Shares of Kalyan Jewellers India, one of the country's largest jewellery firms, extended their bearish trend to the seventh consecutive trading session on Monday, January 13, falling by another 7% to hit a 20-week low of ₹584 apiece.
Over the last seven trading sessions, the stock has lost 26% of its value, marking the longest extended period of sell-off witnessed since February 2022, when the stock logged an eight-day decline.
According to market experts, the recent downturn in the stock was attributed to profit booking, following a one-way rally between March 2023 and December 2024, which resulted in stellar gains of 651%.
Despite the profit booking, the broader news surrounding jewellery companies has remained positive, including a surge in gold prices, increased jewellery demand, and healthy Q3 business updates.
In its Q3 FY25 business update, the company reported revenue growth of approximately 41% compared to Q3 FY24, driven by strong festive and wedding demand across both gold and studded categories.
In the Middle East, the company achieved revenue growth of approximately 22% compared to the same period in the previous financial year. The Middle East contributed 11% to the company’s consolidated revenue for the recently concluded quarter.
The quarter also recorded healthy same-store sales growth of approximately 24%. During this period, the company launched 24 Kalyan showrooms in India and has a strong pipeline of showrooms set to open in the current quarter.
For the current quarter, the company plans to launch 30 Kalyan showrooms and 15 Candere showrooms in India, keeping it ahead of its announced showroom roll-out plan of 80 Kalyan showrooms and 50 Candere showrooms in India for FY 2025. For FY 2026, the company has drawn up plans to launch 170 showrooms across the Kalyan and Candere formats.
Meanwhile, the rise in gold prices benefits organised jewellery players, as they hedge 70%–90% of their gold but still gain from the unhedged portion when gold prices increase.
Despite the recent sharp correction, Kalyan Jewellers stock has still gained 400% over the last two years and 751% over the last three years. Notably, in the past 20 months, the stock ended 15 months in positive territory, with August 2023 recording the highest monthly gain of 44%, followed by June 2024 with a 29% gain.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
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