Markets Today: Will jewellery stocks double by next Dhanteras?

As the auspicious occasion of Dhanteras marks the beginning of pre-Diwali festivities today, jewellers are expecting stronger sales. Industry players are expecting customers to spend and invest in jewellery for asset building after two years of uncertainty. People too are thronging the jewellery shops as the Covid-19 pandemic is almost in check and so are the gold prices.
 
The data backs the hopes. According to a recent report by World Gold Council, the demand for gold jewellery in India surged 58 per cent year-on-year to 96.2 tonnes during the July-September quarter due to a strong pent-up demand, bouncing back sharply from the lows seen during the pandemic in 2020.
 
In a recent interview with Business Standard, Somasundaram PR, India managing director of WGC, said: “We expect this quarter to be one of the best in recent years, benchmarked to pre-Covid-19 seasons. Pent-up demand, soft prices and good monsoon, combined with easing of lockdown across regions, bode well for a strong surge in demand.”
 
So, is the jewellery demand set to skyrocket during the current festive season? Should you invest in the related stocks to add sparkle to your portfolio?
 
Well, if tech charts are anything to go buy, the bullish momentum in related stocks is intact despite over 100 per cent returns since last Dhanteras.
 
Titan Company
Likely target: Rs 3,000
Upside potential: 25%
Support: Rs 2,300
 
Goldiam International
Likely target: Rs 1,150 to 1,220
Upside potential: 22% to 24%
Support: Rs 900
 
Thangamayil Jewellery
Likely target: Rs 1,650
Upside potential: 11%
Support: Rs 1,080 and Rs 1,200
 
Kalyan Jewellers India
Likely target: Rs 82 and Rs 90
Upside potential: 5.50% to 16%
Support: Rs 73
 
While shares of Titan Company, Thangamayil Jewellery and Goldiam International have more than doubled during the period, they are expected to rally up to 25 per cent from here on. Sector giant Titan, for instance, is on course to hit the Rs 3,000 mark, which is a 25 per cent upside from current levels. Those of Goldiam International, meanwhile, can rally 24 per cent to Rs 1,220 levels. Thangamayil and Kalyan Jewellers are also eyeing up to 16 per cent return over the medium term.
 
Clearly, cooled off prices and sticky inflation have put the spotlight on gold investment as a hedging strategy. And if the demand outlook for the yellow metal is strong, related stocks in the equity segment should remain on investor radar.  
 
Now, apart from jewellery stocks, investors may also keep a tab on shares of Bharti Airtel, Bank of India, Dabur, Godrej Properties, and HPCL as these companies are some of the prominent firms slated to report their September quarter earnings later today.
 
Within the lot, Sunil Mittal-led Bharti Airtel is expected to post an impressive sequential growth in net profit for the July-September quarter on the back of a steady subscriber base and tariff hike in select pre- and post-paid plans. While ARPU, or average revenue per user, is expected to rise 5-7 per cent sequentially, the Street anticipates the revenue to rise around 9 per cent year-on-year. Net profit, meanwhile, is projected to come anywhere between Rs 675 crore and Rs 774 crore.
 
That apart, primary market action will also keep investors on their toes today. Initial public offering of Policybazaar, Sigachi Industries, and SJS Enterprises will enter second day today while that of Fino Payments Bank will close later in the day.
 
Globally, the US Federal Reserve will begin its two-day monetary policy meeting late evening today with an outcome due tomorrow.
 
Yesterday, markets reversed their 3-day losing streak led by renewed buying interest in IT and select financial shares. The BSE Sensex reclaimed the 60,000 mark, and settled with a gain of 831 points at 60,138.
 
The NSE Nifty, on the other hand, ended 258 points higher at 17,930. In the broader markets, the BSE MidCap index surged 1.8 per cent, while the SmallCap index moved up 1.1 per cent.

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