Jewellery Stocks Rally as Gold Import Costs Drop

Jewellery stocks surged after the government reduced the base import prices of gold and silver, leading to lower effective import costs for companies. The adjustment impacts the calculation of customs duty, as duties are levied on these base prices. With a reduction in the reference price, the overall cost of importing gold and silver decreases, which is a key input for jewellery manufacturers and retailers.

The move was well received by the market, with companies such as Senco Gold Ltd and Kalyan Jewellers India Ltd witnessing strong buying interest. Senco Gold shares surged around 11–13%, while Kalyan Jewellers rose about 5% in trade. The rally reflects investor expectations of improved margins and a more favourable cost structure for jewellery companies.

Lower import prices are expected to directly benefit margins, as gold and silver constitute the primary raw materials in the jewellery business. A reduction in procurement costs can enhance profitability, especially if companies are able to maintain retail prices or pass on only a portion of the benefit to consumers. At the same time, relatively lower prices may also support demand, as jewellery becomes more affordable for buyers.

In addition to policy support, strong business performance also contributed to the positive sentiment. Senco Gold reported strong Q4 FY26 results, with revenue growing by around 46% year-on-year. The company also reported strong same-store sales growth of approximately 34%, indicating healthy demand across existing outlets.

The growth was supported by a strong wedding season, which typically drives jewellery purchases in India. Demand was spread across the quarter, supported by key occasions and festivals such as Valentine’s Day and International Women’s Day, which contributed to gifting-related purchases and higher footfall in stores.

Senco Gold also benefited from its product strategy, which focuses on lightweight and more affordable jewellery segments, such as 9k jewellery. This approach helps maintain volumes even when gold prices are high, as consumers look for more affordable alternatives without compromising on design or occasion-based buying.

Despite a sharp rise in gold prices over the past year, consumer demand for jewellery remained resilient, reflecting the cultural and emotional importance of gold in India, particularly during weddings and festive occasions. This highlights that jewellery demand is not purely price-driven but is also influenced by social and seasonal factors.

On the expansion front, Senco Gold added new stores during the quarter, increasing its total store count to 201, including a mix of company-owned, franchise, and international outlets. The company also outlined plans to continue expanding its retail presence in the coming year, with expectations of opening additional stores and maintaining steady growth momentum.

Looking ahead, jewellery companies are expected to benefit from a combination of favourable policy support, strong seasonal demand, and strategic expansion. The reduction in base import prices, along with sustained consumer demand during key buying periods, is likely to support both volume growth and margin expansion in the sector.