Shares of Motisons Jewellers turned ex-split on Friday, November 08, in the ratio 1:10. Following this development, the stock rose 5 per cent to the day’s high of ₹32.2 apiece. The company in mid-September had announced the stock split in the ratio of 1:10.
In the previous trading session, the company’s shares closed at ₹307. Following the 1:10 stock split, where each existing share was divided into 10 shares, the price was adjusted to ₹30.7 per share.
Gold-related stocks have gained strong traction in recent months, fueled by the sustained demand for gold despite rising prices and a noticeable shift in consumer preference from unorganised to organised jewellery retailers.
The recent cuts in customs duties on gold and silver announced in the Union Budget also sparked a rally in jewellery stocks.
There has been a steady rise in jewellery demand in India, driven by rising disposable incomes, a shift towards regular-wear jewellery beyond traditional wedding pieces, a growing interest in investment jewellery, diversified product offerings such as modern designs and diamond jewellery, increased trust from hallmarking, and an enhanced shopping experience at organized retail stores.
Furthermore, rising gold prices have also benefited organized jewellery players like Motisons Jewellers, who gain from inventory appreciation as prices climb.
Organized jewellery players hedge 70 per cent–90 per cent of their gold but still see a gain from the unhedged portion as gold prices rise.
Meanwhile, gold prices experienced some pressure this week due to a strengthening US dollar, though they continue to trade near all-time highs. Prices closed October with a gain of 4.21 per cent, marking the third consecutive month of increases.
As per recent estimates, the jewellery market is projected to reach $310.90 billion globally by 2028 and grow at a CAGR of 3.53 per cent from 2024 to 2028. India, currently the world's largest revenue generator in this market, is expected to reach $81.26 billion in 2028 with a CAGR of 4.59 per cent over the same period.
Several factors are likely to fuel growth in the Indian jewellery industry, including key government initiatives such as mandatory hallmarking of gold, the gold monetisation scheme, and reductions in import duties on gold and silver, which are strengthening the industry’s framework.
Additionally, the expanding middle-class population, an increase in the female workforce, and a growing interest in branded jewellery are also contributing to increased demand.
The company shares, which were listed on the exchanges in December 2023, have shown a strong upward trend, gaining nearly 500 per cent to date. Motisons Jewellers specialises in jewellery crafted from gold, diamonds, and kundan and also offers products made from pearls, silver, platinum, and other precious and semi-precious metals.
For the September quarter, the company reported revenue from operations of ₹109 crore, up from ₹90 crore in Q2 FY24, with profit after tax (PAT) rising to ₹10 crore compared to ₹5.18 crore in the same quarter last year. In the preceding June quarter, the company reported a PAT of ₹6.33 crore.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
