Motilal Oswal bullish on organised jewellery retailers, initiates coverage on Kalyan Jewellers, Senco Gold with 'buy'
Kalyan Jewellers jumped 5.4% to ₹447 apiece in today's early morning trade, while those of Senco Gold gained 2.6% to ₹1,055 apiece after domestic brokerage firm Motilal Oswal initiated coverage on these stocks with a 'buy' rating. The brokerage set a target price of ₹525 for Kalyan Jewellers and ₹1,300 for Senco Gold.
Additionally, Motilal Oswal retained its 'buy' call on Titan, raising its target price to ₹4,150 apiece.The brokerage is optimistic about the jewellery sector as it believes consumers are increasingly shifting towards organised players. In FY18, the jewellery market was valued at USD 48–50 billion, with the organized market accounting for a 20–22% share.
From FY18 to FY24, the total market reported a CAGR of 9–10%, while the organized market registered a CAGR of over 17%. The past three years have been especially strong for the industry, which saw a 20%–30% value growth for the total and organized market segments.Also Read: Explained: Why are central banks accumulating gold in large quantities?Industry estimates cited by the brokerage project the jewellery market to achieve a 15–16% CAGR, reaching USD 145 billion by FY28.
The organized market is expected to grow at over 20% CAGR, accounting for 42-43% of the total market.Several factors are driving this rapid growth, including rising disposable incomes, an improved mix for regular wear beyond weddings and investments, enhanced product offerings (such as design and diamonds), trust-building through hallmarking, and a better buying experience at organized retail outlets.Kalyan Jewellers is one of the largest jewellery retail chains in India, with a strong network of over 217 stores across the country. At first, the company focused more on the company-owned
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