SEATTLE (Scrap Monster): Leading ratings agency CRISIL Ratings predicts significant revenue growth to gold jewellery retailers this fiscal.
This follows two consecutive years of revenue decline. It must be noted that the revenue had contracted by 3% and 8% in FY20 and FY21 respectively. The sector was badly impacted by huge drop in demand during FY20 on account of hike in import duty on gold to 12.5%. The revenues in FY21 were affected by dip in demand on account of pandemic-induced lockdowns and subsequent store closures.
The revenue growth for the current fiscal is projected at around 12-14% over the previous fiscal. The boosted revenues are mainly on account of relatively stable gold prices and increased demand during festive and wedding seasons. According to CRISIL, the operating margin for retailers is likely to retrace the pre-pandemic level of 6.5-7.0%, with a moderation of around 100-200 basis points.
Anuj Sethi, Senior Director, CRISIL Ratings noted that the organized jewellers will see rise in revenue, primarily on account of mandatory hallmarking requirement as well as lower import duty on gold. The projected demand boost from weddings and festivals in the later quarters of the year will contribute significantly to the revenue growth, he added.
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