Organised gold jewellery retailers will continue to report strong revenue growth this fiscal year, boosted by pent-up demand and recovery in discretionary spending, with higher realisations as well, according to Crisil Ratings.
The ratings firm is projecting the jewellers to post 23-25% revenue growth in fiscal 2023, on top of a 36% expansion last fiscal year when the comparison was aided by the low base of the pandemic-hit fiscal 2021.
But the revenue expansion will moderate to 8-12% next fiscal year, given the higher base of this fiscal year and expectations of slower growth in disposable income amid economic uncertainties, it said.
In this milieu, operating margin will decline 0.4-0.7 of a percentage point on-year because of increased marketing and store-related expenses and stabilise at the pre-pandemic level of 6.7-7.0% this fiscal year and the next.
Crisil Ratings’ projections are based on its study of 76 gold jewellery retailers, which account for 33% of the ₹3.5 lakh crore annual revenue of the organised sector. The credit outlook for these players is seen as stable. For the record, the organised sector accounts for almost a third of the market.