NEW DELHI: Despite reporting 49% growth in its net profit in the June quarter of the current financial year (Q1FY26), shares of Kalyan Jewellers fell over 9 per cent on Friday. The jewellery major’s stock fell more than 9% intraday to hit a low of ₹535 per share.
Kalyan Jewellers on Thursday reported a 49% year-on-year (YoY) increase in its consolidated net profit at ₹264 crore in the quarter ended June 2025 (Q1 FY26). In the corresponding quarter last year, the jewellery firm had clocked a profit of ₹178 crore.
The company's revenue from operations stood at ₹7,268 crore, up 31% YoY in Q1 FY25, compared to ₹5,528 crore in the first quarter of FY2024-25 (Q1FY25).
The fall in share prices also comes even as most brokerages have a buy call on the stock. Motilal Oswal Financial Services maintained a ‘BUY’ rating on the stock with an unchanged target price of ₹700, based on 45x June’27 EPS.
“India EBITDA was 10% above our estimates led by robust gross margins as (i) company implemented a pilot project of lean credit period to its vendors which resulted in higher margins/better RoCE and, (ii) inventory gains due to increase in prices of silver/platinum,” noted the brokerage.
Kalyan Jewellers is also planning to launch new regional brands for every state to target the customers with regional taste and capture the pie from unorganised segment. It has temporarily paused the repayment of its debt obligation until release of its real estate collateral.
Demand in Q2 remained until last week of June, post which the high base is optically leading to some YoY slowdown in growth, with growth again expected to pick in Q2 due to the festive season.
"Its steps towards lean credit policy is expected to drive profitability and improve RoCE, while the regional brand strategy is aimed at increasing the TAM; however, this would also lead an increase in the overall capital employed in the business. We largely maintain our EPS estimates as benefits of better margins gets negated by higher interest cost required for working capital requirement for the new pilot,” said Motilal Oswal in its note.
ICICI Securities noted that despite a higher base and increasing FOCO saliency (43% of India revenue), profitability surprised positively supported by procurement gains and operating leverage.
“Non-south now contributes more than 50% of India revenue, studded share held at 30%, and Middle East mix improved. It retained aggressive rollout guidance (170 stores in FY26 – 90 Kalyan and 80 Candere) and it has plans to launch regional brands during the year. With steady demand trends, despite elevated gold prices and an accelerating store rollout, we expect Kalyan’s revenue momentum to remain strong. With RoCE at 21.8% and net debt/equity (ex-GML) near zero, the business remains well placed to drive capital-efficient scale,” said ICICI Securities. It maintains a buy call on the stock with a price target of ₹670.