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Time of India
41 minutes ago
- Business
- Time of India
ICRA Hospitality Outlook: ICRA Lowers Hospitality Sector Outlook to 'Stable' for FY2026 Amid Growth Moderation, ET TravelWorld
Advt By , ETTravelWorld Join the community of 2M+ industry professionals Subscribe to our newsletter to get latest insights & analysis. Download ETTravelWorld App Get Realtime updates Save your favourite articles Scan to download App Ratings agency ICRA has revised the outlook for the Indian hospitality industry to 'Stable' from 'Positive', projecting a normalisation in revenue growth for FY2026 after three consecutive years of double-digit expansion. Revenue is expected to grow at a more modest pace of 6–8 per cent year-on-year, on the back of a high base and temporary disruptions earlier in the occupancy for premium hotels is estimated at 72–74 per cent in FY2026, a marginal increase from the 70–72 per cent range seen in the previous two financial years. Average room rates (ARRs) are forecast to rise to INR 8,200–8,500, slightly up from INR 8,000–8,200 in FY2025, supported by limited supply and hotel refurbishments. Jitin Makkar , Senior Vice President and Group Head – Corporate Ratings at ICRA, noted: 'After three years of strong demand, driven by domestic leisure, MICE, and business travel, the sector's growth is expected to moderate in FY2026. The impact of terror attacks in April 2025 was temporary and sentiment has largely recovered.'While foreign tourist arrivals may remain subdued in the short term, domestic tourism continues to drive the sector, aided by infrastructure improvements, better air connectivity, and growth in MICE events following the opening of new convention sample of 13 major hotel companies is projected to maintain operating margins of 34–36 per cent in FY2026, supported by cost rationalisation and asset-light expansions. However, margin performance may vary depending on renovation activity and rising staffing industry's financials are expected to remain healthy, with improved credit metrics. Interest coverage is projected to exceed 2x, and Debt/OPBITDA is likely to remain under 5x, reflecting improved balance sheets following recent however, continues to trail demand. ICRA's premium room inventory data across 12 major cities shows a compound annual growth rate (CAGR) of 4.5–5.0 per cent from FY2023 to FY2026. Most additions are coming through management contracts and leases, while greenfield projects are limited to suburbs due to land constraints in metro areas.
Mint
5 days ago
- Business
- Mint
Titan to Kalyan Jewellers: Is it wise to buy jewellery stocks amid soaring gold prices? EXPLAINED
The rising gold prices act as a double-edged sword for jewellery stocks, as they can lead to inventory gains but dent demand, which could impact the profitability. With gold prices once again eyeing the ₹ 1,00,000 mark in the spot market, the spotlight is back on the jewellery companies like Titan, Kalyan Jewellers and Senco Gold, which have showcased a mixed performance so far in 2025. While the market leader Titan has gained 7% year-to-date (YTD) amid a 26% rally in gold prices, other top jewellery stocks – Kalyan, Senco and Motisons – have lost between 28% and 40%. However, despite the mixed show, analysts remain largely positive on the branded jewellery players. They believe that while the short-term outlook is hazy, these companies will continue to do well in the long run, given strong demand and a shift towards organised players. Sky-high gold prices create a complex landscape for jewellery companies, said Vinit Bolinjkar, Head of Research, Ventura. While high gold prices can boost revenue for companies dealing in gold jewellery due to higher per-unit sales value, they also suppress consumer demand for physical jewellery, particularly in price-sensitive markets. In India, jewellery demand slumped 25% YoY in volume in Q1CY2025, he observed. However, despite the slump in demand, ICRA projects domestic gold jewellery consumption by value to continue to exhibit double-digit growth in FY2026, with an estimated increase of 12-14%. This trend, ICRA said, is similar to the price-driven expansion seen in FY2025, when the sector registered a 28% rise in value, largely attributable to a 33% surge in gold prices. The current fiscal year is expected to follow a similar trajectory. According to Jitin Makkar, Senior Vice President and Group Head, ICRA, 'ICRA's sample of 14 large retailers—representing approximately two-thirds of the organised market—is expected to post revenue growth of 14–16% YoY in FY2026. 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.' These estimates come, even as ICRA expects domestic gold jewellery consumption volumes to decline by 9-10% in FY2026, following the 7% drop in FY2025. However, ICRA added that investment demand (coins and bars) will remain resilient. According to a Reuters report, quoting CFO Ashok Sonthalia, Titan's jewellery business, which accounts for nearly 90% of its total revenue, is expected to grow between 15-20% in FY26 amid demand from affluent Indians. Further explaining the impact of rising gold prices, Boljinkar said, "Most organised jewellers use average-cost accounting, so a rising gold curve fattens reported gross margins until prices plateau. Each $100/oz move in gold adds roughly 60-80 bps to operating margin in the following quarter for inventory-heavy players such as Titan and Kalyan." The bullish outlook by analysts is further driven by the organised jewellery sector's robust Q4 FY25 performance, despite the record-high gold prices. Titan Company led the pack with a ~19% year-on-year rise in jewellery revenue, while net profit climbed 13% to ₹ 871 crore. Despite elevated input costs, the company maintained its double-digit EBIT margins and announced plans to open 40–50 new Tanishq stores in FY26 to deepen its footprint beyond metro cities. Kalyan Jewellers reported a 37% jump in revenue to ₹ 6,182 crore, with PAT up 36% to ₹ 188 crore, driven by a 25% surge in same-store value and aggressive expansion across North and West India. Senco Gold, with a stronghold in Eastern India, logged a 19% increase in revenue and an impressive 94% growth in PAT to ₹ 62 crore. The company attributed its performance to vibrant wedding-season demand and a higher contribution from diamond jewellery, with non-East stores now accounting for 18% of total sales. Regional player Thangamayil Jewellery also saw revenue grow to ₹ 1,381 crore with a net profit of ₹ 31 crore, highlighting the resilience of rural demand amid rising gold prices. According to CA Jashan Arora, Director, Master Trust Group, said that many players have shown some concerns about elevated gold prices, which have increased working capital requirements and intensified competition, particularly from unorganised players. "Despite these challenges, branded jewellers have shown resilience, leveraging their reputation for quality and brand value to capture market share from smaller competitors. The recent shift in what consumers prefer, leaning towards organised players, along with a strong demand for gold jewellery, paints a bright picture for the market. That said, seasonal trends and a higher baseline from the festive quarter have slowed down growth a bit. This means investors should keep an eye on companies that have solid balance sheets and smart hedging strategies to handle any short-term challenges," said Arora. He added that a possible drop in gold prices could, in fact, encourage retail purchases, boosting topline growth for jewellery companies. Sneha Poddar, VP - Research, Wealth Management, Motilal Oswal Financial Services, also remains positive on jewellery stocks amid rising disposable income, shift to organised players and demand for regular-wear (beyond wedding and investment led). "As per industry estimates, the jewellery market is expected to see 15-16% CAGR to reach USD145b by FY28, with organised/formal market likely to deliver +20% CAGR to reach 42-43% of the total market. Several Indian jewellery companies have continued to perform well in Q4FY25 despite high gold prices, suggesting a selective buying opportunity in jewellery stocks with preference towards quality brands with scale and balance sheet strength," said Poddar. Commenting on which jewellery stocks to buy, Boljinkar said companies like Titan Company could be a strong long-term bet. "The company has the largest market share in wedding and everyday jewellery, omnichannel. At 45X FY28 P/E, the stock looks optically expensive but justified by 20% earnings CAGR and strong balance sheet," he added. Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
India Gazette
29-05-2025
- Business
- India Gazette
Gold jewellery consumption set for double-digit growth despite volume dip: ICRA
ANI 29 May 2025, 14:40 GMT+10 New Delhi [India], May 29 (ANI): Domestic gold jewellery consumption in India is projected to expand by a significant 12-14 per cent in value terms in fiscal year 2026, according to a recent report by ICRA. Gold prices surge by 33 per cent in FY25, ICRA says prices will continue to surge 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,' said Jitin Makkar, Senior Vice President and Group Head, previous fiscal year saw a substantial 28 per cent increase in the value of gold jewellery consumption, largely driven by a 33 per cent surge in gold prices. ICRA anticipates a similar pattern in the current fiscal, with gold prices currently trending approximately 20 per cent higher than the FY2025 this robust value growth, ICRA forecasts a decline of 9-10 per cent in domestic gold jewellery consumption volumes in FY2026, after a 7 per cent drop in to the report, 'consumption of bars and coins had risen by 17 per cent and 25 per cent, respectively in FY2024 and FY2025, reflecting investor preference for safe-haven assets amid global macroeconomic uncertainty and heightened geopolitical and trade tensions.' ICRA says this trend for demand of bars and coins is likely to grow by around 10 per cent, accounting for 35 per cent of the total gold report also indicates that while operating margins for jewellers are expected to improve by approximately 30 basis points to 7.2 per cent in FY2026, net margin expansion may be limited due to higher financing costs.'Despite a projected 30 bps expansion in operating margins in FY2026, 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,' Jitin Makkar added. (ANI)
Time of India
29-05-2025
- Business
- Time of India
Gold jewellery sales set for double-digit growth despite volume dip
NEW DELHI: India's domestic gold jewellery consumption is expected to grow by 12-14 per cent in value during fiscal year 2026, as per an ICRA report. Following a 33 per cent rise in gold prices in FY25, ICRA predicts further price increases 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," Senior Vice President and Group Head, ICRA Jitin Makkar said, according to ANI. Gold jewellery consumption saw a sharp 28% rise in value last fiscal year, mainly due to a 33% jump in gold prices. According to ICRA, a similar trend is expected this year, with gold prices currently about 20% higher than the FY2025 average. However, despite the rise in value, ICRA projects a 9–10% drop in domestic gold jewellery volumes in FY2026, following a 7% decline in FY2025. According to the report, "consumption of bars and coins had risen by 17 per cent and 25 per cent, respectively in FY2024 and FY2025, reflecting investor preference for safe-haven assets amid global macroeconomic uncertainty and heightened geopolitical and trade tensions." The demand for bars and coins is expected to increase by approximately 10 per cent, representing 35 per cent of total gold demand, as per ICRA's analysis. The analysis suggests jewellers' operating margins will increase by about 30 basis points to 7.2 per cent in FY2026, though net margin growth will be restricted due to increased financing expenses. "Despite a projected 30 bps expansion in operating margins in FY2026, 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. Stay informed with the latest business news, updates on bank holidays and public holidays . AI Masterclass for Students. Upskill Young Ones Today!– Join Now
