Icra expects industry growth to moderate 8-10% YoY (in value) in FY2024 with volume growth likely to remain constrained by volatility Gold price projections amid global macroeconomic uncertainty and rising domestic inflation
Mumbai: Organized jewelry retailers are expected to post 12-15% revenue growth in 2023-24, mainly supported by planned expansion, a report said Tuesday. plans of most large companies.
Organized jewelers are expected to record revenue growth of 12-15% in FY24 despite the evolving macroeconomic environment and on a high base, in contrast to the industry’s expected growth of 8-10% annually.
Icra expects industry growth to moderate 8-10% YoY (in value) in 2024 with volume growth likely to remain constrained by expected volatility of gold prices in the context of global macroeconomic instability and rising domestic inflation.
However, India’s strong cultural affiliation with gold is likely to support the demand for gold jewelry during festivals and weddings.
“Most jewelry retailers are estimated to have recorded revenue growth exceeding 15% year-on-year in Akshaya Tritiya 2023. The strong retail expansion of most companies during the year 2023 coupled with a strong gold price increase (10-12%) may have supported Kaushik Das, Vice President and Co-Chair of Icra, said: “Revenue growth while output growth remains low due to low sales growth due to low volume growth due to low sales growth due to low growth in sales due to strong growth in revenue and growth. on a high basis, domestic inflation rises and gold prices fluctuate.
In terms of profitability, operating margin is likely to remain at a comfortable and stable level around 7.5-8% over the next two years.
With debt protection ratios and liquidity positions among sample pool players expected to remain comfortable, Icra added, supported by higher earnings thanks to improved operational scale, industry outlook will be stable.
While Icra predicts the operating margins of organized players will see some throttling in 2024 due to higher operating costs for new stores and increasing competition, profits The benefits of economies of scale and the potential for inventory increases for some jewelers in 2024 will likely support operating margins in the 7.5-8% range in the coming years.
Although debt levels are expected to grow to finance inventory for new stores, debt protection metrics for larger players are estimated to remain comfortable, as reflected by the ability estimated interest payments are more than 5 times and total external debt to tangible net worth ratio reported, less than 1.5 times in the next 12-18 months, compared with 5.6 times and 1.4 times respectively. estimated for fiscal year 2023.
