India gold jewellery industry to grow 10%, says ICRA study

Published: Apr 20, 2015 10:20

Save

The medium to long term prospects of Indian gold jewellery industry looks bright, suggests the latest study report published by renowned credit rating agency, ICRA.

Author: Paul Ploumis17 Apr 2015 Last updated at 08:27:03 GMT

NEW DELHI (Scrap Monster): The medium to long term prospects of Indian gold jewellery industry looks bright, suggests the latest study report published by renowned credit rating agency, ICRA. As per the report, the gold jewellery sector in the country is poised to grow robustly at 8%-10% over medium to long term. The organized sector players are likely to expand their presence all over the country.

In the near term, gold volume growth will remain extremely robust. The agency foresees several reasons behind the rise in domestic gold volumes. Firstly, supply concerns are likely to be eased, thanks to increased gold imports and recently announced gold monetization schemes. Re-introduction of gold metal loans will further improve the gold availability in the country. Notable improvement in consumer sentiments and aggressive expansion plans by organized retail players are the other key factors that may drive demand growth, ICRA notes.

Organized gold retailers are likely to post moderate improvement in same store sales growth and revenues. ICRA forecasts that organized retailers may gain more market share through penetration into Tier-II and Tier-III rural markets, which currently are dominated by unorganized players. Improving demand prospects in rural India will lead to better sales and profitability for these companies.

The ICRA study report points out that gold jewellery volume in India posted strong growth of 8% during CY 14. The demand had dropped 14% over the year during the first half of the year. However, the demand growth recorded significant jump of 37% during H2 CY 14. The fourth quarter of the year alone witnessed 19% growth in gold demand when compared with the corresponding quarter a year ago.

According to ICRA, the supply side of gold looks strong, which in turn may reduce the inflow of the yellow metal through unofficial channels and sourcing from recycled gold. However, the prevailing high import duty on bullion is feared to cause some gold imports through illegal channels.

India gold demand

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

1 hour ago

Zinc Price Center Moved Higher, Focus on the Peak Consumption Season and Smelter Raw Material Supply [SMM Zinc Morning Comment]

[SMM Zinc Morning Comment] Overnight, SHFE zinc posted a bullish candlestick with no upper shadow, with support from the 5/10-day daily average below. Driven by the LME market overnight, zinc prices fluctuated upward, but on the fundamentals side, April production at China's domestic smelters is expected to increase by more than 10,000 mt MoM. At elevated zinc prices, downstream enterprises showed lower purchasing enthusiasm, inventory destocking slowed down, and weak domestic fundamentals are expected to limit its upside. Focus on......

1 hour ago

Macro and Fundamentals Resonated, LME Zinc Posted a Three-Day Winning Streak [SMM Morning Meeting Summary]

[SMM Morning Meeting Summary: Macro Factors and Fundamentals Resonated, and LME Zinc Logged a Three-Day Winning Streak] Overnight, LME zinc logged a three-day winning streak, with support from the 20-day moving average below and resistance from the 40/60-day moving averages above. Overnight, as geopolitical tensions in the Middle East may have de-escalated, the US dollar index moved lower, nonferrous metals rose, and LME zinc inventory continued destocking......

1 hour ago

18 hours ago

Zinc Price Center Shifted Lower in March; How Will It Perform in April? [SMM Analysis]

As of March 31, the most-traded SHFE zinc contract closed at 23,480 yuan/mt, up 1,230 yuan/mt for the month, with a decline of 4.98%. Zinc prices plunged in March, briefly climbing to a high of 24,955 yuan/mt at the beginning of the month and falling to a low of 22,350 yuan/mt in the middle of the month, with the overall price center moving down significantly. After zinc prices plunged in March, how will they move in April?

18 hours ago