Gold jewellery retailers' revenue may rise 12-15% in FY23: CRISIL

"That will keep the credit outlook for organised jewellers stable’ next fiscal year, despite higher capital spending and inventory,” it said.

This is as per an analysis of 82 of them rated by CRISIL Ratings, which accounts for 40 per cent of the sector’s revenue.

CRISIL said jewellery demand is seen steady next fiscal year, with volume growing 8-10 per cent to pre-pandemic levels of 600-650 tonne, owing to normalising operations, store additions and gold prices sustaining above Rs 50,000 per 10 gram.

CRISIL Ratings Senior Director Anuj Sethi said, "Revenue growth would have been even higher next fiscal but for the Russia-Ukraine conflict, which have cranked up gold prices to Rs 55,000 per 10 gram.”

While prices have corrected a touch, continuing volatility will constrain volume growth in the first quarter of next fiscal year, ahead of the wedding and festive seasons, due to partial deferral of purchases, he said.

While operating profitability is expected to moderate to 6.5-7 per cent this fiscal due to limited inventory gains, and more expenditure on rentals, employees and advertisement, higher operating leverage will help restore margins to the pre-pandemic levels of 7.3-7.5 per cent next fiscal year.

With demand stabilising, CRISIL said business expansion will gather pace next fiscal year to the pre-pandemic levels of Rs 200-250 crore per annum.

Any fresh waves of the pandemic, and change in consumer spending on jewellery and import duty because of higher imports widening India’s current account deficit will bear watching, it added.