Investor interest in the jewellery sector is growing, but according to Helios Capital's Dinshaw Irani, this isn't a speculative play on fluctuating gold prices. Instead, the fund house sees a long-term structural opportunity driven by fundamental shifts in consumer behaviour and market dynamics.
Formalisation Driving Growth in Jewellery Market
Irani, speaking to BTTV, emphasized that Helios Capital is focused on the increasing formalisation of the Indian jewellery market. He stated, “It’s agnostic of gold prices. We’re not even looking at the gold prices out here.” The real trigger for growth, he argues, is the steady migration of buyers from informal, unorganised sellers to established, branded, and organised jewellers.
This shift is significant because the unorganised segment still holds a substantial share of the jewellery market. As consumer trust in branded players strengthens, listed companies are well-positioned to capture a disproportionate share of new demand, driving their growth irrespective of bullion price movements.
Titan and Lalithaa Jewellery Mart Highlighted
Helios Capital points to established players like Titan as prime examples of this thesis in action. Irani noted that Titan's jewellery business continues to demonstrate impressive growth rates, indicating ample room for expansion for both existing and new entrants in the organised segment. This performance offers a blueprint for how organised jewellers can thrive even in a volatile macroeconomic environment, by delivering visible growth that investors increasingly reward.
The fund house also highlighted its participation in the IPO of Lalithaa Jewellery Mart. Irani cited Lalithaa’s appeal in its competitive pricing strategy, offering some of the lowest making charges in the market. This factor can significantly enhance value perception among price-sensitive customers, particularly in its strong southern market presence.
While acknowledging that Lalithaa Jewellery Mart does not hedge its gold position, Irani suggested this risk is manageable due to the largely daily nature of its gold exposure, which is unlikely to cause major earnings shocks from gold price swings alone. The company is reportedly performing well in its regional stronghold.
A Niche of Growth Amidst Market Volatility
This investment stance from Helios Capital is particularly notable given the current fragile broader market, characterised by selling pressure, weak breadth, and elevated volatility. It reflects a broader investment preference for niche, scalable consumption stories where market share gains can effectively counteract wider economic noise.
For investors, the clear message is that the underlying narrative for jewellery stocks has evolved beyond mere metal prices. The focus is now on the retailers themselves – those gaining consumer trust, expanding their scale, and capturing a larger share of a formalising market.