Jewellery stocks ahead of festive season: Can Q2 deliver sustained growth amid rising rates, bond yields?

India’s jewellery stocks are heading into the festive season with a mixed scorecard. Stronger-than-expected September-quarter business updates have supported sentiment towards the sector, but rising oil prices, inflation, bond yields and renewed expectations of higher interest rates amid the West Asia crisis have added to the challenges facing the industry.

Much like the first quarter, jewellery companies entered Q2FY27 navigating these four pressures just as the festive season was expected to boost demand. The result has been a divergent performance across listed players, with some stocks rallying sharply while others have slipped despite resilient business updates.

Over the past three months, Sky Gold has gained 56%, followed by PC Jeweller, which is up over 40%, and Kalyan Jewellers, which has risen 20%. In contrast, Thangamayil Jewellery has fallen 26%, Goldiam International is down 19%, Senco Gold has declined 8%, and Titan Company has slipped a marginal 2%.

Jewellery stocks Q2 update

Jewellery companies reported healthy revenue growth in the September quarter, although demand moderated towards the end as the festive calendar shifted to Q3FY27.

Kalyan Jewellers reported consolidated revenue growth of more than 26% year-on-year in Q2FY27, supported by robust operating momentum and healthy same-store sales growth across its key markets. The growth came despite a high base, as all nine days of Navratri fell in the second quarter last year, supporting strong festive sales.

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Titan reported 25% year-on-year growth across its consumer businesses in Q2FY27, with its jewellery business growing around 21%. Consumer demand remained healthy through most of the quarter, although it moderated towards the end as the festive calendar shifted to the third quarter of FY27.

PC Jeweller Ltd reported approximately 28% year-on-year growth in consolidated revenue for the quarter ended September 30, 2026. The company also achieved debt-free status after repaying all outstanding bank debt ahead of the scheduled due dates.

The broader industry trend remained resilient. Jewellery and premium categories sustained demand in Q2FY27 despite gold prices rising 28% year-on-year, supported by festive purchases, premiumisation and continued market share gains by organised players. Consumers adapted to higher prices, with increased average ticket sizes supporting value growth. Demand softened towards the end of the quarter as some festive purchases shifted to Q3FY27.

Should you buy jewellery stocks ahead of the festive season?

Analysts expect demand to remain healthy in the second half of FY27, supported by the festive and wedding seasons.

"B2B jewellers are expected to continue delivering strong growth, broadly in line with the healthy B2C jewellery demand trend. Growth is likely to be driven by (1) ongoing capacity expansion, (2) expansion of the product portfolio beyond core categories, including bridal and studded jewellery, and (3) market expansion through new customer additions and deeper penetration across organised jewellery retailers," Preeyam Tolia, Research Analyst at Choice Institutional Equities, said.

Tolia added that the benefit of low-cost gold inventory is largely over, and B2B jewellers are likely to report normalised margins going forward. "We expect demand momentum to remain healthy in H2FY27, supported by the festive and wedding season."

Tanvi Kanchan of Anand Rathi shares a similar view, arguing that the moderation in quarterly demand largely reflects the shift in the festive calendar rather than a deterioration in consumer appetite. "Demand is healthy, the festive calendar has simply moved. Navratri began on 11th October this year, against late September last year, and Dhanteras and Diwali fall on 6th and 8th November. Even without Navratri, Q2 numbers held up.

"Consumers have adjusted to the higher import duty and elevated gold prices rather than walked away. They are trading in old gold and shifting to studded jewellery, organised players with scale and strong exchange programmes are taking share."

Within its coverage universe, Choice expects Shanti Gold’s revenue to grow 73% year-on-year, driven by volume growth of 25-30%, new customer additions, manufacturing capacity expansion, higher gold prices and sustained volume growth. EBITDA is expected to rise 42% year-on-year, while the EBITDA margin is projected to decline by 155 basis points to 7%, reflecting the fading benefit of low-cost gold inventory and margin normalisation.

For Shrinagar House of Mangalsutra, Choice expects revenue to grow 52% year-on-year, supported by broadly resilient demand and continued network expansion by B2C jewellers, leading to market share gains. Adjusted EBITDA is expected to increase 51% year-on-year, while the adjusted EBITDA margin is projected to decline marginally by 6 basis points year-on-year to 7%.

Valuation discomfort remains

Despite resilient demand, valuations remain a key concern, particularly for stocks that have already priced in strong earnings growth.

Titan has corrected over 11% from its early-September levels. At roughly 70 times trailing earnings, the stock needs annual earnings growth of around 18-20% just to hold its price as the valuation multiple normalises.

Kanchan cautioned that the sector must deliver sustained earnings growth of more than 20% to justify its valuations. Any post-festive slowdown in same-store sales or margin pressure from heavy old-gold exchange could weigh on stocks trading at richer multiples.

How is the second half set up?

"The strong start to FY27 by market leaders reinforces confidence in the sector's demand outlook. Within our coverage universe, we prefer Titan Company and Bluestone Jewellery as our preferred picks over the next 12–18 months," Pankaj Kumar, VP Fundamental Research at Kotak Securities, told ETMarkets.

Growth momentum could extend beyond Q2, experts say, although gold prices are likely to be an important factor in sustaining demand. Jewellery purchases are typically influenced more by price volatility than by absolute price levels, making the trajectory of gold prices an important variable for the sector.

While recent business updates point to resilient demand, the shift in the festive calendar and the fading benefit of low-cost gold inventory remain key factors to watch. The performance of individual stocks will depend on how demand, earnings growth and valuations evolve as the sector moves into the second half of FY27.

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