Kalyan Jewellers India shares jump 18% to hit 52-week high; here's why

Shares of Kalyan Jewellers India rose sharply on Friday, extending their gains for the second straight session on the back of large block deals. The stock today soared 18.11 per cent to hit its 52-week high of Rs 135. It eventually settled 15.18 per cent higher at Rs 131.65. Around 35.17 lakh shares changed hands today on BSE, which was nearly nine times higher compared to the two-week average volume of 3.94 lakh shares. Turnover on the counter stood at Rs 44.66 crore, commanding a market capitalisation (m-cap) of Rs 13,560.65 crore.

At today's high price of Rs 135, the stock has gained 144.34 per cent from its one-year low of Rs 55.25, a level seen on June 21, 2022.

"The sharp upward move in the share price came due to large block deals. Kalyan Jewellers plans to open 52 new FOCO (Franchise owned company-operated) stores this year. The long-term outlook is positive as it would increase margins by reducing debt. The company would become a dominant player in the pan-India jewellers market soon," said AK Prabhakar, Head of Capital, IDBI Capital.

Separately, the company has reappointed TS Anantharaman as a non-executive independent director. His present term would end on December 14, 2023.

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On technical setup, the stock was last seen trading higher than the 5-day, 20-, 50-, 100- and 200-day moving averages. The counter's 14-day relative strength index (RSI) came at 77.69. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-earnings (P/E) ratio of 30.20. It has a price-to-book (P/B) value of 3.21.

"As far as levels go, the zone of Rs 115-110 is likely to provide support in case of any blip and the zone of Rs 130-135 around its all-time high is a strong resistance breaching which the stock is likely to continue moving higher," said Osho Krishan, Senior Analyst, Technical & Derivative Research at Angel One.

"Kalyan Jewellers is bullish but also overbought and now has strong resistance at Rs 130 on the daily charts. A daily close below the support of Rs 119 today could pave the way for a target of Rs 106 in the near term," said AR Ramachandran from Tips2trades.

The scrip has an average target price of Rs 160, Trendlyne data showed, suggesting a potential upside of 27.29 per cent. It has a one-year beta of 1.11, indicating high volatility on the counter.

Kalyan Jewellers India reported a 3.11 per cent fall in its consolidated net profit at Rs 697.99 crore in Q4 FY23 (March 2023 quarter) as against a net profit of Rs 720.40 crore in the same period a year ago.

Total income climbed to Rs 3,396.42 crore during Q4 FY23 from Rs 2,868.52 crore in the year-ago period, but expenses remained higher at Rs 3,268.47 crore as against Rs 2,772.64 crore in the said period.

However, in the last fiscal, consolidated profit almost doubled to Rs 431.93 crore compared to Rs 224.03 crore in the previous financial year. Total income climbed to Rs 14,109.33 crore in the 2022-23 fiscal from Rs 10,856.22 crore in the previous year.

Meanwhile, Indian equity benchmarks settled at their respective closing high levels, taking cues from the global markets. The domestic indices rose today led by gains in banks, financials, pharma and consumer stocks.

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