Beyond the Crash: Is Kalyan Jewellers underperformance a red flag?
Kalyan Jewellers’ stock has hit a 52-week low, falling 17.5% year-to-date due to institutional selling and increased promoter share pledging.
Kalyan Jewellers has had a rough start to 2026, with the stock sliding 17.5% this calendar year, lagging peers. On Wednesday, Kalyan Jewellers’ stock slid to its 52-week low of ₹390, plunging 12% and remaining deep in the red, while peers are up 0.4-4.5%. Sky Gold and PC Jeweller have slipped too, but only marginally, by 0.4-1%.
In the 2026 calendar year, PN Gadgil is down 9.6%, Sky Gold and Diamonds 2.6% and Senco Gold 2%, while Titan is marginally up 1%. PC Jeweller and Thangamayil Jewellery stand out on the upside, rising 11.2% and 16.4%, respectively.
Three people aware of market developments told Mint that the recent drop in Kalyan Jewellers’ stock price is likely linked to selling pressure from mutual funds, as some funds trimmed their holdings. This activity may have added to the volatility, even as the company’s fundamentals and quarterly performance pointed to strong growth.
BSE data shows that Motilal Oswal Midcap Fund held a 9.04% stake in Kalyan Jewellers at the end of the December quarter, from a 7.5% stake as of the June quarter. The government of Singapore’s holding fell to 1.75% from 2.15% in June, while Sundaram Midcap Fund, which previously held a 1% stake, no longer appears in the December data, indicating its holding either dropped below 1% or was fully exited.
Kalyan Jewellers did not respond to Mint’s queries.
Sunny Agrawal, head of fundamental research at SBI Securities, said, “The recent selloff in Kalyan Jewellers could be due to mutual fund reshuffling and oversupply".
He added that the stock is trading at a reasonable valuation and, fundamentally, the company’s business prospects remain strong, with Q3 results signalling robust growth.
Liquidity gap
“While there is downward pressure on the stock, there are limited buyers in the market for the stake that some shareholders want to exit," an analyst at an equities brokerage told Mint, requesting anonymity as he is not authorised to speak to the media.
Kalyan Jewellers’ stock came under pressure last month as the promoters pledged more of their stake in the company. Per the latest available data from the National Stock Exchange (NSE), pledged shares stand at 15.62% of the company's share capital and nearly a quarter of the promoter’s stake, valued at over ₹8,500 crore.
A person familiar with the developments said the additional share pledge by the promoters was to comply with the requirements of an existing loan.
Kalyan Jeweller’s stock is trading at a reasonable valuation, with an FY27 price-to-earnings multiple of 28 times and likely earnings growth of over 20%. That said, he pointed out that the risk to earnings growth could be the postponement of demand due to the steep rise in gold prices, which jewellers are mitigating by offering lower-carat products.
Looking at other listed jewellers, PN Gadgil is trading at a current PE of 32.2 times, close to its five-year average of 32.8 times. Senco Gold is at 30.9 times, below its long-term average of 35.6 times, while Titan trades at 87.7 times, compared to its five-year average of 98.5 times, Bloomberg data showed.
Robust performance
In its Q3 FY26 update, the Kerala-based jewellery company said its India operations saw revenue growth of around 42% year-on-year (y-o-y), driven mainly by strong festive demand. Sales remained robust even after Diwali, despite volatility in gold prices, with growth broad-based across plain gold and studded categories. The quarter also saw healthy same-store sales growth of about 27%, the company said.
Its international operations recorded revenue growth of about 36% y-o-y. During the December quarter, the company launched 21 Kalyan showrooms in India, one Kalyan showroom in the UK, and 14 Candere showrooms in India.
The company will announce its December quarter results on 6 February.
In Q2 FY26, Kalyan Jewellers added 15 new showrooms in India and reported revenue growth of about 31% compared with Q2 FY25, largely driven by healthy same-store sales growth of 16%. New customer additions remained strong, with first-time buyers accounting for over 38%, the company said in its presentation.
The jeweller posted a strong showing, with consolidated revenue climbing 30% y-o-y to ₹7,856 crore, while profit after tax more than doubled to ₹260.5 crore from ₹130.3 crore.
Centrum Broking noted in its Q2 results update that the quarter brought clarity on the debt-reduction plan and progress on the regional brand strategy. The domestic business performed well, store additions resumed in the Middle East after several quarters of status quo, and Candere continued to see healthy traction, with profitability expected to break even or turn positive in FY26.
In its 8 January report, ICICI Securities forecast the jeweller’s revenue, Ebitda, and PAT to grow at a strong compounded annual rate of 26%, 24%, and 33%, respectively, over FY25-28. The brokerage has maintained its ‘buy’ rating on the stock, with a target price of ₹670 apiece.
Kalyan Jewellers’ share price settled at ₹396.85 on Wednesday.
The brokerage noted that the main risks include possible delays in showroom expansion and increased competition in the core South Indian markets.
(Soumya Gupta contributed to this story)
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