Thu Jan 16 16:02:39 UTC 2025: **Kalyan Jewellers Stock Plunges Amidst Rumours and Despite Strong Q3 Results**

**Mumbai, India –** Kalyan Jewellers, a leading Indian jewellery retailer, has seen its share price plummet by over 30% in the last three months, falling from ₹795 to ₹525. The decline comes despite strong third-quarter results showing a 39% year-over-year revenue growth and a 24% increase in same-store sales.

The recent drop has been fueled by swirling rumours of bribery involving fund managers and allegations of inflated inventory, income tax raids, and plans to purchase an aircraft. These claims have been vehemently denied by Kalyan Jewellers’ executive director, Ramesh Kalyanaraman, during an analyst call this week. Kalyanaraman clarified that the promoter share pledging was for the acquisition of shares from Warburg Pincus and that the company has no plans to buy an aircraft, reiterating its commitment to operational transparency.

Despite the negative press, Kalyan Jewellers reported robust growth in its India business (41% YoY revenue increase) driven by strong festive and wedding demand. The company also expanded its retail footprint by opening 24 new showrooms in India during the October-December 2024 period. The company is projecting continued growth in FY25, with plans to open 80 new stores and reduce debt.

However, analysts note that Kalyan Jewellers’ operating and net profit margins remain significantly lower than its competitor, Titan. While the company’s expansion and debt reduction efforts are positive, its profitability needs to improve to justify its current valuation. The report notes that jewellery retailing is inherently a low-margin business.

The recent market correction could also be partly attributed to broader market sentiment and rising interest rates, which can impact consumer spending on discretionary items like jewellery. However, potential future interest rate cuts by the Reserve Bank of India (RBI) could provide a boost to consumer purchasing power and benefit Kalyan Jewellers.

Equitymaster, a financial research firm, emphasizes the importance of thorough due diligence before investing in any stock, particularly in the context of the recent volatility surrounding Kalyan Jewellers. The article does not constitute financial advice.

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