Is Kalyan Jewellers underperformance a red flag?
In calendar year 2026, PN Gadgil fell 9.6%, Sky Gold and Diamonds fell 2.6% and Senco Gold fell 2%, while Titan rose marginally by 1%. PC Jeweler and Thangamayl Jewelery stand out on the rise, with increases of 11.2% and 16.4% respectively.
Three people aware of market developments said: Mint It is stated that the recent decline in Kalyan Jewellers’ stock price is probably linked to selling pressure from mutual funds as some funds reduce their holdings. Although the company’s fundamental data and quarterly performance indicate strong growth, this activity may have increased volatility.
BSE data shows Motilal Oswal Midcap Fund held 9.04% stake in Kalyan Jewelers at the end of the December quarter, compared to 7.5% as of the June quarter. The Singapore government’s shares fell to 1.75% from 2.15% in June, while the Sundaram Midcap Fund, which previously held a 1% stake, was no longer included in the December data, suggesting the holding had fallen below 1% or exited altogether.
Kalyan Jewelers did not respond Mint‘s queries.
“The recent sell-off in Kalyan Jewelers could be due to reorganization of mutual funds and oversupply,” said Sunny Agrawal, head of fundamental research at SBI Securities.
He added that the stock is trading at a reasonable valuation and that fundamentally the company’s business prospects remain strong, with third-quarter results pointing to strong growth.
liquidity gap
“While there is downward pressure on the stock, there are limited buyers in the market for shares from which some shareholders want to exit,” said an analyst at a stock brokerage. Mint, He requests that his name remain anonymous because he is not authorized to speak to the media.
Shares of Kalyan Jewelers came under pressure last month as promoters pledged more of their stake in the company. According to the latest data available from the National Stock Exchange (NSE), the pledged shares account for 15.62% of the company’s capital and nearly a quarter of the promoter’s shares. ₹8,500 crore.
A person familiar with the developments said the promoters’ pledge of additional shares was to comply with the requirements of an existing loan.
Shares of Kalyan Jeweler are trading at a reasonable valuation at 28 times price-to-earnings in FY27 and likely earnings growth of over 20%. However, he noted that there could be a risk to earnings growth if demand is delayed due to the rapid rise in gold prices, with jewelers mitigating this situation by offering lower carat products.
Looking at other listed jewelers, PN Gadgil is currently trading at 32.2 times PE; This is close to the five-year average of 32.8 times. Senco Gold trades at 30.9 times its long-term average of 35.6 times, while Titan trades at 87.7 times its five-year average of 98.5 times. Bloomberg the data showed.
Solid performance
The Kerala-based jewelery company, in its Q3 FY26 update, said its India operations recorded revenue growth of around 42% year-on-year, driven mainly by strong festive demand. Sales remained strong even after Diwali, with broad-based growth in plain gold and studded categories, despite volatility in gold prices. The company said it saw healthy same-store sales growth of approximately 27% this quarter.
An annual revenue increase of approximately 36% was recorded in its international operations. In the December quarter, the company opened 21 Kalyan showrooms in India, one Kalyan showroom in the UK and 14 Candere showrooms in India.
The company will announce its December quarter results on February 6.
Kalyan Jewelers added 15 new showrooms in India in the second quarter of FY26 and reported revenue growth of approximately 31% compared to the second quarter of FY25, largely driven by healthy same-store sales growth of 16%. New customer additions remain strong, with first-time buyers accounting for more than 38%, the company said in its presentation.
The jeweler had a strong performance; consolidated revenue increased by 30% year-on-year ₹7,856 crore, with profit after tax more than doubling ₹260.5 crore ₹130.3 crore.
In its second quarter results update, Centrum Broking noted that the quarter brought clarity to its debt reduction plan and progress on its regional brand strategy. Domestic business performed well, store additions resumed in the Middle East after several quarters of status quo, and Candere continued to see healthy momentum; Profitability is expected to breakeven or turn positive in FY26.
ICICI Securities, in its report dated January 8, forecasts the jeweler’s revenue, Ebitda and PAT to grow at a strong compound annual rate of 26%, 24% and 33% respectively over FY25-28. The brokerage firm maintained its ‘buy’ rating on the stock and set its target price. ₹670 each.
Kalyan Kuyumculuk’s share price has been announced ₹396.85 on Wednesday.
Key risks include possible delays in showroom expansion and increased competition in South India’s core markets, the brokerage said.
(Soumya Gupta contributed to this story)
