Kalyan Jewellers Falls 5%, Leads Decline Among Jewellery Stocks After Duty Hike; Titan Fares Better

Mumbai, May 13: Shares of jewellery companies came under pressure in Wednesday’s trade after the government raised import duties on gold and silver to 15% from 6%, a move aimed at curbing overseas purchases of precious metals and easing pressure on foreign exchange reserves. The development weighed on sentiment across the sector, with investors factoring in the potential impact on costs, demand dynamics and near-term margins.

Stocks such as Kalyan Jewellers, Senco Gold, and other listed jewellery firms fell up to 5% in intraday trade, tracking concerns that higher import tariffs could lift input costs and influence consumer demand in the short term. The duty hike is intended to discourage imports and support external account stability, particularly at a time when global commodity prices remain sensitive to geopolitical developments.

Kalyan fell five percent to trade at Rs 343.30. Titan Company edged down 0.76% at Rs 4,024.30, faring better.

Jewellery stocks have been on a slide ever since the Prime Minister Narendra Modi urged a one-year postponement of gold purchases over the weekend in a bid to conserve foreign exchange.

Gold Bug

Kalyan fell as investors feared the impact of the duty hike on demand. Source: NSE 

India is one of the world’s largest consumers of gold, and the country relies heavily on imports to meet domestic demand. As a result, changes in import duties tend to have a direct impact on pricing trends in the local market. Higher tariffs typically translate into increased landed costs for jewellers, which may either compress margins or be passed on to customers through higher retail prices.

Titan managed to fare better than Kalyan, edging down after the import duty hike. Source: NSE

The move also comes against a backdrop of elevated global uncertainty, with investors closely monitoring energy markets, inflation trends, and currency movements. With gold often viewed as a safe-haven asset, policy shifts in import taxation can influence both investment demand and jewellery consumption patterns, especially during the festive and wedding seasons.

Demand Concerns

The sector reaction reflects concerns over potential demand moderation if retail prices rise significantly. While established players with strong brand presence and organised distribution networks may be better positioned to navigate cost pressures, smaller players could face greater strain in maintaining competitiveness.

From a broader market perspective, the tariff increase adds another policy variable for investors to assess alongside global cues and domestic macro indicators. India’s recent retail inflation data and ongoing movements in crude oil prices continue to shape expectations around liquidity and consumption trends, both of which are important drivers for discretionary segments such as jewellery.

Despite the near-term decline in stock prices, structural demand for gold in India remains resilient over the long term, supported by cultural factors and seasonal buying patterns. However, in the short run, the tariff adjustment is likely to keep sector sentiment cautious, particularly if global gold prices remain elevated.

Overall, jewellery stocks reacted negatively to the policy change, with investors recalibrating earnings expectations amid higher import costs. Market direction for the sector will likely depend on how demand trends evolve, whether cost pressures are absorbed or passed on, and how global bullion prices move in the coming weeks.

Source:

• https://www.nseindia.com/get-quote/equity/TITAN/Titan-Company-Limited,
• https://www.nseindia.com/get-quote/equity/KALYANKJIL/Kalyan-Jewellers-India-Limited