Gem & Jewellery Stocks Opportunities Galore For Value Investors

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Sector Overview

Over the years, the G&J sector has gained prominence in the country on the back of its dual utility of improving aesthetics as well as providing a reliable investment value. The G&J market comprises of four major segments: diamond-studded jewellery, gold jewellery, silver jewellery and precious and semi-precious gemstones and its jewellery.

India is relatively smaller market for the diamond-studded jewellery with about 7 percent market share. However, it is a key market for gold jewellery, constituting about 27 percent of the global gold jewellery market. A major chunk of gold jewellery manufactured in India is for domestic consumption, whereas a major portion of polished diamonds or finished diamond jewellery is exported.

The southern Indian states account for about 37 percent of the country’s total gold demand, followed by the western region with about 32 percent, northern region with about 18 percent and eastern region with about 13 percent of the total demand. The demand for diamond-studded jewellery in India remains higher in the western and northern regions as compared with the southern and eastern regions, which are predominantly gold jewellery consuming markets.

The sector provides employment to over 2.5 million people and is home to more than 500,000 players, with the majority being small players. Also, the G&J sector contributes 6 to 7 percent to our GDP. Based on the potential for growth, the industry has been declared as a focus area for export promotion. India is the largest exporter of gems and jewellery and the industry plays a vital role in terms of foreign exchange earnings with UAE, US, Russia, Singapore, Hong Kong, Latin America and China being the biggest importers.