Kalyan Jewellers Stock Under Pressure: Unpacking the 52-Week Low
The year 2026 has begun on a challenging note for Kalyan Jewellers, with its stock performance raising eyebrows among investors and market analysts. The company's shares have experienced a significant downturn, sliding to a 52-week low and underperforming key peers in the competitive jewellery sector.
A Steep Decline Amidst Sector Volatility
Kalyan Jewellers' stock has witnessed a 17.5% decline year-to-date, a stark contrast to the performance of several industry counterparts. On a recent trading day, the stock plunged approximately 12%, settling at a concerning low of around ₹390. This downward trajectory places the company in a distinct position, as many peers have managed to post gains or experience only marginal losses during the same period.
For context, while Kalyan struggles, other jewellers show varied performances. PC Jeweller and Thangamayil Jewellery have actually seen appreciable gains, rising 11.2% and 16.4% respectively in the 2026 calendar year. Meanwhile, PN Gadgil is down 9.6%, and Senco Gold has slipped 2%. Titan Company, a major player, remains marginally up by 1%.
Institutional Selling and Promoter Pledging: Key Pressure Points
Market sources indicate that the recent sell-off is closely tied to institutional selling pressure, particularly from mutual funds. Data reveals notable shifts in shareholding patterns. For instance, Motilal Oswal Midcap Fund increased its stake to 9.04% by the December quarter end, up from 7.5% in June. Conversely, the Government of Singapore's holding decreased to 1.75% from 2.15%, and Sundaram Midcap Fund, which previously held a 1% stake, is no longer listed among significant holders as of December.
Adding to the concerns is the increase in promoter share pledging. Recent disclosures show that pledged shares now constitute 15.62% of the company's total share capital, representing nearly a quarter of the promoter's stake. This substantial pledge, valued at over ₹8,500 crore, has been linked by insiders to compliance with existing loan requirements, yet it contributes to investor apprehension regarding financial leverage and stability.
Strong Fundamentals vs. Market Sentiment
Despite the stock's poor performance, the company's operational and financial fundamentals appear robust. Kalyan Jewellers reported impressive growth in its Q3 FY26 update, with India operations seeing revenue surge around 42% year-on-year, fueled by strong festive demand. Sales remained healthy post-Diwali, demonstrating resilience against gold price volatility. Growth was broad-based across both plain gold and studded jewellery categories.
The quarter also showcased a healthy same-store sales growth of approximately 27%, and international operations recorded a 36% y-o-y revenue increase. Expansion efforts continued aggressively, with 21 new Kalyan showrooms launched in India, one in the UK, and 14 Candere showrooms in India during the December quarter.
Analyst Perspectives and Valuation Metrics
Financial experts offer a nuanced view. Sunny Agrawal, Head of Fundamental Research at SBI Securities, suggests the selloff may stem from mutual fund portfolio reshuffling and an oversupply of shares in the market. He emphasizes that the stock is trading at a reasonable valuation, with a forward price-to-earnings multiple of 28 times for FY27 and projected earnings growth exceeding 20%. The primary risk identified is potential demand postponement due to soaring gold prices, a challenge jewellers are addressing by promoting lower-carat products.
Comparing valuations, PN Gadgil trades at a current PE of 32.2 times, Senco Gold at 30.9 times, and Titan at a premium 87.7 times. Kalyan's valuation appears relatively moderate within this spectrum.
Future Outlook and Brokerage Confidence
Looking ahead, brokerages maintain a generally positive stance on Kalyan Jewellers' long-term prospects. ICICI Securities, in a recent report, forecasts strong compounded annual growth rates of 26% for revenue, 24% for EBITDA, and 33% for PAT over FY25-28. The brokerage has upheld a 'buy' rating with a target price of ₹670 per share, significantly above current levels.
The company's Q2 FY26 performance further underscores its strength, with consolidated revenue climbing 30% y-o-y to ₹7,856 crore and profit after tax more than doubling to ₹260.5 crore. Centrum Broking noted clarity on debt-reduction plans and progress in regional branding strategies.
However, analysts caution about risks, including possible delays in showroom expansion and intensifying competition in core South Indian markets. The company is scheduled to announce its December quarter results on 6 February, which will provide further insights into its operational health and future trajectory.
In summary, while Kalyan Jewellers faces short-term headwinds from institutional selling and promoter actions, its underlying business performance, expansion strategy, and analyst confidence suggest a complex narrative beyond the immediate stock price crash. Investors are advised to weigh the strong fundamental growth against the prevailing market volatility and sentiment-driven pressures.
