Jewellery shines despite demonetisation, posts good results

Demonetisation caused jewellery sales to dip for a couple of weeks in November, but the sector managed to put up a decent show in the October-December quarter.

According to industry reports, the consumer behaviour was influenced by two factors. Firstly, the price of gold declined by 11 per cent to end the quarter at Rs 27,900 per 10 grams. Secondly, a shift was witnessed in the consumer behaviour from large and heavy gold jewellery to lightweight diamond-studded gold ornaments.

This shift in consumer behaviour made companies such as Titan (part of the Tata Group, under the Tanishq brand), Rajesh Exports and Gitanjali Gems focus on the retail end rather than the bulk business. Titan reported a 13 per cent increase in net profit to Rs 255.7 crore, on sales growth of 13.9 per cent. Tribhovandas Bhimji Zaveri (TBZ) reported 89 per cent jump in net profit at Rs 6.1 crore.

Gitanjali Group's diamond jewellery brands like Nakshatra, Gili, Asmi, Sangini saw a phenomenal growth in sales this financial year. On an average, their reported growth was 48 per cent. Among others, Nakshatra reported 167 per cent growth, Gili 20 per cent, Asmi 130 per cent and Sangini 80 per cent

Mehul Choksi, the managing director of Gitanjali Gems, said that the consumer sentiment was in favour of gold till demonetisation and suddenly shifted towards diamond. On the impact of demonetisation on jewellery sales, Shrikant Zaveri, the chairman of Tribhovandas Bhimji Zaveri (TBZ), said that despite operating challenges, the jewellery retail chain achieved an overall sales growth, driven by better festive demand and increased redemptions from the Kalpavruksha gold accumulation scheme.