Kalyan Jewellers has 303 showrooms spread across India and the Middle East, with a retail area of over 836,000 sq. ft. Headquartered in Thrissur in the state of Kerala, Kalyan Jewellers is one of the largest jewellery retailers in India, with a presence in the Middle East. Kalyan offers a range of traditional and contemporary jewellery designs in gold, diamonds and precious stones to meet the varying needs of customers.
Overview
The stock price of Kalyan Jewellers is continuously falling. So far the stock price has fallen by 27%.Kalyan Jewellers, a major player in the Indian jewellery market, has been experiencing a significant drop in its share price recently. This declining trend has attracted the attention of investors and market analysts, raising concerns about the company’s financial health and future growth prospects.
Kalyan Jewelers stock had hit a record high of Rs 794.60 on January 2, 2025. Pressure continues on Kalyan Jewelers India shares, with the company’s share prices falling for the eighth consecutive day, falling 27 per cent during this period. So far on Wednesday, the jewellery company’s stock has fallen 3.4 per cent to Rs 576.55 on the BSE in intra-day trade. The company made its stock market debut on March 26, 2021. The stock had hit a record low of Rs 55.20 on May 11, 2022. According to the shareholding pattern data for the December 2024 quarter disclosed by Kalyan Jewellers, foreign portfolio investors (FPIs) reduced their stake in the company by nearly 1 percentage point to 15.75 per cent. The data shows that FPIs held 16.37 per cent stake at the end of the September quarter. Meanwhile, data from the exchanges shows that the share of resident individual shareholders in the company increased from 6.08 per cent to 6.47 per cent. The market value of Kalyan Jewellers had surged nine times or 813 per cent against its issue price of Rs 87 per share
This follows robust growth of 30 per cent and 32 per cent in FY23 and FY24, respectively. This growth has been supported by various factors, including healthy same-store sales growth, conversion of unorganised trade to organised trade, improved realisations, rising share of studded jewellery sales and store expansion in non-South markets through the franchise route. The domestic jewellery sector remains exposed to regulatory risks, which may have an adverse impact on business. Restrictions on bullion imports, mandatory PAN disclosure on transactions above a threshold, imposition of GST and demonetisation are some of the regulatory developments that have impacted demand and supply in the past. It said the revenue and cash flows of jewellery players are also exposed to seasonality in demand, based on the number of auspicious days, festivals, crop harvests, etc.The jewellery retail trade is highly fragmented and exposed to intense competition from organised as well as unorganised players. These limit the pricing flexibility of retailers to some extent, although this is mitigated by an established brand and differentiated products offered by large, organised players such as Kalyan Jewellers. Further, its earnings are sensitive to fluctuations in gold prices, ICRA said.
Reasons for decline:
- Market sentiment:
Broad market sentiment influenced by global economic uncertainties has contributed to the decline in stock prices across various sectors, including jewellery.
- Intense competition: With the growing number of regional and organised players in the jewellery market, Kalyan Jewellers is facing stiff competition, impacting its market share.
- Decreased consumer spending: Rising gold costs, as well as reduced discretionary spending, have adversely impacted sales in the jewellery industry.
- Global factors: Volatility in gold prices and geopolitical tensions have further added to the challenges faced by jewellery retailers.
- Earnings pressure: Recent financial results have not met investor expectations, further eroding confidence.
Impact on investors:
The continued decline in share prices has led to concerns among shareholders about the sustainability of their investments. Short-term traders are particularly wary of further losses, while long-term investors are evaluating the company’s ability to address current challenges and sustain growth.
Future Prospects:
Kalyan Jewellers has a strong brand presence and a wide retail network, which can aid its recovery. To regain investor confidence, the company may need to implement strong strategies such as: Expanding its digital presence in the growing e-commerce market. Diversifying its offerings to include affordable jewellery options. Strengthening customer engagement and loyalty programmes. Increasing operational efficiency to improve margins.
Conclusion:
While Kalyan Jewellers’ stock price is under pressure, its long-term potential is linked to its ability to adapt to changing market dynamics and maintain its competitive edge. Investors should closely track the company’s strategic initiatives and the broader market environment to make informed decisions.