Shares of Jewellery companies like Kalyan Jewellers, Senco Gold, TBZ and Motisons Jewellers are shining bright in Friday’s trading session.

While shares of Kalyan Jewellers have surged over 8% in today’s session, those of TBZ, Motisons and Senco gained as much as 17%, 6.5% and 4.5% respectively.

Shares of Kalyan Jewellers are up 13% so far this week and have now gained for five weeks in a row. Senco too has risen 8% so far this week after a 9% jump last week. Shares of TBZ have more than doubled in the last five weeks, rising from levels of ₹144 to well over ₹318, while Motisons Jewellers has seen its stock surge 35% so far this week, after a 12% advance in the week gone by.

What Are The Factors Behind this Move?

HSBC recently came out with a positive note on Kalyan Jewellers, where it projected that the stock can rise up to levels past ₹800, and that it has only reached the halfway mark in its value creation journey.

The country is also gearing up for the wedding and festive season, which will result in a better second half for these companies.

Additionally, the reduction of customs duty on gold from 15% to 6% in the Union budget of 2024 also added to the positive sentiment among these companies and led to an accelerated formalisation process.

In an interaction with CNBC-TV18 on September 9, the management of Senco Gold said that the jewellery industry has seen big traction post the cut in customs duty.

Another jewellery company is set to make its debut on Dalal Street with PN Gadgil Jewellers, the IPO of which closed for subscription on Thursday. You can read more on how to check its allotment status here. The IPO saw an overall subscription of nearly 60 times the shares on offer.

Lastly, with Gold prices hitting record high levels is also a potential trigger for these companies. While Titan has all of its gold hedged, Senco has over 90% of its gold hedged. Thangamayil Jewellers too has 89% of its gold hedged.

Jonathan Barratt of Probis Securities said that he expects the momentum in gold prices to continue. He made these remarks in an interaction with CNBC-TV18 last month.

On September 11, Gautam Shah of Goldilocks Premium Research said that he expects a big move in gold prices over the next 12 months and he expects the yellow metal to trade at $3,350 / Oz levels within the next 18 months.