Shares of Kerala-based Kalyan Jewellers India have witnessed a dramatic selloff this month, erasing Rs 27,400 crore in market value in just two weeks. The stock has plummeted 33.7 per cent during this period, with its market capitalization now standing at Rs 53,949.23 crore.
On Thursday, the Kalyan Jewellers shares were down 6.7 per cent to Rs 518.40 on the BSE, following an 8 per cent drop on Wednesday, which included hitting a 10 per cent lower circuit. This marked the ninth decline in the last 10 trading sessions, a period that has seen the stock gain only once.
The Thrissur-based jewellery maker has also been involved in speculation surrounding bribery allegations, which the company has firmly denied. In an analyst call on Tuesday, Executive Director Ramesh Kalyanaraman dismissed rumors about bribery allegations against money managers, income tax raids, and overvaluation of inventory as “very absurd.” Kalyanaraman also clarified that the company has no plans to purchase any aircraft and currently operates a helicopter.
Despite these assurances from company management, the selloff in company’s shares has continued unabated. The stock’s precipitous decline comes after soaring nearly 940 per cent since its March 2021 IPO to a peak of Rs 795 earlier this month.
Investor sentiment has soured despite the jewellery maker reporting a 39 per cent consolidated revenue growth and a 41 per cent revenue increase in its India business in the December quarter. Kalyan Jewellers attributed the strong quarterly results to robust festive and wedding demand, achieving nearly 24 per cent same-store sales growth and opening 24 new outlets during the quarter. However, these positives have failed to stem the stock’s downward spiral.
As of December 31, foreign portfolio investors held a 16.37 per cent stake in the company, while domestic institutional investors owned 13.58 per cent . Promoters led by Kalyanaraman T.S. controlled 62.85 per cent , with Motilal Oswal Midcap Fund holding the largest mutual fund stake at 6.30 per cent .
Kalyan Jewellers operates 349 outlets, including 253 Kalyan Jewellers stores in India, 59 Candere stores, 36 outlets in West Asia, and one in the U.S. The company’s strong showroom expansion pipeline suggests continued growth ambitions.
Nonetheless, analysts’ consensus remains largely optimistic for Kalyan Jewellers. According to data from Trendlyne, eight out of eight analysts covering the stock have a ‘buy’ recommendation, with an average target price of Rs 761 per share.
