The report suggests that gold jewellery consumption by value is likely to continue witnessing double-digit growth in FY26, with an estimated increase of 12–14%
Mumbai: Domestic gold jewellery consumption is likely to decline by 9-10 per cent in 2025-26, mainly due to a 33 per cent surge in gold prices, a report said on Thursday.
The consumption of bars and coins increased 17 per cent and 25 per cent, respectively, in FY24 and FY25, reflecting investor preference for safe-haven assets amid global macroeconomic uncertainty and heightened geopolitical and trade tensions, Icra said in the report.
This trend is likely to persist in FY26, with demand for bars and coins likely to grow by around 10 per cent, accounting for 35 per cent of the total gold demand, it added.
The agency estimates that domestic gold jewellery consumption volumes to decline by 9-10 per cent in FY26, following the 7 per cent drop in FY25, even as investment demand will remain resilient.
Meanwhile, Icra anticipates domestic gold jewellery consumption by value to continue to witness double-digit growth in FY26, with an estimated increase of 12-14 per cent, notwithstanding a projected decline in volumes.
This is similar to the price-driven expansion seen in FY25 when the sector registered a 28 per cent rise in value, largely attributable to a 33 per cent surge in gold prices, the report said.
“Organised large retailers are expected to post revenue growth of 14-16 per cent YoY in FY26. This will be supported by continued gold price appreciation, planned retail expansion, and market share gains from the unorganised segment. A higher number of auspicious days in the fiscal is also expected to lend some support to demand, despite elevated prices and declining volumes,” Icra Senior Vice President and Group Head Jitin Makkar said.
In FY25, revenue growth for organised jewellers was driven largely by buoyant realisations, even as most players experienced volume contraction – except for a few that pursued aggressive store expansion, it stated.
This trend is expected to continue in FY26, supported by the sustained cultural importance of gold, stable wedding demand and a good number of auspicious days, it added.
Gold prices are expected to stabilise at current levels unless there are major global or geopolitical events influencing the price movements, the report said.
Icra estimates the industry’s operating margin to expand by approximately 30 basis points (bps) to 7.2 per cent in FY26, aided by scale efficiencies and favourable pricing.
However, net margin expansion is likely to be constrained by rising financing costs.
“Despite a projected 30 bps expansion in operating margins in FY26, net margin expansion will remain limited within 10 basis points due to higher financing costs stemming from elevated GML rates and increased working capital borrowings driven by high gold prices and planned store additions,” Makkar added.
