Shares of Kalyan Jewellers India shot up 12.6 percent on Friday’s early trades to hit the day’s high of ₹ 128.60 apiece on the back of multiple block deals on the counter. At 12:31 PM, its shares were trading at ₹ 126.10 apiece, up 10.42percent on the National Stock Exchange (NSE).
About 6.41 crore shares or 6.2 percent of equity changed hands on the NSE in pre-market block trades, according to a report by Bloomberg. The names of the buyers and sellers were not known immediately.
In another development, the company on Thursday informed the exchanges about the reappointment of TS Anantharaman as the Non–Executive Independent Director for a term of 3 years with effect from December 15, subject to shareholder approval. He is admitted as an associate member of the Chartered Management Institute, a fellow of the Institute of Chartered Accountants of India and holds a Bachelor of Commerce from the University of Kerala.
Kalyan Jewellers is one of the largest jewellery retailers in India, along with a presence in the Middle East, with 182 showrooms and retail area exceeding 6,11,000 sqft. It offers an array of traditional and contemporary jewellery designs in gold, diamonds and precious stones catering to the requirements of its customers.
On a consolidated basis, the jeweller reported a revenue of ₹ 14,071 crore in FY23, against ₹ 10,818 crore in the previous year, indicating a growth of over 30 percent. Its profit after tax (PAT) came in at ₹ 423 crores in FY23, in spite of a one-time exceptional pre-tax write-off of Rs 33 crore relating to the divestment of certain non-core assets.
Experts say that the company is likely to report similar growth in the medium term supported by growing demand due to festive and wedding seasons, the addition of new showrooms under the franchisee model and a continued uptick in demand for retail jewellery.
Kalyan Jewellers is a small-cap stock with a market capitalization of ₹ 11,763 crores. It has a low return on equity of 12.79 percent and a slightly high debt-to-equity ratio of 1.18. Its shares were trading at a price-to-earnings ratio of 27.19 which is higher than the industry average of 23.69, indicating that the stock might be overvalued as compared to its peers.
The company’s promoters hold a 60.55 percent stake in it followed by foreign institutions with 29.65 percent, retail investors with 7.80 percent and mutual funds with 2.00 percent.
Written by Simran Bafna
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