Top Gold Mining Companies In India: Before we viewed the current paper currency as money, there was mainly a single form of payment that was accepted worldwide – Not cash, not crypto, and definitely not debit or credit cards. We’re talking about the most loved yellow metal in the world – Gold. It wasn’t until 1971, that the Bretton Woods monetary system was discontinued. The use of gold as a currency is what we know as the “Gold Standard”.
Historically, gold has been valued and accumulated as a form of wealth, either in the form of gold bars or bricks, or jewellery. While most of the world is used to seeing gold in its yellow form, we now get to possess gold in various colors such as white gold, rose gold, and different carat classes of yellow gold. And very few countries love gold as much as India.
Beyond an investment perspective, gold has a cultural significance in India, often seen as a status symbol and a sign of wealth and prosperity. They carry importance for every major cultural occasion and festival. To put it into numbers, 50% of the global gold jewellery demand comes from just two countries – India and China (World Gold Council).
You must be wondering why we’re stating so many facts and stories about gold. From the rising demand for yellow metal, a few industries stand to benefit. One of them is the gold mining industry. Specifically, the top gold mining companies in India.
Gold Mining Industry: Overview
Every continent that has gold, is working towards mining and extracting it, save for Antarctica. On a country scale, China is the largest producer of gold, accounting for 9% of global gold production as of 2021.
India has a history of gold mining as well, dating back to the first millennium BCE. Although with lower production, we have mines predominantly present in the Dharwar craton of India. In the twentieth century, outside the city of Bangalore, the Kolar Gold Fields were the major gold mining operations in the country. The mines were closed over twenty years ago, in 2001, but estimates are that over 800 tonnes of gold were produced in 120 years of operation. This took place in the Kolar Greenstone Belt, sized 6 km in width and 80 km in length.
Besides this, there have been other gold mines, such as the Hutti Gold Mine, present in the Raichur District in Karnataka, although this mine closed down in 2020. 88% of the country’s gold reserves are located in Karnataka, and 12% are in Andhra Pradesh.
Listed Gold Mining Companies In India
Here is a list of some of the gold mining companies in India. While some of them are not directly involved in the mining of gold, they have a presence in the gold industry.
S. No. | Company | Market Cap | Current Price |
1 | Titan Company | 2,26,247.86 | 2,548.45 |
2 | Muthoot Finance | 40,953.74 | 1,020.15 |
3 | Rajesh Exports | 18,511.32 | 626.95 |
4 | Kalyan Jewellers | 10,743.45 | 104.3 |
5 | Manappuram Finance | 10,715.36 | 126.6 |
6 | Vaibhav Global | 4,973.57 | 301.4 |
7 | Thangamayil Jewellery | 1,402.46 | 1,022.2 |
8 | Asian Star Company | 1,120.62 | 699.95 |
9 | Renaissance Global | 808.74 | 85.2 |
10 | Deccan Gold Mines | 622 | 49.04 |
1. Rajesh Exports Ltd.:
At number #1 on our list of gold mining companies in India is Rajesh Exports Ltd. Sitting subtly in Bengaluru, India, it is the largest gold processing company in the world. In fact, they are responsible for processing 35% of the gold produced in the world. It is also the largest exporter of gold products from India. The company’s primary mining facility is located offshore, in Balerna, Switzerland.
Fundamentals Of Rajesh Exports:
CMP | ₹ 627 | Market Cap (Cr.) | ₹ 18,511 Cr. |
EPS | ₹ 40.8 | Stock P/E | 15.4 |
ROCE | 8.85 % | ROE | 8.53 % |
Face Value | ₹ 1.00 | Book Value | ₹ 456 |
Promoter Holding | 54.0 % | Price to Book Value | 1.38 |
Debt to Equity | 0.05 | Dividend Yield | 0.16 % |
Net Profit Margin | 0.42 % | Operating Profit Margin | 0.42 % |
Rajesh Exports (NSE: RAJESHEXPO) is a mid-cap gold mining company, with a market capitalization of ₹18,511 crores. Despite having a market cap of a regular mid-sized company, its revenues are well over ten times its market capitalization.
Their 9MFY23 revenues stood at ₹2,24,241 crores and FY 22 revenues were reportedly ₹2,43,128 crores, much larger than the market cap of some large-cap stocks. Despite such immense revenues, their OPM and net profits are substantially low. In FY22, their profits were ₹1,009 crores, a fraction of their revenues for the year.
Gold mining is a highly capital-intensive business and this leaves little room for margins. Coming to the ratios, ROE of 8.5% and ROCE of 8.8% put the company amongst the average-performing gold mining companies. They have managed to stay virtually debt free, which is a positive sign for a company involved in the mining industry.
Promoters own a little over half of the company (54%), with zero pledging and no change in the recent quarters. Despite being profitable with sky-high revenues, the stock price has only moved 9.47% into the red in the past 5 years.
2. Deccan Gold Mines:
At #2, is Deccan Gold Mines. The company’s operations are a little different from other mining companies. They are involved in gold exploration, in the states of Andhra Pradesh and Karnataka. The purpose of exploring gold is to check for the commercial viability of mining it in the future. Despite a huge demand for gold, domestic mining has fallen significantly and Deccan Gold Mines looks to bridge the gap by exploring suitable mines.
Fundamentals Of Deccan Gold Mines:
CMP | ₹ 49.0 | Market Cap (Cr.) | ₹ 622 Cr. |
EPS | ₹ -0.25 | Stock P/E | N/A |
ROCE | -6.15 % | ROE | -6.20 % |
Face Value | ₹ 1.00 | Book Value | ₹ 4.40 |
Promoter Holding | 30.5 % | Price to Book Value | 11.1 |
Debt to Equity | 0.08 | Dividend Yield | 0 |
Deccan Gold is a fairly small-cap company, sized at ₹622 crores by market cap. As per their FY 22 report, they made about ₹76.5 lakhs in revenue, up from ₹71.7 lakhs in the previous fiscal. However, they are mostly loss-making, and posted net losses of ₹2.63 crores. This is a lower figure than FY 21’s ₹3.03 crores.
Despite being a loss-making organization, it has managed to maintain a low D/E ratio of 0.08. Promoters of the firm own about 30.5 percent stake in the company, and there has been a recent increase of ownership by almost 5 percent. The stock has given a 5-year return of 26.7 percent, which, although low, is still in the positive.
3. Titan Company Ltd.:
To the Tata Loyalists, Titan Company Ltd. is one of the best performers in the group’s belt. To the investing community, Titan is arguably the best stock of former ace investor Rakesh Jhunjhunwala.
Whatever side you take, one can agree that Titan is a name to remember in the gold and accessories market. Titan is a jewelry and accessories company, selling gold and silver jewelry using their flagship brand Tanishq, and accessories such as watches, backpacks, and sunglasses through Fastrack. While Titan isn’t necessarily a gold mining stock, it is an important name in the gold jewellery industry in India.
Fundamentals Of Titan:
CMP | ₹ 2,548 | Market Cap (Cr.) | ₹ 2,26,248 Cr. |
EPS | ₹ 34.1 | Stock P/E | 73.8 |
ROCE | 21.4 % | ROE | 26.4 % |
Face Value | ₹ 1.00 | Book Value | ₹ 115 |
Promoter Holding | 52.9 % | Price to Book Value | 22.1 |
Debt to Equity | 0.75 | Dividend Yield | 0.29 % |
Net Profit Margin | 7.78 % | Operating Profit Margin | 12.1 % |
Titan is one of the biggest gold companies in India, selling jewellery to the Indian populous through their household brands, Tanishq, Caratlane, Mia, and Zoya. The company has a Goliath market cap of ₹2,26,248 crores, making it a large-cap gold company.
The company’s 9M FY23 sales were ₹30,215 crores, outdoing FY 22’s sales figures of ₹28,799 crores, while having a quarter to spare. The same applies to their net profits, which were ₹2,538 crores in 9M FY 23 versus ₹2,198 crores in the whole of FY22. This shows the company is growing while breaking its records. It has a very high ROE (26.4 percent) and ROCE (21.4 percent).
The stock P/E (73.8) however, is quite high, indicating that investors are willing to pay a premium for the stock. Titan has a manageable and low D/E of 0.75. For dividend investors, this is a stock to watch for, giving a healthy dividend payout of 30.3 percent. Promoters of the company, Tata Sons, own 52.9 percent of the company. They haven’t added or lowered stakes in recent months.
In the past 5 years, Titan has given a return of 158 percent, making it a multi-bagger. Investors who put in ₹1,00,000 into Titan will now be sitting on stocks worth approx ₹2.58 lakhs.
Also Read: Gold ETFs vs Gold Mutual Funds – Exploring The Differences
4. Muthoot Finance Ltd.:
When you land on the home page of Muthoot Finance Ltd., you’re instantly greeted by Bollywood legend Amitabh Bachchan, holding a box with a dazzling gold chain. Muthoot Finance is an NBFC that provides loans for assets such as gold and housing, as well as small personal loans.
Fundamentals Of Muthoot Finance:
CMP | ₹ 1,020 | Market Cap (Cr.) | ₹ 40,954 Cr. |
EPS | ₹ 88.0 | Stock P/E | 11.6 |
ROCE | 14.2 % | ROE | 23.6 % |
Face Value | ₹ 10.0 | Book Value | ₹ 479 |
Promoter Holding | 73.4 % | Price to Book Value | 2.13 |
Debt to Equity | 2.43 | Dividend Yield | 2.16 % |
Net Profit Margin | 35.7 % | Operating Profit Margin | 81.8 % |
Muthoot Finance is one of the largest NBFCs in the gold loan industry. Their FY 22 annual report shows that the company had the best year in its history. Revenues were ₹11,082 crores translating to an operating profit margin of 83 percent and net profits of ₹3,954 crores.
Over time, their margins have improved, leaving more capital for net profits and expansion. The company has an impressive ROE of 23.6 percent and a moderate ROCE of 14.2 percent. The stock P/E (11.6) is almost half of its industry (23.2), indicating a potentially underpriced stock. Promoters of Muthoot own almost 3/4th of the company, and they haven’t reduced their holdings anytime recently.
With a 5-year return of 136 percent, Muthoot Finance is one of the best-performing stocks in the gold financing industry.
5. Manappuram Finance Ltd.:
If gold was bought only by paying up the full amount up front, it would be unreachable to millions of Indians. That’s where companies like Manappuram Finance come into the picture. Manappuram is an NBFC involved in financing solutions for housing, vehicles, and of course, gold.
Fundamentals Of Manappuram Finance:
CMP | ₹ 127 | Market Cap (Cr.) | ₹ 10,715 Cr. |
EPS | ₹ 15.9 | Stock P/E | 7.98 |
ROCE | 11.9 % | ROE | 16.9 % |
Face Value | ₹ 2.00 | Book Value | ₹ 106 |
Promoter Holding | 35.2 % | Price to Book Value | 1.2 |
Debt to Equity | 3.07 | Dividend Yield | 2.37 % |
Net Profit Margin | 21.9 % | Operating Profit Margin | 63.8 % |
Manappuram Finance is a small-cap NBFC, valued at ₹10,715 crores by market cap. Their business in providing loans for various purposes, including gold, earned them revenues of ₹6,061 crores last fiscal (FY 22). 9M FY 23 revenues were ₹4,912 crores, inching closer to their previous year’s figures.
The company has a very healthy financing profit margin of 32 percent, allowing them to keep a good slice of the profits every year. However, margins had fallen from 2021’s figures of 39 per cent. 9M FY 23 profits were ₹1,084 crores, and FY 22 profits were ₹1,329 crores.
Manappuram has a positive and moderate ROE (16.9 percent) and ROCE (11.9 percent). Trading at a current price of ₹127 per share, the NBFC has a stock P/E of 7.9, a third of its industry P/E of 23.2. Promoter holding of Manappuram Finance is quite low, at just 35.2 percent. But there hasn’t been any stake sale in the recent quarters. Despite solid performances in recent years, the stock has moved marginally by 4.45 percent in the green.
In Closing
Historically, gold has been one of the most trusted investments worldwide. Especially in India, where owning gold is a must: either as jewellery or as an investment. While that importance in Indian society will not change anytime soon, the companies listed above will continue to thrive off the immortal adoration for the yellow metal. That’s all for this blog post on “gold mining companies in India’’. Happy Investing!
FAQ:
1. What is gold mining?
Gold mining is the process of extracting gold from the earth’s crust through various methods such as placer mining, hard rock mining, and by-product mining.
2. Which is the largest gold mining company in India?
The largest gold mining company in India is Rajesh Exports Ltd. based in Bengaluru. It is the world’s largest gold processing company and processes 35% of the gold produced globally.
3. Which is the best gold stock to buy in India?
These are the best gold stock to buy in India;
- Titan Company Ltd.
- Muthoot Finance Ltd.
- Rajesh Exports Ltd.
- Kalyan Jewellers India Ltd.
- Manappuram Finance Ltd.
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