PC Jewellers, Gitanjali Gems, Tata Jewels hit 52-week high

NEW DELHI: Jewellery stocks such as PC Jewellers, Gitanjali Gems and Tata Jewels hit their 52-week high on the bourses on Wednesday, backed by strong buying.

PC Jewellers and Gitanjali Gems rose over 8 per cent to hit their 52-week high of Rs 179.40 and Rs 607.95, respectively. Tara Jewels rose over 3 per cent to hit its 52-week high of Rs 245.45.

At 02:50 pm, PC Jewellers was trading 7.3 per cent higher at Rs 177.40, Gitanjali Gems advanced 8 per cent to Rs 585.05 and Tara Jewels was trading 0.7 per cent higher at Rs 239.

Shares of jewellery-based stocks are moving higher even though the government is planning to increase the cost of gold imports.

Finance Minister Chidambaram says the government is considering raising the cost of gold imports, a key contributor to India’s record current account deficit.

Gold imports may have risen in the October-December quarter, which included the Diwali and the marriage season, and imports may remain high as real returns from domestic deposits remain low, said Kotak Mahindra Bank.

Recently, investors have taken a liking to jewellery houses, which are expanding their retail presence across the country to cash in on a rise in consumption across cities, especially by young brand-conscious consumers.

PC Jeweller and Tara Jewels got listed in December with successful initial public offerings while Tribhovandas Bhimji Zaveri entered the stock market in May.

While the company’s stock price has doubled since its listing, the Sensex has grown nearly 2 per cent since December. Gold prices rose 9.5% in 2012, while the BSE sensitive index of top 30 shares gained 26% in the year.

Jewellery retail in the country has largely been an unorganised affair with 85% of the market still controlled by local and regional players. While the market might be growing at 15% a year, the organised part is speeding ahead clocking a growth of 40-50% a year.