Mumbai, February 24 The domestic jewellery retail sector is projected to post around 18 per cent revenue growth in 2026-27, with rising bullion prices expected to drive value growth, a report said on Tuesday.
Ind-Ra has raised its FY26 revenue growth targets by 600bp to 23 per cent Y-o-Y, driven by price effects, and expects it to settle at a high-teen rate (18 per cent) for FY27 on a high base.
Accordingly, Ind-Ra has revised its outlook on the retail jewellery sector to neutral from improving for FY27.
"Jewellery volumes are set to decline sharply in FY26 – the steepest post-pandemic decline, due to high gold prices, but strong festive and wedding-season buying in 2HFY26 boosted sentiments, even at record high prices, leading to an upward revision in our revenue growth expectations," Preeti Kumaran, Senior Analyst, India Ratings & Research.
Adjusting consumer behaviour to accept record-high gold prices as the new normal, along with re-aligning the product mix by increasing the proportion of studded jewellery, lower-purity (9k, 14k and 18k) gold jewellery, and light and ultra-light pieces for the mass segment to accelerate inventory turns, will help jewellers navigate industry challenges over the near to medium term, she added.
Organised jewellers' revenues are expected to surge 23 per cent yoy during FY26, up 600bp from the earlier forecast, largely benefiting from the steep gold price rise, Adarsh Gutha, Associate Director, Corporate Ratings, Ind-Ra, said.
Trust, transparency, and regulatory compliance will continue to benefit organised jewellers, resulting in a CAGR growth of 17 per cent over FY26-FY28, a faster pace than the 7 per cent forecasted for unorganised jewellers, he stated.
"While organised jewellers' credit profile is expected to improve steadily, unorganised players with limited financial flexibility might face intermittent liquidity stress due to increasing inventory stocking requirements when gold prices rise or during temporary dips in consumer appetite in a volatile gold price environment," Gutha added.
With gold outperforming with exceptional returns among various asset classes, investment demand is expected to remain steady, said the report.
In the ongoing volatile price scenario, Ind-Ra believes most jewellers will continue hedging through daily or weekly replenishment models to average out prices, and overall revenue growth is likely to remain intact, as price gains offset any volume decline and volume growth offsets any price corrections.