Kalyan Jewellers Share Price Drops Sharply Despite Strong Q1 Results

Kalyan Jewellers Share Price Drops Sharply Despite Strong Q1 Results

Intraday Fall Amid Stellar Q1 Performance

On August 8, 2025, Kalyan Jewellers' share price plummeted over 9%, hitting an intraday low of approximately ₹535 on BSE, despite showcasing strong financial performance for Q1 FY26. The company reported a robust 49% year-on-year rise in consolidated net profit (PAT) to ₹264 crore, alongside a 31% surge in revenue to ₹7,268 crore.

What Triggered the Market Slide?

The drop is widely attributed to a compression in gross margins, which fell to 13.6–13.9%—down from previous levels—due to the growing contribution from franchised stores.

Brokerages Maintain Bullish Outlook

Despite the sharp decline, brokerages remain upbeat:

• JM Financial has initiated coverage with a Buy rating and a ₹700 target, citing store expansion, favorable structural trends, and the shift toward formalized retail.

• Motilal Oswal and Citi also reaffirm Buy ratings with similar ₹700 targets, noting long-term growth potential despite near-term margin pressure.

Jewellery Stocks Shine Despite Commodity Headwinds

Kalyan Jewellers is riding a broader rally in the jewellery sector. FY26 year-to-date returns for leading jewellery stocks, including Kalyan, span 10% to 45%, underscoring investor confidence even amid cooling gold prices.

Quick Summary at a Glance

Metric- Details

Q1 FY26 PAT YoY Growth +49% (₹264 Cr)

Revenue YoY Growth +31% (₹7,268 Cr)

Gross Margin Down to ~13.6–13.9%

Intraday Share Drop –9% (around ₹535)

Broker Target Price ₹700 (Buy ratings from multiple brokerages)

Sector Performance Jewellery stocks up 10–45% in FY26

Kalyan Jewellers has delivered an impressive Q1 performance adorned with strong revenue and profit growth. However, investor sentiment turned cautious due to margin contraction from its franchised footprint. Yet, the broader industry backdrop—shifting toward organized retail and buoyed gold demand—continues to favor a bullish long-term outlook. With multiple brokerages placing the target price at ₹700, the current dip might present a strategic entry point for long-term investors.