Precious Metals Industry Playbook
Part of the Metals & Mining sector This playbook covers the Precious Metals subindustry within the Metals & Mining sector. It provides a focused framework fo...
Part of the Metals & Mining sector
Industry Overview
This playbook covers the Precious Metals sub-industry within the Metals & Mining sector. It provides a focused framework for analysing and valuing companies in this specific segment of the Indian market.
What you will learn
- Industry Overview: How Precious Metals companies operate — business models, revenue drivers, and key players in India
- Key Metrics: The 4-5 financial metrics that matter most for evaluating Precious Metals companies
- Competitive Landscape: Market structure, entry barriers, pricing power, and moat analysis for Precious Metals
- Risks & Red Flags: What can go wrong — regulatory, cyclical, and company-specific risks in Precious Metals
- Valuation Framework: How to value Precious Metals companies — appropriate multiples, benchmarks, and peer comparison
Quick navigation
| Lesson | Focus |
|---|---|
| Industry Overview | How Precious Metals companies operate — business models, rev... |
| Key Metrics | The 4-5 financial metrics that matter most for evaluating Pr... |
| Competitive Landscape | Market structure, entry barriers, pricing power, and moat an... |
| Risks & Red Flags | What can go wrong — regulatory, cyclical, and company-specif... |
| Valuation Framework | How to value Precious Metals companies — appropriate multipl... |
Start here
Begin with the Industry Overview to understand the basic business model, then use Key Metrics to build your screening criteria.
1. Precious Metals — Industry Overview
Precious Metals — gold, silver, and platinum group metals where India is the world's largest consumer but barely mines its own.
What you will learn
How precious metals companies operate in India — from mining and refining to jewellery manufacturing, why India imports 95%+ of its gold, and which listed players capture value in this chain.
Core framework
India's precious metals paradox
India consumes ~800–900 tonnes of gold annually (25% of global demand) but produces only ~1.5 tonnes domestically. The listed opportunity is mostly in refining, jewellery retail, and silver by-product from base metal miners.
Revenue models in India
| Business type | Revenue model | Key players | Margin profile |
|---|---|---|---|
| Gold mining | Ore extraction → refining → bullion sale | HGML (unlisted), Deccan Gold | High margin but tiny scale |
| Silver (by-product) | Zinc mining → silver recovery | Hindustan Zinc | Silver is 15–20% of EBITDA |
| Gold refining | Import doré → refine → sell 999 bars | MMTC-PAMP (JV) | Thin refining margin (0.2–0.5%) |
| Jewellery retail | Gold purchase → making → retail sale | Titan, Kalyan, Malabar | 8–12% EBITDA margin |
| Gold recycling | Old jewellery → melt → resell | Unorganised (85%) | Growing organised opportunity |
Cost & pricing dynamics
Gold price = exogenous
No Indian company can influence gold/silver prices — they are set globally (LBMA/COMEX). Indian landed cost = international price + 15% import duty + 3% GST. Companies make money on making charges, volume throughput, or mining cost advantage.
| Cost factor | Impact | Who bears it |
|---|---|---|
| Import duty (15%) | Raises consumer cost; creates smuggling arbitrage | End consumer |
| Making charges (8–25%) | Jeweller's actual margin | Jewellery retailers |
| Mining cost (for producers) | $800–1,200/oz for global miners | Mining companies |
| Hedging cost | Protects margin but caps upside | Refiners, large jewellers |
Key players
| Company | Business | Revenue (FY24) | Precious metal exposure |
|---|---|---|---|
| Titan Company | Jewellery (Tanishq) | ~₹51,000 Cr | Gold/diamond as raw material |
| Hindustan Zinc | Zinc + Silver | ~₹30,000 Cr | India's #1 silver producer |
| Kalyan Jewellers | Jewellery retail | ~₹18,000 Cr | Pure gold/diamond play |
| Senco Gold | Regional jewellery | ~₹5,500 Cr | Eastern India focus |
| Deccan Gold Mines | Gold exploration | Pre-revenue | Only listed gold explorer |
Indian context
🗣️
"Gold India mein investment bhi hai, emotion bhi hai — Diwali-shaadi mein demand guaranteed hai. Company dhundho jo is demand pe margin kamaye."
- India imports 700–800 tonnes of gold annually; 2nd largest importer after China
- Hallmarking (BIS) made mandatory in 2022 — benefits organised players
- Silver demand surging due to solar panel manufacturing (India's PLI scheme)
- Gold recycling is ~30% of supply but 85% unorganised — formalisation opportunity
What to check next
- Explore company-level data on the Screener
- Read the parent sector playbook
- View AI research insights for live analysis
2. Precious Metals — Key Metrics
The numbers that matter — from AllIn Sustaining Cost (AISC) for miners to samestore growth for jewellers. 5–6 metrics across mining, refining, and jewellery...
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3. Precious Metals — Competitive Landscape
India's precious metals market — where jewellery retail is the real listed opportunity. Market structure across mining, refining, and jewellery retail. Who h...
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4. Precious Metals — Risks & Red Flags
What threatens precious metals investments — from import duty shocks to gold price corrections. Price, regulatory, operational, and governance risks specific...
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5. Precious Metals — Valuation Framework
How to value goldlinked businesses — jewellery retailers on P/E, miners on NAV, and the gold price overlay. Appropriate valuation approaches for different ty...
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