Very closely related to a city that is famously called the Diamond Hub of India (Surat), a place where sparkling gems aren’t just stones but a way of life. Over the years, I’ve witnessed a fascinating shift—one that still amazes me every time I hear about it. The transition from natural diamonds to lab-grown diamonds (LGDs) isn’t just an industry trend; it’s a cultural movement.
Talking to friends whose families have been in the diamond trade for generations, I hear firsthand how Millennials and Gen Z are rewriting the rules of luxury. What was once a distant dream—the solitaire engagement ring or that dazzling diamond necklace—is now within reach, thanks to LGDs. And let’s be honest, it’s a win-win for both men and women. Women get more variety, better clarity, and a guilt-free sparkle, while men? Well, they don’t have to empty their life savings to propose anymore (finally, a sigh of relief! 😆).
But beyond the glamour and affordability, there’s a world few get to see—the silent hum of thousands of machines, the steady rhythm of workers polishing each diamond with precision, and the unseen effort that transforms carbon into brilliance. It’s a world where thousands toil amidst hazardous chemicals, extreme temperatures, and endless hours of craftsmanship, all to bring us that one perfect stone.
The shift to lab-grown diamonds is not just about cost or sustainability—it’s a revolution. And today, we’re diving deep into how this transformation is reshaping the diamond industry forever. Ready to explore? Let’s go!
The process of manufacturing lab-grown diamonds is highly scientific but results in diamonds that are identical to natural ones. The value chain consists of several key stages:
Lab-grown diamonds are produced using two main methods:
India is already the largest processor of natural diamonds, but now it's rapidly gaining dominance in LGD production. Here’s why:
Despite rapid growth, the LGD industry faces some challenges:
Goldiam International Ltd is a pioneer in India's LGD industry, integrating diamond manufacturing, jewelry production, and e-commerce distribution. Goldiam International Ltd, established in 1986, specializes in manufacturing and exporting diamond-studded gold and silver jewelry. The company's product range includes engagement rings, wedding bands, anniversary rings, bridal sets, earrings, and pendants.
Goldiam has been transitioning from a focus on natural diamonds to becoming a major supplier of lab-grown diamond jewelry, adopting an omnichannel sales strategy. The company serves retailers, departmental stores, and wholesalers across American and European markets, with exports primarily to the United States, Europe, and other countries.
Goldiam's subsidiaries include Goldiam Jewellery Limited, Diagold Designs Limited, Eco-Friendly Diamonds LLP, and Goldiam USA, Inc.
The company underwent a transformation from being an exporter of cut and polished diamonds in the 1990s to becoming a value-added jewelry manufacturer for both NDs and LGDS. Currently, the company is moving forward by integrating into retail stores under its own brand.
LGD Contribution to Revenue:
Earlier (Pre-FY22): ~10% of revenue
FY23: ~40% of revenue
FY24: ~80% of revenue (indicating a major strategic shift)
Natural Diamond Contribution: Steadily declining as LGD adoption increases.
Goldiam has undergone a significant transformation, shifting from a traditional in-store jewelry retailer of natural diamonds to a leading supplier of lab-grown diamond jewelry, supported by an omnichannel sales strategy.
In the third quarter of FY25, the share of lab-grown diamond jewelry in export revenue reached 80%, compared to 58% in the same quarter of FY24. Additionally, online sales accounted for 28% of total sales in Q3 FY25.
Goldiam is capitalizing on the rising demand for lab-grown diamonds (LGD) by implementing an aggressive expansion strategy. The company’s initial goal is to establish 25 company-owned and operated (COCO) stores within the next two - three years, prioritizing prime locations. Subsequently, it plans to transition into a franchise model.
Goldiam has seen a pivotal shift in online sales post-COVID-19, with U.S. customer behavior increasingly favoring online jewellery purchases. The company benefits from rapid payment cycles:
The company’s valuation is supported by its high-margin business, strong cash flows, and scalable retail expansion. While the broader diamond industry faces headwinds, Goldiam’s pivot towards LGD and B2C retail strengthens its long-term outlook.
Goldiam’s entry into Indian retail through ORIGEM marks a strategic shift from a purely export-driven model. Key developments include:
Goldiam has structured its store model with strong unit economics to ensure profitability from the outset.
Goldiam’s forward integration into jewellery manufacturing and retailing is expected to drive margins and ROCE.
The lab-grown diamond industry is still in its early stages but is poised for exponential growth. Here is an interesting video that shows the growth journey of Natural diamonds vs. lab-grown diamonds over the years: c6b2e521-e4b4-442c-b577-aeb0598afa1a.wmv
Lab-Grown Diamonds (LGDs) are groundbreaking products that offer properties comparable to natural diamonds but are available at only one-tenth the cost. The company is leading the current transformation in the diamond jewelry sector, supported by strong distribution advantages from its partnerships with major retailers in the USA. With a solid management team and a history of financial prudence, the company distinguishes itself from other companies in the diamond jewelry market, some of which have questionable reputations.
The company has consistently rewarded its shareholders, distributing Rs. 2.1 billion over the past six years through dividends and buybacks. Notably, GIL has zero debt and a strong cash position of Rs. 2.7 billion as of the first half of FY24, demonstrating financial strength and resilience that is uncommon for a company of its size.
Over time, the company has transitioned from being a commodity player to a value-added participant. It focuses exclusively on jewelry manufacturing and avoids the commoditized trading of cut and polished diamonds. Key drivers of its robust revenue growth include maximizing wallet share with retailers in the USA, entering the Indian retail market for Lab-Grown Diamond jewelry with its proprietary brand, and expanding into new geographical territories.
As acceptance of Lab-Grown Diamonds continues to rise in the USA, it is expected that this trend will extend to India. Given that India has the largest consumer market with approximately 410 million millennials, the shift toward LGDs is likely to gain momentum in the country. We believe the company has strong jewellery manufacturing capabilities and the financial resources necessary to reinvest and build a powerful proprietary brand. Goldiam International is at the forefront of a revolutionary shift in the jewellery industry. As consumer preferences evolve and lab-grown diamonds become the new norm, Goldiam’s strategic expansion, robust financials, and innovation-driven approach position it as a clear winner in the space.
With its aggressive retail expansion in India, strong presence in the U.S., and innovative digital strategies, the company is not just adapting to change—it is leading it. Investors and industry stakeholders should closely monitor this growing sector and its pioneers, such as Goldiam, as it strives to become a dominant force in the global jewelry market. The future looks promising for LGD’s, much like the diamonds —sustainable, innovative, and full of potential!
Share your thoughts on whether you would prefer a lab-grown diamond or a natural diamond to surprise your loved one with. 🙂
The information provided in this reference is for educational purposes only and should not be considered investment advice or a recommendation. As an educational organization, our objective is to provide general knowledge and understanding of investment concepts. We are SEBI-registered research analysts.
It is recommended that you conduct your own research and analysis before making any investment decisions. We believe that investment decisions should be based on personal conviction and not borrowed from external sources. Therefore, we do not assume any liability or responsibility for any investment decisions made based on the information provided in this reference.
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