The jewellery industry saw a surprising twist this week. Despite delivering one of its strongest quarterly earnings performances in recent years, Kalyan Jewellers shares took a sharp hit in the stock market, falling nearly 9.5% intraday on August 8, 2025. Investors were left wondering why would a stock drop after such positive results?
Let’s break
down the earnings report, the stock market reaction, management’s key comments,
and what it could mean for the company in the coming months.
Q1 FY26 at a Glance,Key Financial Highlights
Kalyan Jewellers
posted a consolidated net profit of ₹264 crore in the quarter ended June
2025, representing an impressive 48% year-on-year (YoY) growth compared
to ₹178 crore in the same quarter last year.
Revenue Surge
- Revenue from operations: ₹7,268 crore in Q1 FY26
- Growth: 31% YoY from ₹5,528 crore in Q1
FY25
- Strong demand across India and
Middle East markets drove this revenue increase.
Operational Performance
- EBITDA: ₹508 crore (up 38% YoY from ₹368
crore)
- EBITDA margin: 7% in Q1 FY26 (flat compared to
6.6% in Q1 FY25)
- Despite higher costs, margins
remained steady thanks to strong sales volume.
International Business
- International revenue: ₹1,070 crore (up 32% YoY)
- Middle East revenue: ₹1,026 crore
- Middle East PAT: ₹22 crore (up 18% YoY)
These numbers
indicate balanced growth across domestic and international markets.
Stock Market Reaction Why Did Shares Fall?
Despite such
robust earnings, Kalyan Jewellers shares declined sharply. On August 8:
- Intraday low: ₹535 per share (down 9.5%)
- Last traded price: ₹544.60 per share (down 7.87%) on
NSE
- Weekly fall: 6.57%
- Monthly drop: 4.50%
The stock has
also slipped 14% from its recent opening high of ₹615.
52-week Performance
- 52-week high: ₹633.40 per share
- 52-week low: ₹202.60 per share
- Market Capitalisation: ₹60,959.21 crore
The sharp
decline could be attributed to:
- Profit Booking — Investors locking in gains
after a strong rally.
- High Expectations — Earnings were strong, but
perhaps investors were expecting even better margins.
- Gold Price Volatility — Persistent fluctuations in gold
prices have made investors cautious.
Management’s Strategic Highlights
During the Q1
results announcement, the management revealed some important strategic moves.
Lean Credit
Procurement Initiative
- Aimed at improving profit
margins and Return on Capital Employed (RoCE).
- If fully implemented, it would
require ₹1,500–2,000 crore additional capital investment.
Regional Brand
Expansion
- Plan to launch five new stores
in a single state within 12 months.
- Will operate under the FoCo
(Franchise-owned, Company-operated) model, reducing operational risks.
Debt Strategy
- No immediate debt reduction.
- Focus first on monetising real
estate collateral with banks.
Executive Commentary
Ramesh
Kalyanaraman, Executive
Director, said:
“We have
started off the ongoing quarter well despite continuing volatility in gold
prices and a higher base. We are upbeat about the upcoming festive season
across the country and are gearing up for the launch of fresh collections and
campaigns.”
This statement
reflects confidence in demand ahead of the festive season,
traditionally a peak sales period for jewellery companies in India.
Why Investors Are Concerned Despite Good Earnings
While the
results are strong, some concerns remain:
1. Gold Price Fluctuations
Jewellery sales
are highly sensitive to gold price movements.
- If prices rise sharply, customers
may delay purchases.
- If prices fall too quickly,
inventory value could drop.
2. High Capital Expenditure
The
₹1,500–2,000 crore investment plan could strain cash flows in the short term,
even if it promises higher returns later.
3. Flat Margins
EBITDA margins
remained flat at 7%, despite higher sales. This suggests rising operational
costs are eating into profitability.
Detailed Quarterly Financial Table
| Metric | Q1 FY26 | Q1 FY25 | Change |
|---|---|---|---|
| Revenue from Operations | ₹7,268 crore | ₹5,528 crore | +31% |
| Net Profit | ₹264 crore | ₹178 crore | +48% |
| EBITDA | ₹508 crore | ₹368 crore | +38% |
| EBITDA Margin | 7% | 6.6% | Flat |
| International Revenue | ₹1,070 crore | ₹810 crore | +32% |
| Middle East PAT | ₹22 crore | ₹18.6 crore | +18% |
|
Note: Percent changes are year-on-year (YoY). Values are as reported by the company for Q1 FY26 and Q1 FY25.
Stock Chart Analysis (Past 1 Year) Over the last
year, Kalyan Jewellers shares have:
Technical Insights
Outlook,What’s Next for Kalyan Jewellers? Positive Factors
Challenges
Expert Opinions Market analysts
are divided:
A Mumbai-based
jewellery market analyst told us: “The
fundamentals remain strong, but valuations were stretched. This correction
could be healthy for the stock.” Kalyan Jewellers,Company Overview
The company has
a strong brand recall in India and has been aggressively expanding in
the Middle East. Final Take,Should Investors Worry? The 9.5% fall
in Kalyan Jewellers shares after such a strong earnings report may look
worrying, but it’s not unusual in stock markets where expectations are high. In the short
term, volatility may persist due to:
However, the long-term
growth story remains intact, especially with expansion plans, strong festive
demand outlook, and steady international business growth. Risk Disclaimer This article is
for informational purposes only and does not constitute investment advice.
Stock market investments are subject to market risks, including loss of
principal. Please consult a qualified financial advisor before making any
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