Kalyan Jewellers sharply lower by over 7 percent on heavy volumes despite strong Q1 earnings

Kalayn also said it plans to launch new regional brands offering exclusively localised designs.

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Shares of Kalyan Jewellers are sharply lower in the trading session on August 8, down over 7 percent with volumes that are nearly three times the one-month average, despite a healthy June quarter result.

On August 7, Kalyan reported a net profit of Rs 264 crore for the June quarter, up 49 percent on year, with revenue from operations higher by 31 percent at Rs 7,268.48 crore. The Q1FY26 EBITDA was higher by 38 percent on year at Rs 508 crore.

Ramesh Kalyanaraman, ED, Kalyan Jewellers told CNBC-TV18 during an interaction that the Same Store Sales Growth has been 'very strong' in the range of 18 percent, maintaining the double-digit growth trend of past 6-8 quarters, and there are no triggers that would change this drastically. Going forward, the jeweller is hoping to benefit from more number of festive days in the ongoing Q2FY26.

The jeweller also said it has reduced bank loans by Rs 500 crore so far.

Rising Share of Organised Players

The organised retail market share in the jewellery business has been consistently rising from 32 percent in 2020 to 40 percent this year, with high demand and ownership in the rural India. Kalyan said it is sitting with a 7 percent share in the organised pie, and its strong brand and scalable model positions it well to capitalise on the opportunity arising from the shift towards organised jewellery. The jeweller is expanding largely via a capital-light franchise store strategy. Kalayn also said it plans to launch new regional brands offering exclusively localised designs.

On a YTD basis, the shares are down nearly 29 percent but are flat over last one year.

Another leading company from the same space, Titan Company, has said that it is exploring 14 and 18-carat jewellery options in order to offer more affordable pricing for customers.

Street View

Motilal Oswal said in a note that with the successful ramp up of the new franchise businesses - which add 40 percent to the revenue - along with continued success in non-Southern markets, Kalyan has emerged as a leading brand, assigning a target price of Rs 1800 per share with a Buy call.

Tariff Jitters

The gems and jewellery space has also had to contend with the additional levy by US President Trump, which could make US exports unattractive for the sector as a whole. Trade think tank GTRI has said in a note that the India's export segments can be grouped in three categories - very high impact (exports hit of 50-70 percent), high-impact (30-50 percent hit), and low or no impact areas. Among the nine products in the very high impact category, diamonds, gold and jewellery are one of them.

Gems and jewellery exporters' association GJEPC has urged the government for policy reforms to support the industry. America is the largest market for Indian gems and jewellery, accounting for over $10 billion in exports, which accounts for nearly 30 percent of the industry's total global trade, Gem and Jewellery Export Promotion Council (GJEPC) chairman Kirit Bhansali has said.

In an interaction with Bloomberg TV, TK Ramesh, the ED of Kalyan Jeweller said it plans to expand its Dubai manufacturing unit, potentially a move to offset any tariff-related setback.

Impact of High Gold Prices

Another leading company from the same space, Titan Company, has said that it is exploring 14 and 18-carat jewellery options in order to offer more affordable pricing for customers.

In a separate development, the Financial Times has reported that the US has put tariffs on imports of one-kilogram gold bars, a move that could add volatility to the global bullion market, and is a setback for the precious metals business out of Switzerland, following which gold futures in New York have surged to a record high.