Thangamayil Jewellery Ltd said the Centre’s move to increase import duty on gold and silver from 6% to 15%, coupled with the Prime Minister’s recent appeal urging the public to defer gold jewellery purchases to reduce the current account deficit, could impact jewellery demand in the coming months.
The retail jeweller, however, noted that customers have increasingly shifted towards exchange-based purchases for new jewellery. From a historic average of around 25%, exchange gold sales currently account for nearly 50% to 60% of total sales.
Inventory gains expected
Thangamayil Jewellery said the steep increase in import duty on gold and silver could result in inventory gains of around ₹60 crore at prevailing market prices on existing inventory.
The company added that rising gold and silver prices during FY26 have led to a significant shift in consumer behaviour and business strategy. Demand for lightweight jewellery has increased substantially, while exchange offers for old gold have gained traction among customers.
Focus on affordable jewellery
The “Digi Gold” scheme helped improve customer acquisition in lower-value ticket segments, while competitive pricing enabled it to maintain volume offtake despite weak market conditions.
Thangamayil Jewellery added that its pricing strategy focused on absolute contribution rather than optimal unit realisation. The company also said successful penetration into Chennai metro markets supported growth during FY26.
Q4 profit rises sharply
Against this backdrop, the company reported a more than fourfold rise in standalone net profit for the March quarter at ₹143 crore compared with the year-ago period, aided by rising gold prices and strong retail sales growth.
Retail sales more than doubled to ₹2,730 crore, of which gold jewellery sales contributed ₹2,503 crore while non-gold items accounted for ₹227 crore.