Kalyan Jewellers shares crater 14% to Rs 389 in ninth straight fall, as gold prices and institutional selling outweigh Q3 beat.
Kalyan Jewellers’ stock continued its slide on Wednesday, sinking 14% during the session to Rs 389.1, as selling pressure showed no signs of easing, despite a strong showing in the December quarter. The jewellery retailer reported a 42% jump in revenue to Rs 7,318 crore, helped by robust festive demand and solid same-store sales growth. However, the results failed to shift the prevailing risk narrative dominating the stock.
Heavy foreign investor outflows and record-high gold prices have weighed on sentiment, raising worries about profitability. Global uncertainty, including geopolitical tensions and tariff concerns, has also pushed investors into a risk-averse mode, dragging the stock below key technical levels.
Technical Breakdown Fuels Panic Selling
The selling momentum picked up as the stock generated a bearish technical pattern with highly unusual volumes, which accelerated selling as automated trades and stop-loss unwinding kicked in. The stock is down a sharp 37% year to date, significantly underperforming its peers.
Rising gold prices have added to the pressure by compressing margins as well as pushing up the cost of inventory, at a time when the boost from festive sales is now waning. Further, investor sentiment has also been dented by the fact that the promoters have increased the number of shares pledged for the Warburg deal, whereas major institutional investors have reduced their holdings.
On the charts, the trend remains clearly negative, with all key moving averages pointing lower. Although the stock looks oversold and could attempt a short-term bounce, the broader momentum is still weak, and support around Rs 380-390 is now under close watch.
Institutional Exodus Ignores Q3 Strength
Foreign investors continued to pull money out of the market in January, selling shares worth nearly Rs 33,000 crore. Mutual funds also trimmed their positions, even though the company reported strong performance in India and healthy profit margins. In contrast, retail investors kept buying, but tightening liquidity has made the environment more challenging.
Analysts remain unconvinced that the worst is over. Aakash Shah of Choice believes the stock is unlikely to see a quick recovery and has advised investors to step aside or wait for a sharper correction. The broader consumer discretionary sector has also struggled, with the index down around 5%.
Although the company’s latest quarterly update showed signs of expansion, many analysts say the stock’s rich valuation leaves little room for error and fails to adequately reflect the risks ahead.
Sector Headwinds and Recovery Outlook
Jewellers are under pressure as gold prices swing sharply and competition heats up after the festive rush. Some investors are watching the Rs 350 level as a possible entry point, but only if the stock shows clear signs of stabilising. For now, volatility remains high, especially with tariff concerns adding to uncertainty.
While long-term growth prospects still attract buyers despite declines, the near-term outlook remains difficult, and the sector may continue to face turbulence in the coming weeks.
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