Gold prices have experienced a dramatic 54% surge over the same period compared to last year's festive season, prompting significant changes in consumer purchasing behavior. According to The Times of India, this sharp price increase is forcing jewellery buyers to explore alternatives, with diamond-studded ornaments priced between ₹10,000 and ₹1 lakh becoming increasingly popular. The trend is particularly evident during the Navratri season, which has begun on a strong footing for studded jewellery as shoppers seek value-for-money options while staying within budget constraints. As reported by industry experts, smaller diamonds have become more affordable, with prices around 25% lower than during the 2025 festive season, making studded jewellery an appealing alternative to expensive gold ornaments. Arun Narayan, chief executive of Titan's jewellery division, confirmed that customers are spending more time researching products online before making purchases and comparing exchange offers before visiting stores, as reported by Mint.
Despite rising gold prices and macro headwinds, Indian jewellery stocks delivered robust Q2FY27 performance with Titan reporting 25% year-on-year growth in revenue for Q2 FY27, according to the company's quarterly update on October 6. Kalyan Jewellers reported consolidated revenue growth of more than 26% year-on-year in Q2FY27, supported by healthy same-store sales growth across key markets. PC Jeweller achieved approximately 28% year-on-year growth in consolidated revenue for the quarter ended September 30, 2026. However, the broader market showed divergent performance with Sky Gold gaining 56% over the past three months, followed by PC Jeweller at over 40% and Kalyan Jewellers rising 20%, while Thangamayil Jewellery declined 26% and Goldiam International fell 19%. As reported by The Economic Times, jewellery and premium categories sustained demand despite gold prices rising 28% year-on-year, supported by festive purchases, premiumisation and continued market share gains by organised players.
Recent market data reveals significant shifts in Indian jewellery consumption patterns, with Indian jewellery demand falling 15% year-on-year to 75.1 tonnes in the April-June quarter, while value rose 34% to ₹1.132 trillion according to the World Gold Council's Gold Demand Trends: India Focus Q2 2026. This trend demonstrates consumers adapting to elevated gold prices through lighter-weight jewellery, studded designs and gold-exchange purchases. The market is experiencing a fundamental shift where higher gold prices can increase jewellery sales value even when consumers buy less by weight, as reported by the World Gold Council. This dynamic highlights the growing importance of design, craftsmanship, and brand value beyond traditional material composition, with consumers increasingly preferring lightweight gold jewellery where earlier they bought necklaces weighing 100 grams, now settling for 60 grams. As noted by industry experts, consumers have adjusted to the higher import duty and elevated gold prices rather than walked away, trading in old gold and shifting to studded jewellery, with organised players benefiting from scale and strong exchange programmes.
Jewellers are responding to the price sensitivity by turning to 18-carat, 14-carat and 9-carat gold for pieces to keep them within reach of a wider range of buyers. As reported by The Times of India, this approach allows consumers to opt for lighter jewellery without compromising on design. Arun Narayan, chief executive of Titan's jewellery division, noted that a lot of jewellery that we brought out in 18 karat is getting a lot of interest, or even lower caratages in diamond jewellery, as reported by Mint. Joy Alukkas, chairman of Joyalukkas, noted that diamond jewellery sales have witnessed an uptick as it fits the budget of consumers using lower caratage gold. Senco Gold & Diamonds expects sales in the everyday use category to rise 20% this festive season, with earrings, rings, pendants and bracelets in the price range of ₹30,000-₹1 lakh showing fast movement. The shift is particularly noticeable in the ₹10,000-₹1 lakh segment, where buyers are finding fewer options in gold jewellery, with Colin Shah of Kama Jewelry stating there is hardly any good gold jewellery in this price bracket, driving consumers towards diamond alternatives. According to The Economic Times, B2B jewellers are expected to continue delivering strong growth, broadly in line with the healthy B2C jewellery demand trend, driven by ongoing capacity expansion, product portfolio diversification, and market expansion through new customer additions.
Looking ahead to H2FY27, growth momentum could extend beyond Q2, though gold prices remain an important factor in sustaining demand. As reported by The Economic Times, growth is likely to be driven by ongoing capacity expansion, expansion of product portfolio beyond core categories, and market expansion through new customer additions. However, valuation discomfort remains a key concern, with Titan having corrected over 11% from early-September levels and trading at roughly 70 times trailing earnings, requiring annual earnings growth of around 18-20% just to hold its price. Experts caution that the sector must deliver sustained earnings growth of more than 20% to justify current valuations, with any post-festive slowdown in same-store sales or margin pressure from heavy old-gold exchange potentially weighing on stocks trading at richer multiples. Nomura analysts warn that the benefits of high gold prices could fade if gold prices remain at these levels, indicating that revenue growth may see optical moderation on a quarter-on-quarter basis from Q3 onwards, as reported by Mint. The shift in the festive calendar, with Navratri beginning on October 11 this year against late September last year, and Dhanteras and Diwali falling on November 6th and 8th respectively, will continue to influence demand patterns throughout the remainder of FY27.
