Organised jewellery retailers’ revenue likely to grow by 20% year-on-year in the financial year 2023 and by 10% year-on-year in the financial year 2024
New Delhi: Organised jewellery retailers in India may continue to outpace the industry over the medium term on the back of industry tailwinds, according to rating agency ICRA. The growth will come on the back of an accelerated shift in market demand from unorganised retailers and planned expansion of retail presence. The debt protection metrics and liquidity position of players in the sample set is expected to remain steady.
The rating agency estimates its sample set of 15 major organised jewellers to record revenue growth of 20% year-on-year (YoY) in financial year (FY) 2023 (revenue growth was 28% in FY2022) against the expected industry growth of 15% YoY in FY2023.
According to ICRA, domestic gold jewellery retail industry is expected to record a growth of 15% YoY in FY2023.
“The revenue of organised jewellery retailers is likely to grow at a much higher rate of 10% YoY in FY2024, due to the shift in market share to the organised sector driven by tightening regulations, change in consumer preferences towards branded jewellery and planned expansion of organised jewellers into tier 2 and tier 3 cities,” Kaushik Das, vice president and co-group head, ICRA said.
While the ongoing festive and wedding season foresees healthy demand, evolving domestic inflation scenario, slow rural economic recovery and soft consumer sentiments remain the key demand restriction.
ICRA expects the operating margins of organised players to contract by 100 basis points (bps) in FY2023 and 40-50 bps in FY2024, the margin is expected to sustain at 7% levels over the medium term.
Vipin Jindal, Assistant Vice President and Sector Head, ICRA, reiterated, “Most organised jewellers have recommenced expansion with a focus on capturing the untapped market in tier 2 and tier 3 cities in H1 FY2023. The total store count of ICRA’s sample set is expected to increase by 10% in the next 12-18 months, which is expected to translate into market share gains and economies of scale.”
ICRA Ltd. was set up in 1991 by financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency. It is a Public Limited Company, with its shares listed on the Bombay Stock Exchange and the National Stock Exchange. The international Credit Rating Agency Moody’s Investors Service is ICRA’s largest shareholder.
