Six triggers why Jewellery stocks surged up to 100% in a month and the opportunities ahead

India's Jewellery stocks have been shining bright over the last one month, led predominantly by the mid-sized and the smaller names, including the recent listings.

Shares of Tribhovandas Bhimji Zaveri (TBZ) have already doubled in value over the last one month, having gained 101%, while those of recent listings Lalithaa Jewellers, PC Jewellers have also surged up to 60% and 40% respectively over the same timeframe.

However, larger players like Titan and Kalyan Jewellers have underperformed their smaller peers, despite registering strong topline growth during the June quarter. Titan's Jewellery business saw revenue growth of 39% from last year for the June quarter, while those of Kalyan Jewellers and Senco Gold went up by 38% and 67% year-on-year respectively.

Here are some of the important triggers that are keeping these Jewellery stocks in the spotlight:

First, a slew of companies have made their stock market debut this year which are linked to this space, either being pure-play jewelers, or providing a platform for the sale of precious metals. As many as seven companies on the mainboard, linked to this space have debuted this year on Dalal Street.

Deepa Jewellers listed at a 25% premium to its issue price. Shares of recent listings such as Lalithaa Jewellery have already risen over 50% from their issue price, while others such as Augmont Enterprises, Shankesh Jewellers, PNGS Reva, Advit Jewels, Priority Jewels have also made their debut on the bourses this year.

Second, TBZ shares reacted to the acquisition by GRT Jewellers, which will be acquiring 74.12% of the promoter stake at ₹209 per share for ₹1,033.7 crore. GRT has also made an open offer for the remaining 26% stake at ₹249.6 apiece. Despite the acquisition and open offer price being well below TBZ's current market price, the stock surged further after the deal announcement.

Third, Gold prices in the global markets have seen a rebound of over 20% from their 52-week low, amidst uncertainty surrounding whether or not the US Federal Reserve will raise interest rates next week. Prices in the global markets are hovering around the $4,400 an ounce mark.

Fourth, in May this year, the customs duty on gold imports was raised sharply to 15% from 6% earlier, in order to curb imports and cut back on foreign exchange spending. An increase in duty increases the landed costs of imported Gold, making physical gold more expensive for local buyers.

Five, the companies are now gearing up for the upcoming festive season, with the Ganesh Chaturthi, Navratri and Diwali around the corner in the next few months.

and lastly, large corporate houses are also eyeing an increase in their market share through their own respective brands such as the Aditya Birla Group.

What Are The Opportunities Ahead In The Jewellery Market?

Despite the recent growth among organized players, 60% of the Indian jewellery market is still unorganized. The runway is such that even the largest player, only has a 8.5% market share.

The focus of the customers is shifting towards retail experience, transparent pricing and design innovation with daily wear jewellery seeing traction on account of lower gold weights and Lab Grown Diamonds.

60% of the market is currently dominated by wedding wear and only 10% for the fashion wear segment.