Indian cut and polished diamond shipments may dip up to 10-15% to $19-20 billion in FY24, after an 8-10% contraction in the previous year, due to a worldwide recession, according to rating agency ICRA.
While tighter liquidity and macroeconomic challenges are lowering total sales, a pricing gap between raw and polished diamonds is harming operational profit margins.
Demand is therefore in large-sized diamonds as customers downgrade to smaller-sized diamonds, while some migrate to lab-grown diamonds owing to general inflationary pressures.
ICRA anticipates rough pricing to stay stable in FY2024 as well since no big ramp-up in mining production of raw diamonds is predicted over the following two years.
“While CPD companies kept a rigorous control over the working capital cycle thus far, which minimized their dependency on working capital debt, their capacity to do so moving ahead would remain essential from a credit perspective,” ICRA stated.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
While tighter liquidity and macroeconomic challenges are lowering total sales, a pricing gap between raw and polished diamonds is harming operational profit margins.
Demand is therefore in large-sized diamonds as customers downgrade to smaller-sized diamonds, while some migrate to lab-grown diamonds owing to general inflationary pressures.
ICRA anticipates rough pricing to stay stable in FY2024 as well since no big ramp-up in mining production of raw diamonds is predicted over the following two years.
“While CPD companies kept a rigorous control over the working capital cycle thus far, which minimized their dependency on working capital debt, their capacity to do so moving ahead would remain essential from a credit perspective,” ICRA stated.
Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished
