Kalyan Jewellers Shares Dip 4% Despite Strong 37% Revenue Surge in Q4FY25 – What’s Behind the Market Reaction?
Kalyan Jewellers Share Price News:
Kalyan Jewellers : Despite posting impressive growth numbers for Q4FY25, Kalyan Jewellers’ stock took a hit, dipping over 4% on April 7. The jewellery giant reported a whopping 37% year-on-year (YoY) increase in consolidated revenue for the March 2025 quarter, driven by a strong uptick in wedding-related demand and aggressive retail expansion. However, investors reacted cautiously, sending the stock down to ₹470 apiece on the NSE by 10:55 am.
So, why did the stock fall despite such robust numbers? Let’s break it down.
Q4FY25 Business Highlights: Solid Growth but Mixed Sentiments
Kalyan Jewellers’ India operations witnessed a stellar 39% YoY revenue growth, a clear sign of growing consumer appetite for gold jewellery, especially in the wedding season. The same-store sales growth (SSSG) stood at 21%, indicating that the company is not only expanding but also getting more out of its existing outlets.
During the quarter, the company launched 25 new showrooms across India, with three more opened in the first week of April. The expansion aligns with Kalyan’s aggressive growth strategy aimed at increasing market penetration, especially in non-southern regions.
In the Middle East, Kalyan recorded a 24% revenue growth, accounting for approximately 12% of consolidated revenue, fueled by strong same-store sales. However, not all segments fared equally well.
Its digital-first brand, Candere, reported a 22% drop in revenue YoY, despite opening 14 new showrooms in Q4. This underperformance has raised concerns about the scalability of the online jewellery business in the current market climate.
Strategic Plans for FY26: Massive Expansion on the Cards
Kalyan Jewellers has laid out an ambitious plan for FY26, with intentions to launch 170 new outlets:
- 75 franchise-owned company-operated (FOCO) showrooms in non-southern India
- 15 FOCO showrooms in southern India and international markets
- 80 new Candere outlets across India
The company has already signed letters of intent for these outlets, underlining its confidence in the jewellery retail space’s long-term growth potential.
Additionally, advance bookings for Akshaya Tritiya and the wedding season are showing encouraging trends, which Kalyan believes will drive strong performance in Q1FY26.
Kalyan Jewellers Financial Snapshot
| Metric | Value |
|---|---|
| Market Capitalization | ₹48,534 Cr |
| Current Share Price | ₹471 |
| 52-Week High / Low | ₹795 / ₹336 |
| Stock P/E | 73.0 |
| Industry P/E | 33.5 |
| Book Value | ₹42.3 |
| Price to Book Value | 11.1 |
| Dividend Yield | 0.26% |
| ROCE (Return on Capital Employed) | 14.0% |
| ROE (Return on Equity) | 15.2% |
| ROIC | 10.8% |
| EPS (Earnings Per Share) | ₹6.45 |
| Expected Qtr EPS | ₹2.12 |
| Face Value | ₹10 |
| Promoter Holding | 62.8% |
| Pledged Shares | 19.3% |
| Debt | ₹4,550 Cr |
| Debt to Equity | 1.04 |
| Free Cash Flow (3 Years) | ₹2,061 Cr |
| Free Cash Flow (5 Years) | ₹2,855 Cr |
| Current RSI | 53.2 |
| 200-Day Moving Average (DMA) | ₹546 |
| Graham Number | ₹78.3 |
| Intrinsic Value | ₹120 |
| PEG Ratio | 0.42 |
What Led to the Share Price Dip?
Despite the positive revenue numbers and expansion plans, the market seems cautious. Here are some possible reasons:
- High Valuation: With a P/E of 73.0, Kalyan is trading at a significant premium compared to the industry average of 33.5. This raises concerns about whether the growth justifies the price.
- Digital Segment Concerns: The 22% YoY drop in Candere’s revenue may be seen as a red flag, especially as the company aims to expand this segment aggressively.
- Debt Levels: Kalyan’s debt stands at ₹4,550 Cr with a debt-to-equity ratio of 1.04, which may be considered high in a rising interest rate environment.
- Technical Pressure: The current price is below its 200 DMA of ₹546, indicating bearish undertones from a technical standpoint.
Conclusion
While Kalyan Jewellers continues to deliver on its growth trajectory with solid numbers and a massive expansion blueprint, the stock’s recent fall indicates that investors may be seeking more clarity on profitability, valuation, and performance of its digital brand. Long-term prospects remain optimistic, but short-term sentiment appears mixed.
FAQs – Quick Q&A for Easy Understanding
Q1: Why did Kalyan Jewellers’ share price fall despite 37% revenue growth?
A: Investors may be cautious due to high valuation, underperformance in the Candere segment, and rising debt levels.
Q2: How much did the India business grow in Q4FY25?
A: Revenue from India operations grew by 39% YoY, driven by wedding demand and showroom expansion.
Q3: What is the revenue contribution from the Middle East?
A: The Middle East accounted for around 12% of Kalyan’s total revenue and grew 24% YoY.
Q4: Why is Candere a concern for investors?
A: Despite being a digital-first brand, Candere’s revenue fell by 22% YoY, raising questions about its growth sustainability.
Q5: What are the expansion plans for FY26?
A: Kalyan plans to open 170 new showrooms – 75 FOCO in non-south India, 15 in south/international, and 80 Candere outlets.
Q6: Is Kalyan Jewellers overvalued?
A: With a stock P/E of 73.0 against an industry P/E of 33.5, many believe the stock is priced for perfection.
Q7: What is the outlook for Q1FY26?
A: Positive. The company sees strong demand ahead of Akshaya Tritiya and the festive wedding season.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.