Kalyan Jewellers Shares Fall Nearly 2% On Buzz Of Possible Block Deal

Mumbai, July 27: Shares of Kalyan Jewellers fell as much as 1.7% on Monday after a report said a prominent domestic mutual fund was looking to sell around 5 crore shares through a block deal at a discount of 8-10%. The potential stake sale comes after a sharp rally in the stock, which has gained 50% over the past month, and could weigh on investor sentiment in the near term. 

According to the report, two bankers have been appointed to facilitate the transaction, although the mutual fund has not been named. 

The stock’s recent rally had been supported by positive brokerage commentary. 

The brokerages acknowledged that Kalyan Jewellers’ June-quarter consolidated revenue growth of 38% was below its estimates but retained positive long-term view, citing the company’s franchise-led expansion strategy and potential for improved return on capital employed. 

Kalyan Jewellers Reports Strong June-Quarter Business Update 

Kalyan Jewellers reported 38% year-on-year growth in India revenue in its June-quarter business update, supported by same-store sales growth of 28%. Its international business expanded around 35% from a year earlier, while operations in West Asia grew approximately 30%. 

Stock traded in the red as news of a likely block deal depressed sentiment. Source: NSE 

International markets accounted for about 14% of the company’s consolidated revenue during the quarter, underlining the contribution of its overseas operations to overall growth. 

Candere, the company’s digital-first jewellery business, was the standout performer during the quarter, with revenue surging 112% year-on-year. The company also expanded its retail footprint, adding 12 Kalyan showrooms and five Candere stores during the period. 

As of June 30, Kalyan Jewellers had a total showroom network of 524 outlets. The company said the second quarter had started on a positive note, ahead of the upcoming festive and wedding season, which is typically a key period for jewellery demand. 

Block Deal In Focus Ahead Of August 4 Earnings 

The reported stake sale is likely to remain a key near-term trigger for Kalyan Jewellers shares, particularly given the stock’s strong recent gains. A large block transaction at a discount could create temporary selling pressure, while investors will also track whether the proposed deal changes the company’s institutional ownership profile. 

The company is scheduled to report its earnings on August 4, which could provide the next major catalyst for the stock. Investors will be watching the results for further evidence of sustained same-store sales growth, expansion-led revenue momentum and the performance of Candere. 

For now, the prospect of a large mutual fund stake sale has shifted attention towards supply pressure in the stock, even as the company’s operating performance and expansion plans remain positive factors for its longer-term outlook. 

Source

• https://www.nseindia.com/get-quote/equity/KALYANKJIL/Kalyan-Jewellers-India-Limited