Top Gold Jewelry Selections from Motilal Oswal in Q1, offering up to 35% growth potential
In a positive turn of events for the jewellery sector, Motilal Oswal, a leading financial services company, has recommended buying shares of Titan, PN Gadgil, and Kalyan Jewellers, with potential upside of up to 35%. This optimistic outlook is driven by several key factors, including robust sales growth, strategic expansions, and strong consumer demand despite challenges like rising gold prices.
Starting with Titan, the Q1 sales update showed an impressive 18% domestic sales growth and 49% international growth, indicating strong overall momentum. Diverse verticals such as jewellery, watches, women's accessories, perfumes, and apparel all reported double-digit growth. Titan has also expanded its retail network by adding several new stores, further strengthening its market presence.
Despite gold price volatility, the company benefited from increased average ticket sizes and steady customer engagement. The growth was powered by brands like Tanishq, Mia, and Zoya, although domestic growth was mainly driven by higher ticket sizes rather than customer count growth.
PN Gadgil, another jewellery retailer, has shown resilience amid rising gold prices. The Q1 results reflected strong festive demand and consumer preference shifts, helping maintain growth. Like Titan, PN Gadgil is benefiting from strategic expansion and consumer engagement despite a challenging gold price environment.
Kalyan Jewellers, while less detailed in its Q1 sales, is part of Motilal Oswal’s top picks due to its strong position in the gems and jewellery market, good revenue from key segments like diamonds and gems, and a solid management team. The company is seen as capable of leveraging sustained consumer demand and price changes to improve earnings.
Factors driving potential upside across these stocks include continued strong sales growth despite gold price volatility, strategic retail expansions with the addition of new stores boosting market reach, shifting consumer buying behavior favoring lighter, lower-karat jewellery but with higher average spending, resilience of the jewellery retail sector amid global economic headwinds and rising gold prices, and positive brokerage recommendations based on Q1 performance and growth outlooks.
In specific instances, domestic sales for PN Gadgil recorded a healthy same-store sales growth of 18% in Q1FY26. PN Gadgil also posted 35% YoY growth on Akshaya Tritiya. However, it's worth noting that the absence of Gudi Padwa in the quarter impacted growth for PN Gadgil, as it occurred during Q1 in FY25, supporting performance.
Most jewellery retailers, including Titan, PN Gadgil, and Kalyan Jewellers, have delivered double-digit sales despite the recent uncertainty caused by rising gold prices. These elements collectively support the upside potential of up to 35% in the shares of these jewellers as per Motilal Oswal's analysis.
As of June 30, Kalyan Jewellers had a total of 406 stores, with 287 in India, 81 outlets of Candere, 2 stores in the US, and 36 stores in the Middle East. PN Gadgil, on the other hand, reported consolidated sales growth of 31% YoY despite volatility in gold prices and geopolitical tensions. The retail segment of PN Gadgil, which accounts for 70% of revenue, grew 19% YoY.
In conclusion, the jewellery sector appears to be thriving, with key players like Titan, PN Gadgil, and Kalyan Jewellers showing resilience and growth despite challenging market conditions. The potential upside of up to 35% in the shares of these jewellers as per Motilal Oswal's recommendations is a testament to their robust performance and growth prospects.
- The volatility in the market, particularly in gold prices, has not deterred the jewelry sector, as shown by the robust sales growth of companies like Titan, PN Gadgil, and Kalyan Jewellers.
- Investors looking at the finance sector may find potential upside in the stocks of these jewelry companies, as they have delivered double-digit sales despite the recent volatility in gold prices.
- The investing landscape of Defi and stocks has seen a shift towards jewellery, with companies like Titan, PN Gadgil, and Kalyan Jewellers benefiting from strategic expansions and consumer engagement.
- Business analysts suggest that the portfolio of a diligent investor could potentially benefit from the impressive growth of companies like Titan, PN Gadgil, and Kalyan Jewellers, even in the face of challenging market conditions.
- The stock-market performance of Titan, PN Gadgil, and Kalyan Jewellers has been resilient, with factors like continued sales growth, strategic retail expansions, and consumer preference shifts contributing to their growth prospects.
