Bengal Jewellers Expect Dhanteras 2022, To Bring Cheer

Jewellers across West Bengal are hoping for bumper sales on the occasion of Dhanteras despite a weak rupee preventing a substantial fall in gold prices. Compared to 2021, sales are expected to be 15-20 per cent higher on Dhanteras as the Diwali celebration this year will be without COVID curbs, an industry association official said. Dhanteras, which marks the first day of Diwali in India, is considered auspicious to buy gold and silver as part of Hindu festivities.

"Early signs are healthy. The number of people visiting stores has increased since Lakhsmi puja. Dhanteras bookings have increased significantly. The feedback from both districts and the metropolis remains positive," Swarna Shilpa Bachao Committee working president Bablu De told PTI.

Around 10,000 standalone and small jewellery shop owners from West Bengal, a state known for its handcrafted gold ornaments, are expecting a surge in demand during the upcoming Diwali festival even though rupee depreciation has "dampened the mood" among traders, he said. "This Dhanteras, sales growth is expected to be 15-20 per cent over 2021. There is a moderation in the gold price, which encourages consumers. However, the gold price could have been lesser but rupee depreciation stood in the way," De said.

Dhanteras sales contribute between 5 and 15 per cent of a jewellery store's annual turnover, the industry association official said. Ashok Bengani, the mentor for the Bengal chapter of India Bullion and Jewellers Association, stated that this Diwali is anticipated to be "better than the previous year". "The contributory factors are people's ability to freely come to stores and buy their piece of ornaments and benign price trend amid volatility.

Consumers also realise the significance of gold as a hedge against inflation in the event of unforeseen geopolitical uncertainties, which will also play a role in this festival," he said. Discounts on making charges by jewellers are "not on the higher side this year" and remain within the range of 20-30 per cent as compared to 20-50 per cent in the previous year. This signifies that expectation on business flow remains firm, a jeweller said.

Sanjay Karmakar, an owner of a south Kolkata jewellery store, however, is not happy with the current trend of sales. "Stores that rely on customers from the unorganised sector are suffering greatly. There is also a trend of purchasing branded ornaments, which has adversely impacted sales at small standalone shops," the jeweller said.

A study report stated that due to hallmarking, the share of organised retail chains has grown in the industry, and this segment now accounts for 35 per cent of the market. "This being the first post-pandemic 'normal' Diwali, people are expecting to celebrate a 'no holds barred' festival this year. The sentiment is up, the mood is infectious not just for jewellery but all categories. As expected the predominant sentiment is for gold during the festive period...

Tanishq is anticipating and targeting strong growth, despite the high base of a record-breaking festive season last year," Titan Company CEO (Jewellery Division) Ajoy Chawla said. Senco Gold and Diamonds Managing Director Suvankar Sen expected that the growth in sales will be "either in the high single digits or the low double digits as compared to last year". "However, the ticket size will be low, which will be compensated by higher footfalls," he said.

Another organised retailer Anjali Jewellers Director A U Chowdhury said the excitement among customers and the general public has increased as a result of declining gold prices. "No doubt, the jewellery industry is witnessing a tremendous demand," De Beers Forevermark VP Amit Pratihari said, adding that there is "still a pent-up demand for jewellery and hence we foresee that this festive season will be extremely strong".

StockEdge and Elearnmarkets co-founder Vivek Bajaj, however, said gold, from an investment perspective, is not "shining in the minds of investors". "Since the beginning of the rise in US interest rates, Gold ETF has performed poorly in dollar terms. This was mostly because of the ongoing war between Russia and Ukraine and the high inflation caused by COVID. "In the past year, it has brought in a return of 4 per cent and in five years it is 10 per cent," the analyst stated.

(PTI)