Jewellery stocks down since gold duty hike
Jewellery stocks have been on the backfoot ever since the Budget 2012-13 announced measures to discourage gold imports that have added significantly to the country's current account deficit.
Shares of jewellery firms have fallen by up to 14 per cent after the Budget was tabled in Parliament on March 16, according to information available with the stock exchanges.
Analysts said the hike in excise duty on precious metals and the ongoing agitation by jewellers since March 17 against the government move will erode bottomlines of these companies.
The stocks which felt the pressure were Gitanjali Gems (down 14.29 per cent), Shree Ganesh Jewellery (13.97 pc), White Diamonds (13.02 pc), Goldiam International (6.29 pc), Su-Raj Diamonds (5.92 pc) and Zodiac JRD-MKJ (3.36 pc), Vaibhav Gems (2.42 pc), Suashish Diamonds (1.41 pc), Thangamayil (1.71 pc). However, Shrenuj & Co is the lone gainer in the league and rose 1.54 per cent.
"Doubling of import duty and the proposal to impose excise duty on unbranded jewellery have affected the investor sentiment. Besides, these proposals agitated the jewellers, which in turn would affect the bottom line of the companies," CNI Research CMD kishor Ostwal said.
"In addition, some jewellers fears that budget proposals may lower consumption of these precious items resulting in lower profitability for jewellery companies," he added.
Bombay Bullion Association President Prithviraj Kothari said, "The doubling of customs duty will give way for illegal channel to operate and reduce gold demand significantly by 30-40 per cent."
The Budget proposed an excise duty of one per cent on non-branded jewellery
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