India Rating & Research (Ind-Ra) had officially changed its Jewellery Sector outlook for 2027, and 2026. According to India Rating & Research’s report, they believe that India’s retail jewellery sector is expected to remain resilient despite record-high gold prices and geopolitical uncertainties. The agency has revised its outlook to neutral for FY27 from improving. The agency has also raised its FY26 revenue growth estimate by 600 basis points to 23% year-on-year, largely driven by elevated gold prices, while projecting high-teens growth in FY27 on a high base.
According to the report, they believe that jewellery volumes may witness a sharp decline due to the high price of gold. Organised jewellers are expected to continue outperforming the broader retail sector, supported by strong festive demand, asset-light expansion, and better credit fundamentals.
JEWELLERY SECTOR OUTLOOK
Ind-Ra’s revision to a neutral outlook reflects the sector’s ability to withstand shocks such as geopolitical tensions, trade disruptions, and demand pressures witnessed in FY26. According to the agency, organised jewellers have demonstrated strong adaptability in a volatile pricing environment.
The rating agency maintained a Stable outlook for its gold retail jewellery portfolio for FY27. Between December 2024 and December 2025:
- 74% of rated entities saw their ratings affirmed
- 15% were upgraded
- 10% were fresh rating assignments
- Only 2% faced downgrades
The upgrades were largely supported by steady same-store sales growth, prudent expansion through lease or franchise-led asset-light models, and diversification into newer markets.
Ind-Ra expects organised jewellers’ revenues to surge 23% YoY in FY26, mainly driven by the sharp rally in gold prices. However, growth is expected to moderate to high-teen levels in FY27 due to a high base effect.
Over FY26–FY28, organised jewellers are projected to grow at a 17% CAGR, significantly faster than the 7% CAGR expected for unorganised players. The agency believes trust, transparency, and regulatory compliance will continue to give organised retailers a competitive edge.
JEWELLERY SECTOR OUTLOOK: INVESTMENT OPPORTUNITY
Jewellery volumes are expected to drop sharply in FY26 — potentially the steepest decline seen since the pandemic — as high gold prices dampen affordability. However, strong buying during the festive and wedding seasons in the second half of FY26 has improved overall revenue expectations.
Industry players are reshaping consumer behaviour to accept elevated gold prices as the “new normal” by:
- Increasing the share of studded jewellery
- Promoting lower-purity gold (9k, 14k, 18k)
- Offering lightweight and ultra-light designs for mass consumers
This shift is aimed at accelerating inventory turnover and maintaining demand momentum despite high prices.
Ind-Ra expects the credit profile of organised jewellers to strengthen in FY27, supported by:
- Increasing store scale and contribution from new outlets
- Rising EBITDA to absorb higher interest costs
- Continued preference for asset-light expansion
While borrowings may remain high due to elevated inventory requirements, net leverage is expected to stay below FY25 levels. Interest coverage ratios are also projected to improve marginally.
However, free cash flow deficits are likely to persist in FY26 and FY27, as the ongoing gold price rally increases working capital needs. Funding availability remains critical, even though higher inventory valuations provide potential room for working capital limit enhancements.
With gold delivering exceptional returns compared to other asset classes, investment demand is expected to remain steady. In a volatile pricing environment, most jewellers are likely to continue hedging through daily or weekly replenishment models to average out procurement costs.
Ind-Ra believes that overall revenue growth will remain intact, as price gains offset volume declines and volume growth compensates during periods of price correction.
Overall, while record-high gold prices pose short-term challenges to volumes and liquidity, the organised retail jewellery sector appears structurally well-positioned to sustain growth and improve its credit profile through FY27.
JEWELLERY SECTOR OUTLOOK: FAQs
1. Why did India Ratings revise the jewellery sector outlook to neutral for FY27?
The outlook was revised to neutral as the sector has shown strong resilience against geopolitical tensions, trade disruptions, and demand pressures, positioning it as a stable outperformer within the retail segment.
2. What is the revised revenue growth forecast for FY26?
India Ratings has increased its FY26 revenue growth estimate by 600 basis points to 23% year-on-year, mainly due to the sharp rise in gold prices.
3. Will jewellery demand decline despite higher revenues?
Yes, jewellery volumes are expected to decline sharply in FY26 because of high gold prices. However, higher prices are likely to offset volume weakness, keeping overall revenue growth strong.
4. How are organised jewellers expected to perform compared to unorganised players?
Organised jewellers are projected to grow at a 17% CAGR over FY26–FY28, significantly faster than the 7% growth expected for unorganised players, supported by trust, regulatory compliance, and better access to funding.
5. What are the key financial risks facing jewellers in FY26 and FY27?
The main risk is elevated working capital requirements due to high gold prices, which may lead to higher borrowings and continued free cash flow deficits, even though profitability and interest coverage are expected to improve.
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