New Delhi: The domestic jewellery retail industry is projected to grow at a yearly rate of 10-12 per cent in FY2024, said ICRA in a note revising its previous forecast of 8-10 per cent growth. The revised growth is mainly driven by the jump in gold prices.
In H1 FY2024, jewellery consumption is expected to rise by more than 15 per cent YoY, due to the stable demand during Akshaya Tritiya and higher gold prices, read the note.
However, due to sustained tepid rural demand, ICRA projects the growth rate to moderate to 6-8 per cent in H2 FY2024 amid the inflation.
“ICRA’s sample set of 14 large jewellers, which account for ~70% of the organised market, is projected to record a healthy revenue expansion of 15-18% YoY in FY2024 on the back of their planned retail expansions and a gradual shift in consumer preferences towards branded jewellers,” said Sujoy Saha, vice president and sector head, ICRA.
While the rise in gold prices has supported the revenue expansion of most jewellery retailers, it remains the key risk to demand, the note read. Further, ICRA has projected some moderation in the operating margins of organised players in FY2024 owing to operating costs for planned store additions and increased advertising expenditure.
“The organised jewellers had recommenced their retail expansion in FY2023, after a brief hiatus in FY2021 and FY2022, with the store count of ICRA’s sample set estimated to have risen by more than 20% during the year. The momentum is likely to continue over the near to medium term with an estimated increase in store count by 18-20% YoY in FY2024, supporting their revenue growth,” Saha added.
