Titan Tumbles 9%, Kalyan Cripples 8% As Jewellery Stocks Melt From Narendra Modi’s Austerity Advisory 

Mumbai, May 11:Jewellery stocks came under sharp pressure on Monday, with shares of leading companies such as Titan, Senco Gold, Kalyan Jewellers and Sky Gold sliding amid a mix of policy cues and global risk aversion. The decline followed comments made by Prime Minister Narendra Modi over the weekend, along with broader market weakness triggered by higher crude oil prices and cautious sentiment across equities.

In early trade, jewellery counters dropped as much as 10% asinvestors reacted to PM Modi’s advisory urging restraint on gold purchases for one year, particularly in the context of weddings and discretionary buying, which market participants interpreted as potentially impacting near-term demand sentiment for the sector. The remarks added to volatility already present in the broader markets.

Urging Austerity

In his remarks, Prime Minister Narendra Modi urged restraint in gold buying as higher gold imports widen India’s trade deficit and put pressure on the rupee. Since India imports a large share of its gold requirements, elevated purchases can increase the current account deficit, strengthen demand for foreign currency, and weigh on the domestic currency. The advisory was seen as a reminder of the macroeconomic implications of gold consumption, particularly during periods of elevated global prices.

Titan Tumbles

Titan tumbled as PM urged restraint on gold for a year. Source: NSE 

At the time of writing, Sky Gold and Diamonds share price had fallen nine per cent at Rs 491.80. Titan, India’s largest jeweller by sales, was down six per cent at Rs 4,215.50. To be sure, the company had recently projected steady long-term revenue growth driven by sustained consumer interest in gold jewellery. However, the company had also acknowledged margin pressures from elevated gold prices, which continue to influence profitability dynamics.

Kalyan Cripples

Kalyan Jewellers fell eight per cent at Rs 390.20. The company had reported a sharp rise in profit for the March quarter last week aided by strong sales. Its net profit for the fourth quarter had come in at Rs 410 crore, which is up from Rs 188 crore a year ago. Revenue from operations jumped more than 65% to Rs 10,275 crore total expenses rose over 60% amidcostlier gold.

Kalyan fell as markets felt pessimistic after PM’s comments urging austerity for a year. Source: NSE 

The weakness in jewellery stocks also comes against a backdrop of rising global crude oil prices, which have weighed on overall market sentiment. On Monday, Indian equities and the rupee fell after global oil surged, raising concerns about inflationary pressures and India’s current account deficit. Broader market losses added to the pressure on sectoral indices, including jewellery-related stocks.

Despite the sharp sell-off, some companies in the sector have recently highlighted resilient demand trends.

Complex Environment

The sector has been navigating a complex environment over the past several months. Rising gold prices have boosted revenue values but have also created margin challenges and influenced consumer purchasing patterns. Analysts have previously noted that while earnings growth remains visible for some large players, investor sentiment has been sensitive to gold price volatility and shifting demand trends.

Looking ahead, market participants will closely monitor gold price movements, global commodity trends, and any further policy clarifications. With jewellery stocks already under pressure, near-term direction is likely to depend on how investors interpret demand signals, margin outlooks, and broader macroeconomic developments. For now, the combination of policy commentary and macro headwinds has triggered a sharp sectoral correction, keeping jewellery counters in focus across the market.

Source:

• https://www.nseindia.com/get-quote/equity/TITAN/Titan-Company-Limited
• https://www.nseindia.com/get-quote/equity/SKYGOLD/SKY-GOLD-AND-DIAMONDS-LIMITED
• https://www.nseindia.com/get-quote/equity/KALYANKJIL/Kalyan-Jewellers-India-Limited