Indians have lusted over gold for more than 2000 years and this lust may not die down soon according to Kalyan Jewellers. In an interview with ET Now, T.S. Kalyanaraman, Chairman and Managing Director (CMD), Kalyan Jewellers said physical gold has held a sentimental value for Indians since the past 2000 years and will continue to do so as people want to buy gold ornaments for the joy of wearing them. This trend will not go and the fact that the gold ornament business is increasing in size every year is a clear indication that people do want to buy physical gold rather than Gold bonds.
Along with Kalyanaraman, his sons Rajesh and Ramesh were a part of the interview as well. The top management of the company said that there has been no change in the buying pattern after demonetization but the payment pattern has definitely changed as post demonetization customers prefer to pay by digital means.
On comparison of gold bonds with gold ornaments, they said that people buy ornaments on events such as marriages, birthdays etc for wearing pleasure and it can be an investment too as the ornaments can be liquidated if needed.
The top executives of the company said that they spend only 1-2% of their revenue on advertisement and marketing, but since their revenue is high compared to other companies therefore their spending on advertisement and marketing may seem huge.
They said the company doesn’t have much competition in the organized sector but the organized sector is a big competitor. On GST they said that the tax reform, India’s most comprehensive till date, will help unorganized sector move to the organized sector only if the tax rates for jewellery are kept low, as higher rates will prove detrimental. The management also said that the government should consider lowering import duty on gold and continue to monitor the gold jewellery industry closely.