Gold stocks have regained their footing in recent months, helped by an increase in gold sales on the back of strong festive and wedding demand coupled with the fall in gold prices amid aggressive rate hikes from the US Federal Reserve.
So far this year, the demand for gold has skyrocketed in India as people celebrated major festivals after nearly two years of muted celebrations due to the pandemic. The sales also stood strong in the most recent Dhanteras and Akshaya Tritiya, despite a rise in the gold price.
As gold sales climbed, stocks in the sector also shined. Shares of Kalyan Jewellers began their upward journey around Rs. 55.85 apiece in June this year and surged 135.98 percent to hit an all-time high of Rs. 131.8 on December 20.
At current levels, the stock is up 35.74 percent in a month.
The stock, which made its debut on the exchanges in March 2021, was listed poorly at a discount of about 15 percent at ₹73.9 apiece as against an issue price of ₹87. It finished the first day lower by 13.4 percent at ₹75.3.
The stock regained some buying momentum and rose to ₹89.75 in three months to June. But since then, the stock experienced a downtrend, and it continued on the same path until June of this year.
Nearly 15 months later, on September 14, 2022, the stock began to trade above its issue price.
On the technical side, the stock is trading 55.22 percent above its 200-day moving average and 14.48 percent above its 50-day moving average.
The company has strong expansion plans, as it is looking to open 52 showrooms over the next 12 months. The expansion will mainly focus on the non-South region, which currently contributes 35 percent to the Indian business, the company said in a statement.
On the global front, Kalyan Jewellers said it is witnessing positive demand momentum and buoyant customer sentiments in the Middle Eastern business, which contributes around 17 percent to its consolidated revenue.
The company is looking at initiating a pilot franchise model in the region, post which a robust expansion plan will be laid out for its international operations, it said.
For the September-ending quarter, Kalyan Jewellers posted a consolidated net profit of Rs. 106.4 crore as against a net profit of Rs. 68.8 crore in the same quarter of last fiscal year. It reported a 20.31 percent YoY rise in total revenue of ₹3,481.4 crore compared to Rs. 2,893.6 crore in the same period last year.
The company reported an EBITDA margin of 7.66 percent during the quarter, a marginal drop of nearly 27 basis points over the same quarter of last fiscal year.
Kalyan Jewellers' online jewellery platform Candere launched its first physical showroom during the quarter. Candere recorded revenue growth of more than 15 percent during the July-September period compared to the same period of the previous year.
Candere is India's first go-to online destination for all the finest jewelry. It was acquired by Kalyan Jewellers in 2017.
Recently, on December 16, Candere partnered with N7-The Nitrogen Platform, to accelerate its website and enhance the digital shopping experience for its customers, ANI reported.
Kalyan Jewellers added five new showrooms in India (all non-south) during the recent quarter, including its first physical showroom by Candere. As of September 30, 2022, Kalyan Jewellers' total number of showrooms across India and the Middle East stood at 163.