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Last Updated:<\/span>September 25, 2025, 13:24 IST<\/time><\/p>\nGold price surge boosts jewellery firms’ revenues on paper, but analyst warns real profits and volumes are shrinking.<\/h2>\n<\/p>\n\n\n\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/p>\nJewellery Firms\u2019 Balance Sheets Shine with Gold, But Core Business Weakens<\/p>\n<\/figure>\nThe sharp surge in gold prices has lured investors to reconsider investment in listed jewellery companies that appear stronger on paper, with reported revenues swelling and inventories reflecting higher valuations, in the past two quarters.<\/p>\nHowever, an industry insider cautions that much of this growth is illusory. \u201cInventory in stock is sitting on paper profits, while actual profitability from operations remains much thinner,” says business analyst and industry veteran Prem Soni.<\/p>\nTurnover Up, Volumes Down<\/h3>\nThe mismatch is stark: while turnover has surged, volume growth has declined and core operating margins have thinned. Higher gold prices artificially inflate revenues, but the actual number of jewellery pieces sold is stagnating or shrinking.<\/p>\nThis trend creates a risk for investors who focus only on headline numbers. \u201cInvestors chasing only top-line growth might be overvaluing these companies,” Soni warns.<\/p>\nJewellery Firms Acting as Gold Price Proxies<\/h3>\nAnalysts note that jewellery firms are increasingly behaving like proxies for gold price movements rather than pure consumer businesses. When gold prices rise, turnover swells; when prices fall, balance sheets contract.<\/p>\nThe true strength of these companies lies not in commodity price swings but in labour charges, design capabilities, and sustained volume sales. \u201cThe actual moat is in labour margins and volumes, not in price fluctuations,” says Soni.<\/p>\n\n\n\nI come from a gold jewellery business family. This is the WORST Diwali season we\u2019ve seen in 10 years karigars saying no work, no money.Yet on paper, listed jewellery companies show record growth.Here\u2019s the hidden truth \ud83d\udc47\ud83c\udffb<\/p>\n\u2014 Prem Soni (@ValueWithPrem) September 24, 2025<\/a><\/p>\n<\/blockquote>\n<\/div>\n<\/div>\nWhat Investors Should Watch<\/h3>\nDespite the record results being reported, Soni urges investors to dig deeper into earnings quality. Key metrics to track include:<\/p>\n\nVolume of jewellery sold<\/li>\nTrends in labour margins<\/li>\nSeparation of inventory gains from operational growth<\/li>\n<\/ul>\nWithout these, investors may mistake commodity-driven inflation in turnover for sustainable business expansion.<\/p>\nThe Bottom Line<\/h3>\nWhile gold may continue to shine, jewellery business margins are steadily shrinking. Only strong brands with operational efficiency and consumer trust are likely to endure. For investors, the lesson is clear: don\u2019t confuse commodity-led balance sheet growth with real, sustainable value creation, Soni added.<\/p>\n\n\n<\/p>\n<\/figure>\n<\/span><\/p>\nVarun Yadav<\/a><\/p>\nVarun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More<\/span><\/p>\n<\/div>\n<\/div>\nVarun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More<\/span><\/p>\n<\/div>\n<\/div>\n\n\n\nClick here<\/a> to add News18 as your preferred news source on Google, <\/span>Stay updated with all the latest business news, including\u00a0market trends<\/a>,\u00a0stock updates<\/a>,\u00a0tax<\/a>, IPO,\u00a0banking finance<\/a>, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates. Also Download the\u00a0News18 App<\/a>\u00a0to stay updated!<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\nFirst Published:<\/span><\/p>\n\nSeptember 25, 2025, 13:23 IST<\/p>\n<\/div>\n<\/div>\n\n\nDisclaimer: Comments reflect users\u2019 views, not News18\u2019s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use<\/a> and Privacy Policy<\/a>.<\/div>\n<\/div>\n<\/div>\nRead More<\/span><\/p>\n<\/div>\n
Jewellery Firms\u2019 Balance Sheets Shine with Gold, But Core Business Weakens<\/p>\n<\/figure>\n
The sharp surge in gold prices has lured investors to reconsider investment in listed jewellery companies that appear stronger on paper, with reported revenues swelling and inventories reflecting higher valuations, in the past two quarters.<\/p>\n
However, an industry insider cautions that much of this growth is illusory. \u201cInventory in stock is sitting on paper profits, while actual profitability from operations remains much thinner,” says business analyst and industry veteran Prem Soni.<\/p>\n
The mismatch is stark: while turnover has surged, volume growth has declined and core operating margins have thinned. Higher gold prices artificially inflate revenues, but the actual number of jewellery pieces sold is stagnating or shrinking.<\/p>\n
This trend creates a risk for investors who focus only on headline numbers. \u201cInvestors chasing only top-line growth might be overvaluing these companies,” Soni warns.<\/p>\n
Analysts note that jewellery firms are increasingly behaving like proxies for gold price movements rather than pure consumer businesses. When gold prices rise, turnover swells; when prices fall, balance sheets contract.<\/p>\n
The true strength of these companies lies not in commodity price swings but in labour charges, design capabilities, and sustained volume sales. \u201cThe actual moat is in labour margins and volumes, not in price fluctuations,” says Soni.<\/p>\n
\nI come from a gold jewellery business family. This is the WORST Diwali season we\u2019ve seen in 10 years karigars saying no work, no money.Yet on paper, listed jewellery companies show record growth.Here\u2019s the hidden truth \ud83d\udc47\ud83c\udffb<\/p>\n\u2014 Prem Soni (@ValueWithPrem) September 24, 2025<\/a><\/p>\n<\/blockquote>\n<\/div>\n<\/div>\nWhat Investors Should Watch<\/h3>\nDespite the record results being reported, Soni urges investors to dig deeper into earnings quality. Key metrics to track include:<\/p>\n\nVolume of jewellery sold<\/li>\nTrends in labour margins<\/li>\nSeparation of inventory gains from operational growth<\/li>\n<\/ul>\nWithout these, investors may mistake commodity-driven inflation in turnover for sustainable business expansion.<\/p>\nThe Bottom Line<\/h3>\nWhile gold may continue to shine, jewellery business margins are steadily shrinking. Only strong brands with operational efficiency and consumer trust are likely to endure. For investors, the lesson is clear: don\u2019t confuse commodity-led balance sheet growth with real, sustainable value creation, Soni added.<\/p>\n\n\n<\/p>\n<\/figure>\n<\/span><\/p>\nVarun Yadav<\/a><\/p>\nVarun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More<\/span><\/p>\n<\/div>\n<\/div>\nVarun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More<\/span><\/p>\n<\/div>\n<\/div>\n\n\n\nClick here<\/a> to add News18 as your preferred news source on Google, <\/span>Stay updated with all the latest business news, including\u00a0market trends<\/a>,\u00a0stock updates<\/a>,\u00a0tax<\/a>, IPO,\u00a0banking finance<\/a>, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates. Also Download the\u00a0News18 App<\/a>\u00a0to stay updated!<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\nFirst Published:<\/span><\/p>\n\nSeptember 25, 2025, 13:23 IST<\/p>\n<\/div>\n<\/div>\n\n\nDisclaimer: Comments reflect users\u2019 views, not News18\u2019s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use<\/a> and Privacy Policy<\/a>.<\/div>\n<\/div>\n<\/div>\nRead More<\/span><\/p>\n<\/div>\n
I come from a gold jewellery business family. This is the WORST Diwali season we\u2019ve seen in 10 years karigars saying no work, no money.Yet on paper, listed jewellery companies show record growth.Here\u2019s the hidden truth \ud83d\udc47\ud83c\udffb<\/p>\n
\u2014 Prem Soni (@ValueWithPrem) September 24, 2025<\/a><\/p>\n<\/blockquote>\n<\/div>\n<\/div>\nWhat Investors Should Watch<\/h3>\nDespite the record results being reported, Soni urges investors to dig deeper into earnings quality. Key metrics to track include:<\/p>\n\nVolume of jewellery sold<\/li>\nTrends in labour margins<\/li>\nSeparation of inventory gains from operational growth<\/li>\n<\/ul>\nWithout these, investors may mistake commodity-driven inflation in turnover for sustainable business expansion.<\/p>\nThe Bottom Line<\/h3>\nWhile gold may continue to shine, jewellery business margins are steadily shrinking. Only strong brands with operational efficiency and consumer trust are likely to endure. For investors, the lesson is clear: don\u2019t confuse commodity-led balance sheet growth with real, sustainable value creation, Soni added.<\/p>\n\n\n<\/p>\n<\/figure>\n<\/span><\/p>\nVarun Yadav<\/a><\/p>\nVarun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More<\/span><\/p>\n<\/div>\n<\/div>\nVarun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More<\/span><\/p>\n<\/div>\n<\/div>\n\n\n\nClick here<\/a> to add News18 as your preferred news source on Google, <\/span>Stay updated with all the latest business news, including\u00a0market trends<\/a>,\u00a0stock updates<\/a>,\u00a0tax<\/a>, IPO,\u00a0banking finance<\/a>, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates. Also Download the\u00a0News18 App<\/a>\u00a0to stay updated!<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\nFirst Published:<\/span><\/p>\n\nSeptember 25, 2025, 13:23 IST<\/p>\n<\/div>\n<\/div>\n\n\nDisclaimer: Comments reflect users\u2019 views, not News18\u2019s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use<\/a> and Privacy Policy<\/a>.<\/div>\n<\/div>\n<\/div>\nRead More<\/span><\/p>\n<\/div>\n
Despite the record results being reported, Soni urges investors to dig deeper into earnings quality. Key metrics to track include:<\/p>\n
Without these, investors may mistake commodity-driven inflation in turnover for sustainable business expansion.<\/p>\n
While gold may continue to shine, jewellery business margins are steadily shrinking. Only strong brands with operational efficiency and consumer trust are likely to endure. For investors, the lesson is clear: don\u2019t confuse commodity-led balance sheet growth with real, sustainable value creation, Soni added.<\/p>\n
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Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst…Read More<\/span><\/p>\n<\/div>\n<\/div>\nVarun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More<\/span><\/p>\n<\/div>\n<\/div>\n\n\n\nClick here<\/a> to add News18 as your preferred news source on Google, <\/span>Stay updated with all the latest business news, including\u00a0market trends<\/a>,\u00a0stock updates<\/a>,\u00a0tax<\/a>, IPO,\u00a0banking finance<\/a>, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates. Also Download the\u00a0News18 App<\/a>\u00a0to stay updated!<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\nFirst Published:<\/span><\/p>\n\nSeptember 25, 2025, 13:23 IST<\/p>\n<\/div>\n<\/div>\n\n\nDisclaimer: Comments reflect users\u2019 views, not News18\u2019s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use<\/a> and Privacy Policy<\/a>.<\/div>\n<\/div>\n<\/div>\nRead More<\/span><\/p>\n<\/div>\n
Varun Yadav is a Sub Editor at News18 Business Digital. He writes articles on markets, personal finance, technology, and more. He completed his post-graduation diploma in English Journalism from the Indian Inst… Read More<\/span><\/p>\n<\/div>\n<\/div>\n\n\n\nClick here<\/a> to add News18 as your preferred news source on Google, <\/span>Stay updated with all the latest business news, including\u00a0market trends<\/a>,\u00a0stock updates<\/a>,\u00a0tax<\/a>, IPO,\u00a0banking finance<\/a>, real estate, savings and investments. Get in-depth analysis, expert opinions, and real-time updates. Also Download the\u00a0News18 App<\/a>\u00a0to stay updated!<\/span><\/div>\n<\/div>\n<\/div>\n<\/div>\nFirst Published:<\/span><\/p>\n\nSeptember 25, 2025, 13:23 IST<\/p>\n<\/div>\n<\/div>\n\n\nDisclaimer: Comments reflect users\u2019 views, not News18\u2019s. Please keep discussions respectful and constructive. Abusive, defamatory, or illegal comments will be removed. News18 may disable any comment at its discretion. By posting, you agree to our Terms of Use<\/a> and Privacy Policy<\/a>.<\/div>\n<\/div>\n<\/div>\nRead More<\/span><\/p>\n<\/div>\n
September 25, 2025, 13:23 IST<\/p>\n<\/div>\n<\/div>\n
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