Demand for Indian gold jewellery to rise

Mumbai (May 13)  India's gems and jewellery exporters are set to shine brighter than domestic retailers. Positive signs from export destinations such as higher disposable income and consumer spending as well as improvements in consumer confidence is set to support export volumes of gems and jewellery, maintain analysts. An economic recovery is also set to benefit exporters.

Indian exporters are likely to report moderate revenue growth of 4% to 5% year on year in FY15, according to analysts, and operating margins are expected to be in the range of 3.5% to 4%.

However, there is a downside. If gold prices increase further or if regulatory risks persist, this could impact the operating profitability of the gems and jewellery sector and thus their credit profile.

Geopolitical pressures too could have an impact, analysts have pointed out: uncertainty in Russia and Ukraine, or any financial turbulence in the global economies including that of China could severely affect the weak credit profile of most Indian gems and jewellery exporters.