The sell-off in Kalyan Jewellers shares intensified in Wednesday’s trade, August 5, with the stock falling another 5% to an intraday low of ₹562.70, as the company’s June quarter earnings fell short of Street expectations due to weaker-than-expected margins.
The jewellery retailer, which announced its June quarter results after market hours on Tuesday, reported a 32% year-on-year (YoY) increase in net profit to ₹348 crore, compared with ₹264 crore in the corresponding quarter last year. However, on a sequential basis, profit declined from ₹409 crore reported in the March quarter.
Revenue from operations rose 46% YoY to ₹10,589 crore from ₹7,268 crore, although it was 3% lower on a quarter-on-quarter (QoQ) basis.
Margins under pressure despite strong sales
The company’s India business posted 38% YoY revenue growth, driven by healthy same-store sales growth (SSSG) of 28%, while business-to-consumer (B2C) revenue increased by around 34%.
However, the contribution from studded jewellery, which typically carries higher margins, declined during the quarter. In India, the studded jewellery mix fell to 29.7% from 30.3% a year ago, while in the Middle East it declined to 16.3% from 18.3%.
At the operating level, EBITDA rose 25% YoY to ₹632 crore from ₹505 crore in the year-ago quarter. Sequentially, however, EBITDA declined 14%, while the EBITDA margin contracted by 100 basis points on both a YoY and QoQ basis to 6%.
The company said gross margins in its India business were impacted by a higher proportion of exchanged gold, promotional offers under its exchange campaign, and the high base created by a one-off gain from platinum and silver sales in the corresponding quarter last year. However, it recorded a one-time gain of around ₹41 crore during the quarter following the increase in import duty.
Expansion plans remain on track
On the expansion front, the company added 12 net Kalyan showrooms and five Candere stores during the quarter, taking its total store count in India to 483. It is also set to open its first regional store in Chennai in August 2026.
For FY27, Kalyan Jewellers plans to open 84 Kalyan showrooms, all under the Franchisee-Owned Company-Operated (FOCO) model, along with 50 Candere stores.
Following the June quarter results, domestic brokerage Motilal Oswal cut its earnings-per-share (EPS) estimates by 3-4% for FY27 and FY28. However, it retained its ‘Buy’ rating on the stock with a target price of ₹700.
“With the successful scale-up of its new franchise businesses (contributing over 50% of revenue) and continued success in non-Southern markets, the company has established itself as a leading brand in the industry. Its expansion beyond South India has improved the studded jewellery mix, while the asset-light expansion supports healthy cash flow generation for debt repayment and enhances profitability by reducing interest costs,” the brokerage said.
Stock extends losing streak
With Wednesday’s decline, the stock has fallen 11.2% over the last four trading sessions. Before the recent correction, however, Kalyan Jewellers had enjoyed a strong rally, surging 58% in June, its biggest monthly gain since listing in 2021.
The rally came despite heightened volatility in the broader market and lifted the stock to a 16-month high, crossing the ₹640 mark. Even after the recent rally, however, the stock remains 28% below its record high of ₹795.40.
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