Kalyan Jewellers share price crashes 9% despite a 49% jump in Q1 profit. Should you buy the stock?
Kalyan Jewellers' share price crashed despite the company reporting healthy year-on-year (YoY) growth in consolidated profit and revenue for Q1FY26.
Kalyan Jewellers' consolidated profit after tax (PAT) for Q1FY26 was ₹ 264 crore, up 49 per cent against the profit of ₹ 178 crore in the same period in the previous financial year.
PAT margin inches up to 3.6 per cent from 3.2 per cent YoY.
The company's consolidated revenue of ₹ 7,268 crore was up 31 per cent year over year. In Q1FY25, it was ₹ 5,528 crore.
EBITDA for Q1FY26 was ₹ 508 crore, up 38 per cent YoY against ₹ 368.4 crore in Q1FY25, while EBITDA margin increased to 7 per cent from 6.7 per cent YoY.
Kalyan Jewellers' lifestyle jewellery platform, Candere, recorded a revenue of ₹ 66 crore and a net loss of ₹ 10 crore for Q1FY26.
'We have started off the ongoing quarter well despite continuing volatility in gold prices and a higher base. We are upbeat about the upcoming festive season across the country and are gearing up for the launch of fresh collections and campaigns,' said Ramesh Kalyanaraman, Executive Director, Kalyan Jewellers.
Kalyan Jewellers is one of the largest jewellery retailers in India with a presence in the Middle East and the US.
Experts appear largely positive about the stock's long-term prospects due to the company's widespread market presence and healthy growth outlook.
Brokerage firm Motilal Oswal Financial Services has a buy call on the stock with a target price of ₹ 700.
"We model a 21 per cent, 17 per cent, and 21 per cent revenue, EBITDA, and PAT CAGR, respectively, over FY26-28E. We have largely maintained our EPS (earnings per share) estimates for FY26 and FY27. We reiterate our buy rating with a target price of ₹ 700, based on a 50 times June 2027 price-to-earnings ratio," said Motilal Oswal.
Motilal highlighted that, with the successful scaling up of its new franchise businesses and continued success in non-Southern markets, Kalyan Jewellers has established itself as a leading brand in the industry.
Motilal believes the company's non-South expansion has improved the studded jewellery mix. The asset-light expansion supports healthy cash flow generation for debt repayment and enhances profitability by reducing interest costs.
Brokerage firm JM Financial, too, has maintained a buy call on the stock with a target price of ₹ 700.
"We largely maintain our EPS estimates as the benefits of better margins get negated by higher interest costs required for the working capital requirement for the new pilot. Maintain a buy rating on the stock with an unchanged target price of ₹ 700, based on 45 times June'27 EPS," said JM Financial.
JM Financial highlighted that Kalyan Jewellers is planning to launch new regional brands for every state, catering to regional demand and increasing the total addressable market by targeting the mass market.
JM Financial underscored that the current Kalyan showrooms target more aspirational customers. The new regional brand will target only those customers who are not aspirational and want to continue with the regional taste.
While the stock appears to be a long-term buy, some technical experts believe investors should consider taking profits on any bounce.
Jigar S. Patel, Senior Manager of Equity Research at Anand Rathi Share and Stock Brokers, pointed out that Kalyan Jewellers stock is showing signs of weakness on the charts, with heavy volumes observed near the ₹ 620 mark.
Kalyan Jewellers technical chart
"The stock has faced multiple rejections at this level, reinforcing it as a strong resistance zone. Additionally, the RSI remains below 40, indicating sustained bearish momentum. Traders are advised to book profits on any upward bounce from current levels," said Patel.
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