Best Gold Stocks In India
Gold is an inert metal and does not earn interest. However, gold bugs have encouraged investors to invest in gold stocks. They can be a part of a diversified long-term investment portfolio. The metal is considered a hedge against inflation. It may also be a store of value through market volatility.
Instead of holding physical gold, investors can now store it in the form of mutual funds, derivatives, exchange-traded funds, or gold mining stocks. When it comes to buying gold stocks in India, an investor has an overwhelming range of choices. This post aims to help note the best gold stocks in India. Thus, it lists the five top alternatives.
Top Gold Stocks in India
We will discuss some of the top gold stocks in India. However, before making any investment decision, you should do your independent research.
| Name* | Share Price (in Rs.) | Market Cap (In Rs. Cr.) |
| Kalyan Jewellers | 116.40 | 12,247 |
| Muthoot Finance Ltd. | 933.70 | 3,78,483 |
| Titan Company | 2,356.10 | 2,09,000 |
| Manappuram Finance Ltd. | 113.35 | 9,590 |
| Vaibhav Global | 312 | 5,148 |
*Data as of 13/03/2023
Kalyan Jewellers
Kalyan Jewellers is trying to expand its structural ROE (Return on Equity) and achieve a more robust earning growth trajectory by building its jewellery stores in higher margin markets outside its base, which is in southern India. Until October 2022, their shares were lacklustre, but in the last quarter of 2022, it grew by 60%.
While the stock had a secular approach, many investors were bullish on the stock. Per experts, Kalyan Jewellers stocks may see another 35% rally laid by expansion and enhanced business momentum. It’s being said that the company’s financial ratios may potentially improve. Its consistent execution for driving further expansion may probably lead to compounding returns in the upcoming years.
However, Kalyan Jewellers gold stocks have a few risks, which include volatility in the bullion markets, execution risks, and heightened competitive intensity.
Muthoot Finance Ltd.
Muthoot Finance is a leading company for gold loans. They hold approximately 171 tonnes of gold as security. Muthoot Finance has different subsidiaries, including Muthoot Housing, Muthoot Insurance brokers, among others. Its range of services includes foreign and domestic money transfers, insurance, personal loans, microfinance, gold loans, non-convertible debentures, and more.
Per experts, Muthoot is among the best franchises among gold loan NBFCs (non-banking financial companies) in India. Their brand features various positive attributes, including a good distribution strength, memorable brand recall, and more. Considering the robust relationship between gold loan growth and gold prices, it is expected that Muthoot’s gold loan division will see considerable organic improvement.
Muthoot is expected to deliver a standalone Assets Under Management (AUM) growth of up to 10% by FY25 with an ROE of 17%. Given this potential, it seems rational to buy Muthoot’s gold stocks.
Titan Company
Founded as a partnership venture of Tamil Nadu Industrial Development Corporation (TIDCO) and the Tata Group, Titan Company Ltd. is the highest-selling jewellery brand in India. Its subsidiaries, Tanishq, Zoya, Caratlane, and Mia are also household names. Besides jewellery and watches, they sell eyewear under the brand name ‘Fasttrack’ and perfume branded ‘Skinn’.
Titan is proudly growing its growth trajectory. It reported an income of Rs. 811 crore in the last year’s quarter with an EBIT of 89 crores and an EBIT margin of 11%. The income is up by 15%. In February, the shares of Titan rallied over 5% in intraday trade. Last quarter, the brand added a total of 22 stores (excluding Caratlane) which brought its total store count to 510 stores, spread across 247 cities.
The stock is continuously upgraded, and is expected to increase the company’s FY23/24/25 EPS estimates by 1.5%/2.0%/2.0%. The company features a strong runway of growth despite the challenges it faces because of its organised and unorganised peers. Its long-term earning potential seems nonpareil. From the given data, it is seemingly profitable to invest in Titan’s gold stocks.
Manappuram Finance Ltd.
While Manappuram financials have been under the base building mode for the last six months, the Q3 results for the current fiscal changed the entire picture. It is expected that its price will rise and deliver excellent returns in the long run to its shareholders. When it comes to the company’s asset quality, its GMPA dropped to 1.6% for the gold business from 2.0 in Q2 FY20. Besides, the credit cost for housing declined by 34%.
However, the asset quality is also expected to improve further, and Manapurram’s management has begun taking measures to reduce credit costs in their microfinance business. This, in turn, strengthens its customer acquisition engine and borrower’s stickiness.
It is expected that the company will witness a recovery in terms of ROA (Return on Asset) as its growth is sustained at modest levels. In addition, the company has calibrated their advertising expenses and made positive adjustments for structuring rates and loan slabs. The board of directors of Manppuram have also declared an interim dividend of Rs. 0.75 per equity share, which produces a face value of Rs. 2 each. Investors who are looking to be long-term may consider Manappuram.
Vaibhav Global
Vaibhav Global Limited works with a unique business model. The brand has made a significant contribution to global retail with its active participation in jewellery, accessories, and lifestyle product domains. The company operates in the markets of the US and the UK. Vaibhav Global presents itself as an omnichannel retail network company which owns different live shopping channels like ShopLC (US) and ShopTJC (UK).
The company presently features a PE ratio of 38.80 with an ROE of 24.74%. The growth potential of Vaibhav Global Limited is fairly promising. Thus, investors may turn to this stock for a significant gain in the long run.
Conclusion
To summarise, gold stocks India may be a good investment option as they can help investors earn substantially, in the long run. What’s more is that these stocks are least affected by market volatility, making them the ideal choice for conservative investors.
However, to make the most out of your investment, you should always keep some factors under consideration. For example, invest strategically, know about the tax advantages, gain fundamental knowledge first, and start with spending only a little. With a sound strategy, you may enjoy good returns from the best gold stocks in India.
Disclaimer
The investment options and stocks mentioned here are not recommendations. Please go through your own due diligence and conduct thorough research before investing. Investment in the securities market is subject to market risks. Please read the Risk Disclosure documents carefully before investing. Past performance of instruments/securities does not indicate their future performance. Due to the price fluctuation risk and the market risk, there is no guarantee that your personal investment objectives will be achieved.