Best Jewellery Stocks in NSE India (2024)

What are Jewellery Stocks?

Jewellery stocks represent shares of companies involved in the design, production, and sale of jewellery, including gold, diamond, and other precious metals. These companies operate in both domestic and international markets, offering a variety of jewellery products to consumers. 

By investing in jewellery stocks, investors can gain exposure to the jewellery industry’s growth, which is influenced by factors such as rising incomes, consumer preferences, and fluctuating gold prices. Economic conditions and market trends can also impact the performance of these stocks, making them an option for investors looking to diversify their portfolios.

Brief Overview of the Jewellery Industry in India

The jewellery industry plays a significant role in India’s economy, contributing around 7% to the country’s GDP and about 15% to total exports. It is a major source of employment, with over 4.64 million people working across various segments of the sector. India is one of the leading players in diamond cutting and polishing, accounting for approximately 75% of the world’s polished diamond exports.

The Indian government recognises the importance of the jewellery shares sector and has implemented policies to promote investment, technology upgrades, and skills development. 100% Foreign Direct Investment (FDI) is allowed in the jewellery sector, attracting foreign investors. Recent agreements, such as the Comprehensive Economic Partnership Agreement (CEPA) with the UAE, aim to boost exports by providing duty-free access to new markets. With growing demand both domestically and internationally, the jewellery industry is projected to expand steadily, contributing to the long-term growth of jewellery stocks in India.

How to Invest in Jewellery Stocks in India?

Here is how you can invest in jewellery stocks in NSE:

1. Open a demat/trading/stockbroker account. You can open a demat account with smallcase!
2. Conduct thorough research into the top jewel stocks in India that are of interest to you. Investors can use tools like the Tickertape Stocks Screener to do this. The screener offers 200+ built-in filters to choose from, and investors can choose the parameters to research and generate different jewellery shares lists. You can also check out more about Gold as an investment here!
3. Place a ‘Buy’ Order on the top jewel stocks of your choosing. 

How to Invest in Jewellery Stocks via smallcase?

A portfolio combining equity and gold efficiently protects capital and builds wealth sustainably. Gold’s performance compensates for poor equity returns during adverse macroeconomic events or periods of high inflation.

The Equity & Gold smallcase allocates 70% to Nifty Bees and 30% to Gold Bees. The equity portion drives investment growth, while the gold component shields the portfolio from significant losses. Investors interested in jewellery stocks can consider this smallcase!

How to Select the Top Jewellery Stocks for Your Portfolio?

Here are a few steps you can follow to select the best jewellery stocks to buy for your portfolio:

1. Diversified product lines: You can choose jewellery shares offering a variety of products to reduce dependency on a single segment.
2. Analyse financial health: It can be helpful to examine profit margins, return on equity (ROE), and debt levels to assess stability. 
3. Check distribution network: You can prioritise jewellery company stocks with a robust and expanding reach, both within India and internationally.
4. Monitor consumer trends: It is can be beneficial to stay aware of shifts in demand, such as gold or luxury jewellery, and how companies adapt to these trends.
5. Evaluate management: You can look into the company’s leadership and ability to effectively handle market challenges.
6. Research market presence: Focusing on companies, including gold jewellery stocks, with a strong market position and consistent revenue growth can be helpful.

Features of Jewellery Stocks in India

Here are a few key features of the best jewellery stocks in India:

• Brand Recognition: Jewellery stocks in India included in the top jewellery stock lists often feature companies with strong brand recognition. Well-known brands benefit from customer trust and loyalty, contributing to steady sales and long-term growth. Check out the top silver stocks to invest in here!
• Product Quality: Companies offering high-quality, well-crafted jewellery tend to lead the market. A reputation for premium products helps maintain customer loyalty and supports consistent demand.
• Design Innovation: Jewellery companies that regularly introduce new designs and materials attract trend-conscious consumers. Innovation in design helps these companies stay competitive in a fast-evolving market.
• Sustainability Initiatives: Many Indian jewellery companies are increasingly adopting ethical sourcing and sustainable practices. This not only appeals to environmentally conscious consumers but also enhances the brand’s reputation.

Benefits of Investing in Jewellery Stocks in India

• Capital Appreciation: Driven by rising demand for gold and precious stones.
• Inflation Hedge: Jewellery stocks benefit from increasing gold prices, protecting investments during inflation.
• Stable Demand: The consistent cultural and religious significance of gold ensures steady demand and market stability.
• Diversified Portfolios: Jewellery companies often deal in gold, diamonds, and other precious stones, reducing risk and ensuring steady returns.
• Export Growth: Significant opportunities from India’s strong jewellery export markets, especially to the Middle East and U.S.
• Government Support: Policies like hallmarking and reduced import duties increase sector credibility and boost investor confidence.

Risks of Investing in Jewellery Stocks in India

• Volatile Gold Prices: Heavy reliance on fluctuating global gold prices can impact stock performance.
• Regulatory Changes: New government policies, such as higher import duties or taxes, may reduce profitability.
• Economic Downturns: Reduced consumer spending on luxury goods during tough times can lower sales and profitability.
• Exchange Rate Risks: Fluctuations in currency values increase the costs of imported raw materials, squeezing margins.
• Intense Competition: High competition in the sector may drive down profit margins and slow growth.
• Consumer Sentiment: Shifts in discretionary spending or cultural buying patterns could reduce demand for jewellery.

Factors to Consider When Investing in Jewellery Stocks

When investing in jewellery stocks, it is important to evaluate several key factors that can impact the performance of your investment. Here are a few factors that you can consider:

• Price Volatility of Precious Metals: Jewellery stocks are influenced by the prices of gold, silver, and diamonds, which fluctuate based on global market conditions. You can keep an eye on changes in the prices of these raw materials, as they directly affect the profitability of jewellery companies.
• Company Financial Health: You can assess the financial stability of the jewellery companies you are considering.  A strong balance sheet indicates a company’s ability to weather economic fluctuations and remain competitive.
• Regulatory and Tax Environment: Government regulations, including import/export duties and taxation, can significantly impact the costs for jewellery companies. You can stay informed about changes in trade policies, taxes on precious metals, and other relevant regulations, as these can affect a company’s financial performance.
• Supply Chain Management: A company’s ability to manage its supply chain is critical. Disruptions in the supply of raw materials or inefficiencies in manufacturing can affect product availability and pricing.

To Wrap It Up…

Investing in jewellery stocks in India offers long-term growth potential, driven by the country’s deep cultural connection to gems and precious metals. However, like any investment, it comes with risks. Conducting thorough research and staying informed about market trends and company performance is essential. For those looking to diversify their portfolios, jewellery stocks could provide a balanced option, but it is advisable to consult a financial advisor to ensure these investments align with your financial goals and risk tolerance.