India’s organised gold jewellery retailers are expected to see a slower decline in sales volumes in FY27, with credit profiles remaining stable despite elevated gold prices and higher working capital requirements, according to Crisil Ratings. Retail jewellery volumes are projected to contract 4-6 per cent this fiscal, compared with an 8 per cent decline last fiscal, while industry revenue is expected to grow 21-23 per cent.The assessment is based on an analysis of 76 organised gold jewellery retailers, accounting for around 33 per cent of industry revenues. Gold prices remain elevated following a 56 per cent surge last fiscal, while the increase in import duty to 15 per cent from 6 per cent in May 2026 has added to affordability pressures. However, moderating price increases and subsequent corrections have supported improving footfalls and conversion rates ahead of the festive and wedding season.Organised retailers are expected to gain market share as consumers increasingly prefer established brands offering greater transparency. Gold exchange programmes and savings schemes are also supporting demand. Consumers, however, remain price-sensitive and are shifting towards lighter-weight and lower-carat jewellery. Investment demand for coins and bars, which accounts for nearly 40 per cent of overall gold demand, is projected to decline 4-5 per cent this fiscal.Operating margins are expected to moderate by 60-80 basis points from last fiscal’s 9.3 per cent to around 8.5-8.7 per cent as inventory gains from rising gold prices taper and retailers increase spending on promotions and customer engagement. Higher gold prices are also expected to increase inventory funding requirements. Store additions are projected at 7-9 per cent of existing networks over the next two fiscals, compared with 12-15 per cent over the previous two fiscals.Despite higher borrowing requirements, Crisil expects credit metrics to remain comfortable, supported by cash accruals, inventory management and measured expansion. The total outside liabilities-to-adjusted net worth ratio is projected at 1.1-1.2 times in FY27, compared with 1.3 times as of March 31, 2026. Interest coverage is expected to remain at 6.5-7 times. Crisil said the sector’s performance will depend on gold price movements, changes in import duties and regulations, and consumer sentiment.
