, but intermittent corrections can't be ruled out,' he cautioned. Palak Shah of PL Capital also mentioned that although valuations have improved, they still have room to go higher. 'With improving macros from both domestic and global perspectives, large-cap stocks are well-positioned to outperform,' she said. Good monsoon is good news On the domestic front, favorable monsoon predictions have further improved the outlook. The Indian Meteorological Department (IMD) has forecast above-average rainfall, which, combined with recent tax benefits, is likely to boost rural consumption. This could provide a further push to sectors like consumer goods, automobiles, and retail, which are highly sensitive to rural demand. Atish Matlawala, Senior Fundamental Analyst at SSJ Finance & Securities, believes that India's strong structural growth story remains intact. 'While Nifty's valuations are not very cheap compared to other emerging markets, India's growth prospects are significantly stronger,' he stated. What lies ahead? With the geopolitical overhang easing, improving corporate earnings outlook, and supportive global trade developments, the outlook for Nifty has improved significantly from the start of the year. Analysts now expect moderate to strong gains for the rest of 2025, with key triggers including the continuation of FII inflows, sustained corporate earnings growth , and stable global economic conditions. FIIs have also returned as net buyers, injecting over Rs 14,000 crore into Indian markets since the beginning of the month. This reversal of FII flows will be a critical driver of the Nifty rally, which had been under pressure due to sustained outflows earlier in the year. "The return of FII flows has been a game changer, but this liquidity-driven rally needs earnings to keep pace. Investors should focus on quality stocks rather than chasing momentum," Narendra Solanki, Head of Fundamental Research at Anand Rathi Shares and Stock Brokers said. "Nifty is well-positioned to deliver healthy returns, even breach highs, through the rest of the year, especially if earnings recovery sustains and global economic risks are contained," Khemka said. "There is a reasonable likelihood of a positive Nifty return for the year. One cannot predict geopolitical events in the future and there is a reasonable likelihood that the recent hotspots which are seemingly cooling down might not flareup again," said Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital. However, there are cautionary notes. While valuations are not excessively high, they are not cheap either. The possibility of intermittent corrections cannot be ruled out, especially if global risk factors re-emerge. ( Disclaimer : Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Business Recorder
06-05-2025
- Business
- Business Recorder
India's IPO market loses steam on uncertain outlook; Ather stumbles
At least two initial public offerings worth $759 million are expected to be delayed, adding to a growing list of Indian companies deciding to postpone plans for initial public listings due to weak investor sentiment, investment bankers say. Education loan provider Avanse Financial Services and contract drug maker Anthem Biosciences are among companies that will join notable names such as South Korean conglomerate LG Electronics' India unit, to put IPO plans on hold for now, the bankers said. 'There are only select institutional investors coming in at this point given the global uncertainty,' Suraj Krishnaswamy, the managing director of investment banking at Axis Capital, said. 'And India-Pakistan tensions have not helped.' The trend is an indication that the global trade war and geopolitical tensions have clouded the economic outlook and caused companies to delay their capital raising and investment plans. The debut of electric scooter maker Ather Energy, seen as a barometer of investor appetite for the primary market, did not alleviate the market's concerns. The stock closed 5.8% lower, reversing gains after listing at a premium of 2% to its issue price of 321 rupees. The muted listing for a high-profile EV name, which broke a two-month lull in mainboard IPOs, highlights the broader weakness in India's primary market and caution surrounding intense competition in the EV space and elusive profitability, said Vinit Bolinjkar, head of research at Ventura Securities. As many as 58 companies with Indian regulatory clearance have not launched their IPOs due to global market disruptions caused by U.S. President Donald Trump's tariffs, which have negatively affected business sentiment and fuelled recession fears. Indian e-scooter maker Ather Energy falls in market debut Avanse Financial Services received approval for its $356 million IPO in October 2024, while Anthem Biosciences was cleared to raise $403 million on April 3. Neither company responded to Reuters' requests for comment. The regulatory clearances of some firms will expire over the next few months, PRIME Database Group MD Pranav Haldea said, forcing them to either restart the entire IPO process or seek an extension from India's market regulator. India, which was the world's second-largest IPO market last year, has seen a 58% slump in IPOs listed on the main stock exchanges so far this year, according to PRIME Database. The total fundraising on all the listing platforms has seen an 18% drop, LSEG data showed. 'Things are moving slowly, but it is not a complete standstill. In the current scenario, most of the IPOs are in a similar situation,' said an investment banker, who requested anonymity as he was not authorised to speak to the media. Company executives agreed. 'You don't want to file (for IPO) when you do not know how long the volatility will last,' online automobile marketplace Droom's CEO Sandeep Aggarwal said, adding that his firm had decided against filing draft IPO papers by June as it had originally planned. Worried investors Retail investors, having suffered significant losses due to market volatility, are being more cautious with new investments, resulting in a lukewarm reception for this year's IPOs. Ather Energy, which decided to proceed with its $352 million IPO despite the uncertainty, had to cut its target valuation by 44% and lower its offer size. 'Ather can be a risky bet given the current geopolitical issues and high valuation,' Hem Securities senior research analyst Astha Jain said. India's Nifty 50 is up 4.8% from April 2, since U.S. President Donald Trump announced 'reciprocal' tariffs, but is still down 7% from record highs hit in late-September. The unpredictable environment is prompting bankers to urge their prospective IPO clients to adjust their strategies. 'If the issue is important, then you may have to reconsider valuations. If valuation is important, then you have to wait for some more time,' said Bhavesh Shah, the managing director and head of investment banking at Equirus.
New Indian Express
25-04-2025
- Business
- New Indian Express
War jitters roil markets, Sensex crashes 589 points as India-Pakistan tensions escalate
In a highly volatile session, India's equity markets closed lower on Friday as investor sentiment turned cautious amid escalating tensions between India and Pakistan following the deadly terror attack in Kashmir. Profit-booking added to the pressure after a sharp rally in recent sessions. The benchmark index BSE Sensex was down 588.90 points or 0.74% at 79,212.53, and the NSE Nifty was down 207.35 points or 0.86% at 24,039.35. Broader indices underperformed with BSE midcap and smallcap indices falling 2.5% each. Benchmarks opened higher but plummeted sharply in early trade, with the Sensex crashing 1,200 points to an intraday low of 78,606 and the Nifty50 tumbling nearly 400 points to 23,848. Market volatility spiked, with India's fear gauge (VIX) surging 6% on Friday Vinit Bolinjkar, Head of Research at Ventura, said Pakistan's statement that any interference with the Indus Waters Treaty would be considered an "act of war" has significantly amplified investor concerns, especially in the wake of the Pahalgam incident and India's response. 'This rapid decline in bilateral relations, stemming from the attack, India's retaliatory actions (including the suspension of the Indus Waters Treaty and downgrading diplomatic ties), and Pakistan's reaction, has spurred widespread selling pressure as the potential for a larger regional conflict becomes a growing worry. The increasing India VIX reflects this heightened anxiety and the market's expectation of further negative developments in the India-Pakistan relationship following the Pahalgam attack and India's subsequent steps,' stated Bolinjkar. Among the sectoral indices, the IT sector showed strength. Most other sectors traded with a negative bias, with Realty, Healthcare & Pharma, Energy, and Metals emerging as the major laggards. Anand K. Rathi, Co-Founder of MIRA Money, said the recent run up from the bottom was impressive, and many investors are likely looking to book profits, especially considering that Indian markets have outperformed despite global volatility. He added that while no one wants a war, the uncertainty surrounding the situation raises worries about potential conflict. 'Historical precedents, such as during the Kargil War when the markets dropped by 15% in a short period, highlight how geopolitical tensions can lead investors to exit equity markets. Although we are not experiencing a decline of that magnitude now, the increasing tensions have created an opportunity for investors to pull out of the equity market, which is contributing to the current downturn,' stated Rathi. Vinod Nair, Head of Research, Geojit Investments, said that mid and small-cap stocks bore the brunt of the sell-off, driven by their elevated valuations and growing concerns over potential earnings downgrades following a muted start to the earnings season. 'The risk of the correction continuing in the near term is evident as investors adopt a wait-and-watch stance. However, it is a good time for persistent investors to dip into it, given the resilient nature of the Indian stock market during external & geopolitical volatility,' added Nair.
