Jewellery stocks such as Kalyan Jewellers India, Titan Company, and Senco Gold witnessed heavy selling in Monday’s trade on May 11, falling upto 10% after Prime Minister Narendra Modi urged citizens to avoid non-essential gold purchases for a year in order to help protect the country’s foreign exchange reserves.
Modi’s remarks on gold, made on Sunday, were part of a broader set of austerity measures that included reducing fuel consumption, avoiding foreign travel for a year, adopting Swadeshi products, cutting down on cooking oil usage, shifting towards natural farming, and curbing discretionary gold purchases.
Indian households remain among the world’s largest consumers of gold. According to Commerce Ministry data, gold imports surged 24% to an all-time high of USD 71.98 billion in FY26, compared to USD 58 billion in FY25.
People also ask
AI powered insights from this story
•5 QUESTIONS
Prime Minister Modi urged citizens to curb non-essential gold purchases to help protect the country’s foreign exchange reserves. High gold imports contribute significantly to India’s import bill and can widen the trade deficit, especially during periods of elevated crude oil prices and global uncertainty.
Jewellery stocks like Titan Company, Kalyan Jewellers India, and Senco Gold experienced a sharp sell-off, falling up to 10-12%. This reaction is attributed to fears of weaker demand, reduced footfalls, and pressure on discretionary jewellery spending following the Prime Minister’s appeal.
Analysts suggest that while short-term volatility may continue, long-term investors should remain invested in fundamentally strong jewellery companies. The ongoing shift from unorganized to organized players is expected to benefit established companies over time, despite near-term sentiment-driven reactions.
Retailers can focus on gold exchange programs, where consumers trade old jewellery for new purchases. They are also increasingly pushing lightweight jewellery, lower-carat products, silver jewellery, and gemstone offerings to adapt to changing demand patterns and record gold prices.
While PM Modi’s appeal aims to moderate gold imports, gold prices are largely influenced by global factors such as yields, uncertainty, and inflation concerns. Analysts suggest that despite potential short-term pressure on discretionary purchases, gold may retain its long-term appeal as a store of value and hedge against inflation.
However, in volume terms, gold imports declined 4.76% to 721.03 tonnes from 757.09 tonnes in FY25. Despite lower import volumes, elevated gold prices pushed import values to record highs, raising concerns over the widening current account deficit.
Analysts see short-term pressure, but remain positive on quality jewellery stocks
Ajit Mishra of Religare Broking believes short-term volatility in jewellery stocks could continue amid the current geopolitical uncertainty, but long-term investors should remain invested in fundamentally strong companies.
“If somebody has a short-term view, then probably yes, this kind of volatility may continue. So if the view is short term, they may consider exiting or booking profits. But as a long-term investor, I don’t think that’s the right strategy, considering that earnings were good, especially in terms of performance. Titan Company has delivered despite gold prices being at the higher end,” Mishra said.
He further noted that revenues could face some pressure in the coming quarters due to the geopolitical situation and any potential developments related to gold import duty, which could weigh on market sentiment. However, he added that investors with a long-term horizon can continue to stay invested, as the ongoing shift from unorganised to organised players is likely to benefit established companies such as Titan over time.
Meanwhile, Harshal Dasani, Business Head at INVasset PMS, said investors should approach jewellery stocks with caution and focus on quality names during corrections rather than reacting emotionally to the recent selloff.
“Jewellery stocks should be approached with a ‘buy quality on correction, avoid panic buying’ strategy. PM Modi’s appeal to defer non-essential gold purchases for a year has created a clear sentiment shock, with Titan, Kalyan Jewellers India, Senco Gold, and Sky Gold falling sharply, in some cases up to 9-12% intraday. The market is now attempting to price in the possibility of softer wedding-led demand, weaker footfalls, and pressure on discretionary jewellery spending over the near term. That said, the reaction currently appears more sentiment-driven than a reflection of a structural slowdown in the sector,” Dasani said.
Dasani added that the sustainability of the weakness would depend on whether consumer behaviour actually changes over the next two to three quarters. He pointed out that jewellery demand in India has historically remained resilient due to its strong connection with weddings, festivals, and household savings behaviour. According to him, organised jewellery players could continue gaining market share from smaller unorganised jewellers despite near-term volatility.
From an investment perspective, Dasani believes Titan remains the highest-quality play due to its strong brand, premium positioning, and diversified retail portfolio, while Kalyan Jewellers offers higher growth potential but with relatively higher volatility. He advised investors to avoid aggressively buying smaller jewellery stocks until sentiment stabilises and instead adopt a staggered accumulation strategy during deeper corrections.
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
