New Delhi: An analysis of 92 gold jewellery retailers, accounting for 40 per cent of the sector’s revenue, showed that the number of new store additions is expected to reduce to almost by a third of the average between fiscals 2017 and 2020, it said.
“Consequently, capital investments will be 70 per cent lower at Rs 650-700 crore this fiscal compared with the average of the past four fiscals,” the Crisil analysis said.
“Cash accrual is expected to decline 40 per cent on-year, given an expected 35-40 per cent fall in sales volume for the industry – the steepest on-year drop in more than a decade – despite higher gold prices.”
As per the analysis, sales volume would plunge because of curtailed discretionary spending following the Covid-19 pandemic, stores remaining shut for most of the first quarter, and intermittent lockdowns in some states in the second quarter.
