Investment share in India’s gold consumption rises
to 42% in CY25 from 29% in CY24: CareEdge Ratings
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Share of jewellery consumption fell below 60% of total gold purchases in
CY25 compared to long-term average of ~70%
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Branded jewellers are set for strong earnings momentum as CareEdge Ratings
projects ~35% revenue growth in FY26 and 20-25% in FY27
Mumbai, 27th April 2026: According to CareEdge Ratings, investment share in India’s gold consumption rises to 42% in CY25 from 29% in CY24. Investment demand surged to record levels globally and in India led by gold ETFs and bar-and-coin buying, reflecting safe-haven demand, diversification motives and geopolitical uncertainty.
CareEdge Ratings highlights that globally the
annual investment demand at 2,175 MT in CY25 smashed the previous record of
1,805 MT in CY20 led by ETF investment which contributed over 800 MT with
factors including diversification considerations, elevated geopolitical risks
and safe-haven demand supporting demand. The trend is also evident in India
with strong ETF investments by Indians in the last two years, adding 37.5
tonnes in CY25, more than the combined investment in last 10 years.
Global gold demand reached an all-time high in
CY25, rising ~8% y-o-y to ~5,000 metric tonnes (MT), driven primarily by robust
investment demand despite sharply higher gold prices and macroeconomic
headwinds. Central banks continued large-scale gold accumulation for the fourth
consecutive year, underscoring gold’s role in reserve diversification amid
geopolitical challenges.
While
Global gold ETF holdings grew 801 MT, second highest on record, bar and coin
buying accelerated to reach a 12-year high driven by safe-haven and
diversification motives. However, composition of gold consumption
globally has undergone a structural shift with the share of jewellery falling
by ~19% y-o-y to 33% in CY25, much below the 15-year average of ~50% – as
consumers responded to elevated prices by reducing discretionary jewellery
purchases. The trend is visible in Indian market as well where the share of
jewellery consumption fell below 60% of total gold purchases in CY25 compared
to long-term average of ~70%.
Speaking on Gold consumption patterns of Indian
investors, Akhil Goyal, Director, CareEdge Ratings said, “Gold
consumption patterns are witnessing a structural shift, with jewellery
accounting for less than 60% of India’s total gold purchases in CY25, compared
to a long term average of ~70%. Geopolitical uncertainty, momentum in gold
prices and portfolio diversification preferences are expected to continue
fuelling investment demand for gold, with its share in overall gold consumption
is projected at 35-40% in FY27.”
Gold prices have entered a more durable high-price
regime supported not by short-term speculative flows but by structural demand
shifts, sustained official sector buying and persistent global macroeconomic
and geopolitical uncertainty.
Strong spending on
jewellery by Indians despite record prices to aid branded jewellers’ fortunes
CareEdge
Ratings notes that Indian jewellery demand remains resilient despite record
gold prices with jewellery purchases rising ~10% y-o-y to ₹4.8 lakh crore in
CY25, reflecting consumers’ willingness to allocate higher wallet share to
jewellery. Indians’ total spending on jewellery purchases has grown at a
healthy compounded annual growth rate (CAGR) of 11% over CY21-CY25 indicating
continued appetite for the yellow metal. Though on value basis demand remained
resilient, volume has declined by 15% in CY25, which is reflective of the
price-sensitive nature of jewellery demand, where preferences shifted towards
lower-carat/lighter-weight jewellery.
CareEdge Ratings’ sample of six large, listed jewellers is expected to report stellar revenue growth of ~35% y-o-y in FY26 and 20-25% y-o-y in FY27 led by continued store additions, market share gains from accelerated formalisation of the sector and steady consumer appetite for gold despite the sustained price rise.
Average gross profit margin of CareEdge
Ratings’ sample of jewellers is projected to increase by 170-200 bps in FY26
led by inventory gains on unhedged gold. Profitability is likely to normalise
in FY27 with projected gross profit margin in the range of 14-14.5% on the expectations
of range-bound gold prices and profit before interest, lease rentals,
depreciation and taxation (PBILDT) margin in the range of 6.5-7% due to
front-loaded operating expenses on new stores.
It notes that retailers have continued their trend of healthy new store addition in FY26 to expand their retail presence in existing and new geographies with the cohort estimated to have added 310 stores in the year, the second consecutive year of 300+ new store additions. This represents the sector’s continued formalization amid shifting consumer preferences towards branded jewellers, supported by regulatory interventions in recent years.
However, new store addition as a percentage of existing stores
halved to 11% in FY26 from 20%+ over the previous three years, partly
attributable to a growing base, indicating cautious optimism towards expansion.
Expansion of retail footprint through the franchisee route remains the
preferred mode, considering its benefits in terms of lower incremental
inventory funding requirements. The share of franchisee stores in overall
retail presence of CareEdge Ratings’ sample of jewellers is estimated to
increase to 62% in FY26 from less than 60% in FY23.
Raunak Modi, Assistant Director, CareEdge Ratings said, “Domestic organised jewellery
retailers are expected to report revenue growth of over 35% year‑on‑year in
FY26, driven by steady consumer appetite for jewellery despite rising gold
prices, market‑share gains from accelerated sector formalisation and planned
store additions. This momentum is likely to continue in FY27, with revenue
growth projected at 20–25% year‑on‑year. Operating profit margin is also likely
to expand by 180-200 bps in FY26 supported by inventory gains, which is likely
to normalise to 6.5-7% in FY27 led by expectations of range-bound gold prices
and front-loaded operating expenses on new stores.”
