Kalyan Jewellers shares: HSBC raises target price; stock slips on profit-booking

Shares of Kalyan Jewellers India Ltd were trading on a flat note today even as brokerage HSBC raised its target price for the jewellery stock post Q1 earnings.  The brokerage assigned a new target price of Rs 220 against the earlier target of Rs 200. The firm reported a 33% rise in Q1 net profit on Wednesday. Q1 consolidated profit of Kalyan Jewellers rose to Rs 144 crore against a net profit of Rs 108 crore in the corresponding quarter last year. Consolidated revenue from operations jumped 35.7% to Rs 4376 crore in Q1 against Rs 3333 crore in the corresponding period of the preceding fiscal.  

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The international brokerage said, "Kalyan's domestic sales were rose 34% y-o-y, aided by healthy 36% new customer growth. Its middle East sales rose 22% y-o-y.  The company's franchise-led expansion is on track. It opened 12 new showrooms in Q1 and plans to open 50-plus showrooms in FY24."

However, the stock, which rose 6.03% intraday to a fresh 52-week high of Rs 188.95 in the previous session was trading on a flat note in the afternoon session today. The stock of the jewellery chain fell nearly a percent to Rs 181 against the previous close of Rs 182.70 on BSE.  

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Market cap of the firm fell to Rs 18,643 crore on BSE. Kalyan Jewellers stock also touched an intraday low of Rs 178.35, falling 2.38% on BSE. 

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Stock of Kalyan Jewellers has gained 161% in a year and risen 44.68% in 2023. Total 2.05 lakh shares of the firm changed hands amounting to a turnover of Rs 3.72  crore on BSE.  

In terms of technicals, the relative strength index (RSI) of the stock stands at 70.3, signaling the stock is overbought. Kalyan Jewellers has a one-year beta of 1.4, indicating high volatility during the period. Kalyan Jewellers shares are trading higher than the 5 day, 10 day, 20 day, 50 day, 100 day and 200 day moving averages.

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The standalone revenue for the company (India) in Q1 rose 34% to Rs 3,641 crore as against Rs 2,719 crore in Q1 of the previous financial year. The India operations recorded a 35% rise in profit to Rs 129 crore in Q1 compared to a PAT of Rs 95 crore in the corresponding quarter of the previous year.

Revenue from the Middle East operations in the last quarter rose 22% to Rs 700 crore as against Rs 574 crore in Q1 of the previous financial year. The Middle East operations' profit climbed 24% to Rs 17 crore in Q1 compared to a PAT of Rs 14 crore in the corresponding quarter of the previous year.

Kalyan Jewellers 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. Its products include chains, rings, necklaces, earrings, bracelets, bangles, gold, white gold and platinum.