Asian growth story – the X-Factor
With 95% of the world’s diamond cutting and polishing concentrated in India, the country has naturally evolved into a global hub for diamond certification. Mumbai, home to the Bharat Diamond Bourse, the world’s largest by area as of CY2022, hosts laboratories of all major global players. Within this ecosystem, IGIL has cemented its leadership through IGIL India, which pioneered international-standard certification services in the country as early as 1999. Today, IGIL India holds the distinction of being the largest independent certification body for diamonds, studded jewelry, and colored stones, commanding ~50% market share in CY2023. Its credibility is underscored by its association with 9 of the top 10jewelry chains in the country. Notably, IGIL India is also the foremost certification provider for lab-grown diamonds, catering to over five Indian growers. With the most extensive laboratory network in India among global peers, combined with a well-established international presence, IGIL’s expansive footprint, deep-rooted industry trust, and alignment with emerging trends in lab-grown and natural diamond certification place it at the forefront of a high-growth, credibility-driven sector.
We initiate Buy with price target at INR 563
As the jewelry industry pivots toward new value propositions such as affordability, sustainability, and design – verification and certification will continue to be mission-critical. IGIL’s deep integration across geographies, gem categories, and retail formats positions it as a key enabler in this evolving landscape. Its ability to scale operations, stay agile in the face of regulatory flux, and uphold trust in an increasingly complex supply chain suggests not just resilience, but relevance. In a world where perception defines value, IGIL stands to gain from the high barriers to entry in this certifications business due to acceptance by clients from any new entrants could take couple of decades to cut through oligopolistic nature of this business. We assign a valuation multiple of a 40x of its CY27F EPS, based on superior margin profile, to arrive at our target price for INR 590.
Research attached below: