Kalyan Jewellers Share Price Falls 34% in 10 Sessions: What’s Next for Investors?

Kalyan Jewellers has been on a significant losing streak, with its share price declining over 34% in just 10 trading sessions. On January 16, 2025, the stock tumbled by more than 5%, extending its downward trajectory. The decline has occurred despite the company’s impressive Q3FY25 revenue growth, raising questions about the factors driving investor sentiment.

Q3FY25: Strong Revenue Growth Across Markets

In its business update for Q3FY25, Kalyan Jewellers reported robust consolidated revenue growth of approximately 39% compared to the same period in the previous financial year.

India Operations: A Festive Boost

• Revenue growth in India surged by approximately 41%, driven by strong festive and wedding demand.
• Same-store sales grew by an impressive 24%.
• The company launched 24 new showrooms in India during the quarter, with more openings planned in the coming months.

Middle East Performance: Consistent Growth

• Revenue growth in the Middle East stood at 22% year-on-year.
• The region contributed ~11% to the consolidated revenue, showcasing its steady performance.

International Expansion: Entry into the US Market

• Kalyan Jewellers launched its first showroom in the United States, following a Company Owned Company Operated (COCO) model.

Digital Platform: Candere’s Exceptional Growth

• The company’s digital-first jewellery platform, Candere, recorded revenue growth of 89%.
• During Q3FY25, 23 new Candere showrooms were launched, further strengthening its digital and physical presence.

Addressing Allegations: Management’s Clarifications

Despite strong operational performance, the company has been plagued by allegations, including inventory overvaluation, income tax raids, and bribery of money managers to buy shares.

During an analyst call on January 14, 2025, Executive Director Ramesh Kalyanaraman addressed these concerns:

• No Aircraft Purchase Plans: Dismissing speculation, he clarified that the company has no plans to purchase an aircraft and currently holds a helicopter on its books.
• No Income Tax Raids: Kalyanaraman denied reports of income tax raids, reaffirming the company’s commitment to operational transparency.
• Inventory Valuation Integrity: He refuted claims of inventory overvaluation, stating that the company adheres to stringent standards.

Market Reaction: Investor Confidence Wanes

The strong operational updates have been overshadowed by these allegations, leading to a sharp fall in the company’s share price. The stock has declined for 9 out of the last 10 trading sessions, reflecting waning investor confidence amidst the ongoing controversy.

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