Which Lab Grown Diamonds Stocks Are Deep Value Picks in Week of May 31, 2026?

Sector Pulse

The Lab Grown Diamond (LGD) sector is exhibiting 18-21% revenue growth across both manufacturing and certification segments. GOLDIAM reported 18% revenue growth driven by U.S. demand, while IGIL saw 21% growth supported by an 11% volume increase. The demand environment is characterized as 'STRONG' by management, with IGIL noting that retail showrooms for LGD have surpassed 1,000 in India, signaling rapid domestic adoption alongside established export markets.

Catalysts Playing Out Across the Pack

Operating leverage is the primary driver of profitability. IGIL reported a 59.9% EBITDA margin, noting that the 'business model provides great operating leverage as revenue scales.' GOLDIAM similarly saw margins reach 26.7%, significantly above its 18-22% guidance, attributed to its 'U.S. origin casting model' which allowed it to pass on costs. Additionally, the shift toward value-added products is evident; GOLDIAM's LGD jewelry exports reached 90.5% of its mix, up from 80% YoY, while IGIL reported 35% growth in LGD loose stone certifications.

What Managements Are Guiding

Managements are projecting continued growth for the remainder of the fiscal year. GOLDIAM is 'expecting to deliver a record financial year' and raised its store count target to 24-26 by March 2026. IGIL reaffirmed its outlook, citing industry expectations to 'double lab-grown diamond caratage over the next three years,' providing a long-term growth runway. Both companies are well-capitalized, with aggregate cash reserves exceeding ₹1,300 crores.

Sub-Sector Aggregates

The sector maintains high profitability, with an EBITDA margin range of 26.7% to 59.9%. Revenue growth remains consistent between 18% and 21% YoY. Liquidity is a major strength, with aggregate cash and investments across the two analyzed constituents totaling approximately ₹1,364 crores (₹504 Cr for GOLDIAM and ₹860 Cr for IGIL). LGD-specific growth remains the primary driver, with IGIL seeing 35% growth in loose stone volumes.

Shared Risks (9-type taxonomy)

Regulatory risk remains the primary concern due to U.S. tariffs. GOLDIAM noted tariffs were raised to a 'steep 56%' before being adjusted, while IGIL is monitoring 'dynamic changes' in trade policy. Commodity risk is also active, with both firms citing 'steep increases in prices of gold' as a factor impacting inventory value and demand dynamics. GOLDIAM also highlighted FX risk, noting that dollar-rupee depreciation impacts other income.

Bottom Line

The sector is benefiting from a structural shift in consumer preference toward LGD, leading to high operating leverage and margin beats. While regulatory uncertainty regarding U.S. tariffs persists, constituents are successfully navigating these through supply chain adjustments and geographical diversification into Europe and the Middle East.