Whalesbook
Jewellery Brands Become Key Mall Anchors
Jewellery brands have significantly reshaped India's retail real estate landscape, now occupying close to 10% of total mall space – a tenfold increase in just four years. This strategic move makes them vital traffic drivers and major revenue sources for mall owners. Consultancy CBRE reports that jewellery's share of organized retail leasing grew from 2% in 2019 to an estimated 8% by 2025, making it a top demand driver after fashion and food and beverage. Leasing by these brands doubled between 2024 and 2025, with major cities leading the growth. Mall operators such as Nexus Select Trust are seeing significant financial gains. The company reported a robust 57% year-on-year growth in jewellery sales, which contributed about 7% to its total sales volume, even though these retailers take up less physical space. The organized jewellery segment now accounts for 20-25% of mall revenues, highlighting its outsized impact.
Concerns Over Valuation Gaps and Market Split
Although jewellery retail is strong as a mall anchor, significant valuation differences and a potentially split retail market are emerging. Mall operators like Nexus Select Trust show financial figures that raise concerns. The company has a market capitalization near ₹24,213 crore, but its Return on Equity (ROE) is a low 7.05%. Reports show a sharp profit drop in Q4 FY26 due to tax issues, and foreign institutional investor holdings have decreased since late 2025, suggesting investors are rethinking their positions. As a result, MarketsMojo gave Nexus Select Trust a 'Sell' rating in early May 2026, calling its valuation 'very expensive' for its financial results. In contrast, top jewellery brands show higher valuations and stronger operations, despite recent market ups and downs. Titan Company, a key player, trades at a high price-to-earnings (P/E) ratio of about 81.3, indicating investor confidence in its growth. Kalyan Jewellers has reported significant revenue and profit increases in FY26, even after recent price drops. This difference suggests the market values established, high-margin brands more than the real estate supporting them. This could concentrate power in malls, favouring a few main tenants over a varied mix of businesses.
Risks of Over-Reliance on Jewellery
Relying heavily on jewellery as a mall anchor creates specific weaknesses. The sector has recently faced major challenges from government policies and public sentiment. Prime Minister Narendra Modi's call to reduce gold purchases, followed by an increase in import duties from 6% to 15%, led to sharp stock drops. Kalyan Jewellers saw its stock fall over 40% from its peak, hitting new 52-week lows. These regulatory pressures, combined with unpredictable gold prices, directly threaten jewellery retailers' profits and sales. This, in turn, affects the rental income for mall owners who depend on these anchor tenants. Many mall developers also face financial difficulties. For example, Omaxe Group has a negative P/E ratio of -2.28, has reported losses for four straight quarters, and has negative book value per share, indicating serious financial trouble. This situation points to a divided retail market where large anchor tenants do well, but smaller retailers struggle, and developers operate with very small profits or financial stress. The trend towards large stores, which made up 50% of jewellery leasing in 2025 (up from 14% in 2019), also gives these main tenants more bargaining power.
Market Outlook for Jewellery Retail
Despite recent market instability, the Indian jewellery market's long-term forecast is cautiously positive. It's expected to grow at a compound annual growth rate (CAGR) of 12%-14% from 2024 to 2029, reaching $130-$140 billion by 2029. The organized jewellery sector is predicted to increase its market share to 43-47% by 2029. For mall owners, demand for shopping experiences continues to fuel leasing. Analysts generally remain positive on Kalyan Jewellers, with a consensus 'Strong Buy' rating and price targets suggesting potential gains, despite current challenges. Nexus Select Trust, however, faces a tougher outlook, holding a 'Sell' rating due to concerns about its valuation and profits, even with high occupancy rates. Mall operators' success will depend on their ability to diversify their tenants, manage costs efficiently, and adapt to regulatory changes affecting their main anchor tenants.