Jewellery shares such as Titan, Kalyan Jewellers, Sky Gold and Goldiam International have delivered returns of up to 64% over the past three months. The companies posted upbeat June quarter results, but analysts believe that most of the easy gains are already priced in.
"The easy part of this rally is over," said Harshal Dassani, Business Head at INVasset PMS. He noted that the sharp three‑month run has already captured much of the Q1 performance and the benefit of higher gold prices.
From now on, the focus will shift to whether volumes, store additions, market‑share gains and margins can sustain the earnings momentum. Dassani suggested buying dips rather than chasing momentum and expecting consolidation before further growth.
Titan posted a strong Q1, with consolidated net profit rising 63% year‑on‑year to Rs 1,777 crore and revenue from operations growing 29% to Rs 21,356 crore. The jewellery business remained the key growth driver, with income from the segment up 43% YoY.
Motilal Oswal expects Titan’s sales, EBITDA and profit to grow at 18%, 22% and 25% CAGR, respectively, between FY26 and FY28, and has retained its Buy rating with a Rs 6,000 target price. PL Capital projects EPS growth of 25.6% annually between FY26 and FY28 and raised its target to Rs 5,408. SBI Securities set a target of Rs 5,340.
The main question is whether earnings can continue to surprise after the strong run. SBI Securities noted that growth moderated somewhat amid elevated gold prices and a temporary demand slowdown in May, but buyer additions, studded jewellery traction and market‑share gains remain supportive.
Kalyan Jewellers also reported a strong quarter, with consolidated revenue rising 46% YoY and net profit increasing 32% YoY. The company is expanding its showroom network, especially outside South India, while brands like Candere provide additional growth avenues.
Jefferies, which gave a Buy rating and a Rs 830 target, expects Kalyan to deliver 21‑23% CAGR in revenue and earnings over FY26‑29. The brokerage sees continued expansion outside South India, steady growth in the South and increasing contribution from brands such as Candere as key drivers.
Sky Gold and Diamonds reported a 78% YoY jump in Q1 revenue, while net profit rose sharply to around Rs 105 crore. The company benefited from demand for lightweight and value‑added jewellery and is targeting revenue of Rs 8,100 crore or more in FY27. It also aims to improve cash generation and reduce leverage.
Goldiam International delivered a sharp improvement in profitability. Consolidated revenue rose 54% YoY while net profit more than doubled to Rs 74 crore. EBITDA rose around 121%, with the margin expanding to 28.6%. Lab‑grown diamond jewellery now accounts for more than 90% of its export sales, giving Goldiam a distinct growth and margin profile.
Valuations have risen across the space. Titan trades at around 70x one‑year forward PE, compared with its five‑year historical average of 48x. Kalyan trades at 37x versus a five‑year average of 28x, Sky Gold at 29x against 18x historically, and Goldiam at 29x versus 25x historically.
The premium reflects the overwhelmingly positive street sentiment. Titan has 30 Buy calls, five Holds and two Sells; Kalyan has one Buy and two Holds; Sky Gold has three Buy calls and one Hold; Goldiam has two Buy calls.
While analysts remain constructive on the structural growth story, the valuations suggest that a meaningful part of that optimism is already reflected in prices. Investors now face the question of whether these companies can deliver earnings growth above what is already priced in.
The jewellery story is not necessarily over, but the easy part may be. The next leg of the rally will need to be supported less by gold‑price inflation and more by genuine volume growth, store additions, market‑share gains and margin recovery.