Gold, most people would agree, is a store of value. But can we say the same about gold stocks? Let’s find out. Shares of businesses engaged in producing, selling, and mining gold are called gold stocks. Without possessing the metal physically, investors can get exposure to gold prices by purchasing gold stocks. Prominent Indian gold stocks are those of jewelry producers and mining firms. Gold stocks are often seen as a hedge against inflation and exchange rate swings since they typically move in lockstep with the global price of gold. Top gold stocks in India are a good investment option for investors. Let’s learn more about this industry.
Understanding gold stocks in India
For perspective, India is the world’s second-largest market for gold behind China, though the country produces hardly any gold. For many Indian families, gold has traditionally constituted a big portion of their financial savings and is an important element of the Indian economic system. The World Gold Council (WGC) notes that investor demand for gold shares has been growing. Although purchasing actual gold has always been the conventional method of investing in gold, gold mining stocks in India have recently become a well-liked substitute.
The price of gold shares on Indian stock exchanges is closely related to the price of gold, which can vary according to supply and demand, mining expenses, and the state of the global economy.
Consequently, gold stock investments in India can provide you with diversity and the possibility of long-term development while allowing you to participate in the gold stock market without actually holding gold.
Gold industry in India: A brief overview
India’s gold mines have a rich cultural and historical background. India has an extended and illustrious record of manufacturing gold. The Kolar Gold Fields in Karnataka and the Hutti Gold Mines in the Raichur area were the earliest gold mines in India.
Global central banks hold gold as a reserve due to its features such as safety, liquidity, and returns. India’s central bank, the Reserve Bank of India, buys gold as a hedge against inflation and currency volatility. The RBI stores its physical gold in foreign vaults. India bolstered its gold holdings in fiscal year 2023 by adding 34.22 tonnes of gold to its declared reserves. India’s gold reserves made for 8.06% of all reserves as of March 2023, the highest percentage since 1994.
The key aspect that drives the gold market in India is the use of gold for diverse purposes. From an investor perspective, gold-related stocks are an attractive option for those who would like to expand their investment portfolios and potentially turn a profit. They offer growth opportunities and inflation insurance, especially in countries like India.
Top gold stocks in India in 2024 by market capitalization
Besides owning physical gold as ornaments and gold bars, investors are showing interest in stock investments in gold-related businesses. Due to India’s major role in the global gold market as a major consumer of the yellow metal, traders and investors closely monitor the prices of India’s gold stocks.
| No | Name | Market cap (in Rs. Cr) | P/E |
| 1 | Titan Company Ltd | 3,35,095 | 97 |
| 2 | Kalyan Jewellers India Ltd | 72,661 | 115 |
| 3 | Senco Gold Ltd | 10,016 | 46.9 |
| 4 | Rajesh Exports Ltd | 8,722 | 229 |
| 5 | PC Jeweller Ltd | 6,755 | – |
| 6 | Thangamayil Jewellery Ltd | 6,141 | 50.7 |
| 7 | Vaibhav Global Ltd | 5,246 | 40.3 |
| 8 | Goldiam International Ltd | 4,076 | 42.6 |
| 9 | Sky Gold Ltd | 3,687 | 72.2 |
| 10 | Motisons Jewellers Ltd | 2,593 | 79.9 |
All data from Screener.in as on 16th September, 2024.
Overview of the best gold stocks in India by market capitalization
Purchasing gold mining stocks can be a profitable enterprise. Let’s look at some of the best gold stocks in India based on market capitalization.
1. Titan Company Ltd
Titan is involved in the business of selling accessories, jewelry, wristwatches, and eyewear. It was established on the 26th of July 1984 and has a market capitalization of ₹3,35,095 crore. Titan is considered one of the best gold stocks in India.
2. Kalyan Jewellers
Kalyan Jewellers produces and markets a variety of jewelry items. With 6% of the Indian jewelry market as of FY24, it is among the biggest merchants in the country. In addition, the firm has 36 showrooms in the Middle East and over 217 outlets throughout India. The firm has a market cap of ₹72,661 crores.
3. Senco Gold Ltd
Senco Gold Limited, a pan-India jewelry retailer, is the largest organized jewelry retailer in the eastern part of the country based on the number of stores. It offers a wide variety of jewelry options, including necklaces, bangles, rings, earrings, pendants, bracelets, mangtika, mangalsutra and chains. The firm’s products are sold under the ‘Senco Gold & Diamonds’ brand through multiple channels, including 75 company-operated showrooms and 61 franchisee showrooms (including 4 franchisee owned and company-operated showrooms). The firm has a market cap of ₹10,016 crore.
4. Rajesh Exports Ltd
Rajesh Exports Limited is focused on producing and refining gold for export. The company distributes gold products, both in bulk and at retail. Having a ₹8,722 crore market cap, Rajesh Exports Limited has a strong market presence.
5. PC Jeweller Ltd
A network of retail jewellers which was established in 2005, PC Jeweller Ltd. sells gold, diamond, and silver jewelry. Currently, it has a strong market representation with over 80 showrooms across the country. The company has a market capitalization of ₹6,755 crore.
6. Thangamayil Jewellery Ltd
Thangamayil Jewellery Ltd, incorporated in 2000, is one of the leading jewelry shops in the south Indian states, particularly in Tamil Nadu, parts of Kerala, and Karnataka with over forty stores. The firm has a market capitalization of ₹6,141 crores.
7. Vaibhav Global Ltd
Vaibhav Global Ltd. is a vertically integrated fashion retailer with nearly four decades of industry experience. The company is a global digital retailer of fashion jewellery, gemstones, lifestyle products, home décor, beauty care, hair care, apparels and accessories on TV and digital platforms. The firm has a market cap of ₹5,246 crores.
8. Goldiam International Ltd
Goldiam, the exporter based in India, deals mainly in platinum and gold jewelry embellished with diamonds. The firm was established in 1986. Over the years, the company has continued to occupy the premier position in the diamond jewelry segment by focusing on new ideas and classy designs. The firm has a market cap of ₹4,076 crores.
9. Sky Gold Ltd
Sky Gold is engaged in the business of designing, manufacturing and marketing of gold jewelry. The company mainly deals in 22 carat gold jewellery, offering a wide variety of designs to suit preferences of the end customer. The firm makes localized product design mixes to suit varying regional tastes. It has a market cap of ₹3,687 crores.
10. Motisons Jewellers Ltd
Motisons Jewellers Ltd’s business includes the sale of jewelry made of gold, diamond, kundan and sale of jewelry products that include pearl, silver, platinum, precious, semi-precious stones and other metals. The firm’s other offerings include gold and silver coins, utensils and other artifacts. The company has a market cap of ₹2,593 crores.
Factors to consider before investing in gold stocks in India
There are several factors to consider if you wish to invest in gold-related stocks in India. An assessment of organizational performance and financial stability is essential.
Company performance
When investing in gold stocks in India, it is useful to look at the performance of different firms. Do a credit analysis of the company by looking at the firm’s debt, income, and profit margin statements. In short, a long-term investment in a firm that shows a constant and rising profit and a strong balance sheet poses fewer risks.
Regulatory environment
Regulatory curbs could pose a threat to gold mining stocks. Any changes in export-import regulations, curbs on mining activities, and environmental issues could impact the functioning of the gold firms. One needs to be updated about changing regulations.
Gold prices
The profit of gold companies has a direct relation with gold price. The prices and turnover of companies involved in producing gold are likely to increase with the rise in gold prices which automatically boosts the stock prices. Hence, investors should monitor the changes in the international gold market. Several factors such as demand/supply, and changes in currency value impact gold prices.
Macroeconomic factors
Gold stocks might experience significant changes depending on macroeconomic factors such as interest rates, inflation, and currency fluctuations. Typically, gold-related stocks perform well during phases of high inflation as gold is often considered a hedge against inflation. Conversely, rising interest rates may impact the price of gold and gold stocks. This is because other financial investments might look more profitable in a rising rate environment.
Should you invest in gold stocks?
Buying gold stocks may be the right move if one aims for more strategic positioning of one’s portfolio. You need not necessarily own physical gold to benefit from rising gold prices. Investing in the best gold stocks in India allows investors to benefit from increase in gold prices. Gold-related stocks tend to perform well during phases of high inflation or economic downturns since gold is considered a safe-haven commodity.
However, the supply of gold, demand, market conditions, corporate management, and mining production are among the factors that bring volatility. Dividends from gold stocks will be relatively small compared to returns of other industries, and they may not exactly correspond to the prices of gold. Nonetheless, like any investment, gold stocks should be assessed according to one’s level of risk tolerance and financial goals since gold stocks can be a good addition to a diversified investment portfolio.
Conclusion
Investors need to understand that they can invest in gold through gold-related stocks trading in the Indian stock market without actually owning physical gold. Gold stocks, mainly issued by mining companies engaged in gold mining and leading gold jewelers, are sensitive to global gold prices, economic factors, and changes in currency values. While gold is widely regarded as a safe asset, investing in gold-related stocks comes with risks related to the individual performance of gold companies and inherent market fluctuations.
