The shares of the unique jewellery maker gained up to 9 percent after Motilal Oswal AMC clarified speculation about fund manager misconduct allegations.
With a market capitalization of Rs 56,233.86 crore, the shares of Kalyan Jewellers India Ltd were trading at Rs 545.00 per share, increasing around 8.64 per cent as compared to the previous closing of Rs 501.65 per share.
Reason for rise
The company’s shares have seen such a bullish movement after the fund house dismissed rumors suggesting that its money managers were bribed to invest in Kalyan Jewellers, labeling the allegations as “baseless, malicious, and defamatory.
Moreover, “We categorically deny the baseless, malicious, and defamatory allegations circulating on social media against MOAMC and its officials. These baseless accusations are a deliberate attempt by individuals with vested interests to malign the good reputation that our firm and leadership have built over decades,” Motilal Oswal AMC stated in a filing.
Recently, social media was rife with allegations suggesting that fund managers at Motilal Oswal AMC were involved in misconduct surrounding Kalyan Jewellers’ shares, including speculations that the fund house had terminated a few managers over the issue.
Financial performance
Examine the company’s financial condition, revenue jumped by 37 percent from Rs 4,415 crore in Q2FY24 to Rs 6,065 crore in Q2FY25, and during the same time frame, net profit shrunk by 4 percent from Rs 135 crore to Rs 130 crore.
Growth Strategy
The company’s growth strategy includes launching 49 Kalyan and 34 Candere showrooms in India, targeting 80 Kalyan and 50 Candere showrooms by FY25. The first U.S. showroom is delayed but expected this quarter. It operates 288 global stores, including 252 in India.
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Market Dynamics
The company reported strong Store Sales Growth (SSG) exceeding 20% during the 30 days leading up to Diwali compared to the base year and anticipates robust demand driven by the ongoing wedding season, highlighting a positive growth outlook.
Margin Insights
The company reported slightly higher YoY gross and PBT margins at the showroom level. Franchisee revenue share is 32-33%, not 50% as assumed. Despite more franchisees, gross margins remain stable with a 30% studded share. A ₹70 crore customs duty write-off impacted results, with ₹50 crore inventory adjustments expected in Q3.
International Expansion
The company is expanding internationally, with four FOCO stores in the Middle East and plans to accelerate growth. It aims to establish 25-30 showrooms across the U.S. and U.K., focusing on catering to the Indian diaspora in these and other international markets.
Management components
Management is optimistic about strong revenue growth, successful new store openings, and sustained demand in key segments. They anticipate a robust finish to the calendar year, fueled by the wedding season and festive demand, further strengthening their performance in the coming months.
Company Overview
Kalyan Jewellers India Limited is an India-based jewelry retailer, which is engaged in offering gold, diamond, pearl, white gold, gemstone, platinum, and silver jewelry products. The company’s brand includes Mudhra, Anokhi, Rang, Vedha, Tejasvi, Apoorva, Ziah, Laya and Glo.
Written by Abhishek Singh
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