Jewellery stock crashes 18% after company announces Q1 results

Synopsis:
Kalyan Jewellers dropped 18% today from its day high despite reporting a strong 48% and 31% growth in Net profit and Revenue, respectively. One of the main reasons behind this fall is the contraction of margins in its Indian business.

The shares of this leading manufacturer and seller of gold jewellery are in focus after posting a stellar business performance in this quarter. However, some reasons attributed to a massive downfall in the share prices despite a good quarter performance.

With a market capitalization of Rs 55,831 crore, the shares of Kalyan Jewellers India Ltd are currently trading at Rs 541 per share, representing a 32 percent decline from its 52-week high of Rs 794.60 per share. In the last one year, the stock has delivered a minor gain of 1.3 percent.

Q1 Highlights

Kalyan Jeweller’s revenue for Q1 FY26 came in at Rs 7,268 crore, registering a 31 percent growth from Rs 5,528 crore in the same quarter last year. Additionally, on a sequential basis, revenue surged by 17.6 percent from Rs 6,182 crore in Q4 FY25. 

Coming to its profitability, the company reported a net profit growth of 48.3 percent to Rs 264 crore in Q1 FY26 as compared to Rs 178 crore in Q1 FY25. However, on a QoQ basis, it increased by 40.4 percent from Rs 188 crore.

In Q1 FY26, the company posted strong revenue growth across regions. Southern region revenue rose 30 percent YoY to Rs 3,116.2 crore, while non-south revenue grew 33 percent to Rs 3,026.1 crore. South contributes about 51 percent of the total revenue. 

In segment-wise revenue, the Gold segment led with Rs 4,223.9 crore, up 32 percent YoY, while Studded jewellery revenue grew 30 percent to Rs 1,857.9 crore. Same Store Sales Growth stood at 20 percent in the South and 16 percent in the non-South. The studded jewellery share in the South slipped slightly to 30.3 percent from 30.4 percent last year.

In the Middle East, revenue climbed 27 percent YoY to Rs 1,026.5 crore, with studded jewellery share improving to 18.4 percent from 16.4 percent a year earlier, indicating a positive shift in product mix.

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But why did it fall despite such a good growth story?

One of the key factors behind the decline in Kalyan Jewelers’ stock was a 60-basis-point dip in their gross margin for the Indian market, bringing it down to 13.6 percent. Experts point out that the growing share of franchise stores played a significant role in this drop. Additionally, the fluctuations in gold prices have also dampened investor confidence.

Multiple brokerages like CITI, Motilal Oswal expect the company’s share to rise by another 30 percent from its current level, citing strong Q1 performance and strong future growth with efficient management response.

Kalyan Jewellers India Limited, along with its subsidiaries, creates and sells a stunning variety of gold and precious stone jewellery. Their collection features everything from gold and diamond pieces to silver, platinum, and gemstone jewellery, perfect for weddings, everyday wear, and those special moments.

You can find beautiful items like chains, necklaces, bangles, rings, earrings, pendants, anklets, and much more, all under well-known brands like MUDHRA, NIMAH, ANOKHI, and CANDERE. The company proudly operates showrooms throughout India and the Middle East, as well as My Kalyan Grassroots stores.

Written by Satyajeet Mukherjee

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