Why is Kalyan Jewellers Share Falling Despite Strong Q1 FY26 Results?

Kalyan Jewellers has announced an impressive Q1 FY26 performance, but the stock is witnessing correction in the market. This has left many retail investors puzzled. Let’s break down what’s really happening and whether it’s a cause for concern—or an opportunity. Q1 FY26 Highlights – Strong Business Performance Revenue: ₹5,391 crore, up 29% YoY India Revenue: ₹4,774 crore, up 29% YoY Middle East Revenue: ₹616 crore, up 28% YoY Consolidated PAT: ₹144 crore vs ₹144 crore YoY (flat) India PAT: ₹133 crore vs ₹104 crore (up 28%) Middle East PAT: ₹11 crore vs ₹40 crore (down due to restructuring and inventory shift) 🏬 Rapid Store Expansion Driving Growth Opening of 12 new Kalyan stores in Q1 (total 272 stores as of June 2025) Candere by Kalyan: 6 offline stores launched, plan for 20 by FY26-end Focus on smaller towns and regional branding like: Mudhra by Kalyan Jewellers Ziah Candere 💹 Key Operating Metrics Operating Leverage visible in India operations Better inventory planning & gold procurement helped maintain margins Online business Candere revenue: ₹39 crore (down 17% YoY) – under pressure but improving offline presence 📉 But Why is the Stock Falling? Despite strong fundamentals, the stock has corrected. Here are possible reasons: 1. Profit Booking After Strong Rally The stock had rallied significantly before the results. Many short-term investors may be booking profits. 2. Middle East PAT Dip While India operations were strong, Middle East profits dropped sharply due to internal restructuring and higher costs. This caused concern about geographical risk. 3. Candere Weakness Online jewellery sales through Candere dropped 17% YoY, which might have dampened sentiment about digital growth. 4. Flat Net Profit YoY Despite 29% revenue growth, consolidated PAT remained flat. This raises concern over margin pressure in non-India markets. 📈 Long-Term Outlook Remains Strong Brand Kalyan is strengthening its offline and regional presence. Focus on Tier-2 and Tier-3 towns is unlocking new demand. Stable gold pricing and improved procurement efficiency are long-term positives. Promoters have a clean track record and focused vision for value unlocking. ✅ Conclusion – Ignore the Noise, Focus on the Business While the market reacts to short-term fluctuations, the long-term growth story of Kalyan Jewellers remains intact. Revenue visibility, store expansion, and brand trust are solid fundamentals. If you're a long-term investor, the current dip could be a buying opportunity, not a warning sign. 🔍 Disclaimer: This article is for informational purposes only and not a recommendation to buy or sell any stock. Please consult your financial advisor before making any investment decisions.