Jewellery stocks bracing for duty hike impact: Why brokerages are betting on Titan, Kalyan 

Antique Stock Broking and JM Financial said jewellery demand has remained resilient despite a steep surge in gold prices through FY26. This has primarily been supported by lightweight jewellery, exchange-led buying and rising consumer preference for trusted branded retailers. 

Both firms retained positive ratings on Titan Company, Senco Gold and Kalyan Jewellers even after trimming valuation assumptions because of macroeconomic risks linked to the West Asia conflict and pressure on India’s foreign exchange reserves.

Organised jewellers gain ground 

Brokerages said the sector is witnessing a behavioural change in how customers purchase jewellery during periods of elevated gold prices. Instead of postponing purchases entirely, consumers are increasingly opting for lower grammage jewellery and exchange-led transactions to stay within budgets.

Antique Stock Broking said Titan delivered jewellery sales growth of 45% and EBITDA growth of 39% in FY26 despite a 56% increase in gold prices during the year. Senco Gold also reported sales growth of 30% and EBITDA growth of 135% during the first nine months of FY26, according to the brokerage.

“Titan and Senco’s increased focus on light-weight jewellery acts as a key measure to maintain product affordability and sustain consumer interest,” Antique Stock Broking said in the report.

JM Financial Institutional Securities also said historical trends indicate consumers typically pause purchases only during periods of sharp volatility before returning to the market once prices stabilise.

“We observe whenever gold prices face sharp volatility, consumers usually pause their purchases and wait for the uncertainty to settle down,” JM Financial Institutional Securities said.

The brokerage added that customers increasingly adjust jewellery weight in line with budgets instead of exiting purchases altogether, helping organised chains maintain revenue momentum.

Formalisation strengthens position of branded chains

Brokerages tracking the sector also pointed to rising formalisation within jewellery retail as a major advantage for organised players after the customs duty hike.

Antique Stock Broking said mandatory Bureau of Indian Standards hallmarking and the Hallmark Unique Identification system have improved compliance and traceability within the jewellery business, strengthening customer trust in branded retailers.

“Thus, organised jewellers are relatively better placed due to stronger consumer trust and compliance standards, while unorganized or smaller players may face higher sourcing and regulatory risks,” Antique Stock Broking said.

The brokerage also noted that concerns around gold smuggling have resurfaced after the sharp increase in customs duty, similar to the period seen in 2013. However, stronger compliance systems and tighter traceability measures are expected to contain the impact this time.

JM Financial Institutional Securities echoed a similar view and said organised retailers now have significantly better operational experience in handling periods of volatility compared with FY13-FY14, when the government had sharply increased customs duty to curb pressure on the rupee and current account deficit.

Gold imports weaken as recycling and exchange-led demand rises

Brokerages said the latest trends in gold imports indicate changing consumption patterns rather than a collapse in demand.

Antique Stock Broking said India’s decline in gold imports has been driven by elevated prices, softer fresh jewellery purchases and increased recycling of old jewellery. The brokerage noted that gold imports during February 2026 and March 2026 declined 33% and 50% month on month respectively, while FY26 imports were estimated to decline around 5% year on year.

At the same time, JM Financial Institutional Securities said annual gold import volumes between FY19 and FY26 largely remained stable within the range of 720 tonnes to 770 tonnes even though import values increased sharply because of higher gold prices.

The brokerage added that exchange-led purchases are becoming increasingly important across organised jewellery chains. Titan’s gold exchange contribution rose to nearly 50% compared with around 20% during FY13-FY14, according to JM Financial Institutional Securities.

“Our analysis of Titan’s standalone jewellery segment revenue and margins during the periods in which custom duty was hiked suggests the company was able to sustain the demand momentum from the earlier quarters and the revenue momentum was largely a function of gold price movement and customers adjusting the grammage in line with their budgets,” JM Financial Institutional Securities said.

Brokerages trim valuation multiples but retain positive stance

Even with a constructive view on organised jewellery retail, brokerages turned more conservative on valuations after the customs duty increase because of risks linked to macroeconomic uncertainty and potential policy tightening.

Antique Stock Broking reduced its valuation multiple for Titan to 55 times FY28 estimated earnings from 60 times earlier and lowered Senco Gold’s multiple to 18 times from 20 times. Even after the cut, the brokerage retained its Buy recommendation on Titan with a target price of Rs 4,763 and on Senco Gold with a target price of Rs 475.

JM Financial Institutional Securities also reduced its FY28 valuation multiple for Titan to 55 times from 60 times and for Kalyan Jewellers to 30 times from 35 times. The brokerage retained Buy ratings on both companies with revised target prices of Rs 4,900 for Titan and Rs 600 for Kalyan Jewellers.

The brokerage said one key risk remains the possibility of restrictions on Gold Metal Loan and Gold on Lease schemes if macroeconomic stress intensifies further. However, it added that companies are now in a better position to manage such disruptions because of stronger exchange programmes and operational experience.

Conclusion

Brokerages tracking the jewellery sector believe thestricter nroms and customs duty increase will exert pressure on valuations and near-term sentiment, but they do not expect a sharp collapse in organised jewellery demand. 

Rising formalisation, stronger trust in branded chains, lightweight jewellery collections and exchange-led purchases are helping large retailers maintain customer traction despite elevated gold prices.

Antique Stock Broking and JM Financial Institutional Securities both said the current cycle differs from earlier periods because organised jewellers now operate with stronger compliance systems, wider customer reach and better mechanisms to manage volatility. Disclaimer: The analysis and stock ratings provided in this article are based on reports by Antique Stock Broking and JM Financial Institutional Securities and do not constitute personal financial advice. Investing in the jewellery sector involves market risks, including gold price volatility and regulatory changes; readers should consult a SEBI-registered investment advisor before making any buy, sell, or hold decisions.

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