Image credit: Kalyan Jewellers
Shares of Kalyan Jewellers India Ltd have witnessed a sharp decline, shedding 37% from their all-time high of ₹794.60 recorded earlier this month. On Friday, the stock plummeted 6.63%, hitting an intraday low of ₹503.25. This dramatic drop has raised concerns among investors, as the company denies allegations of IT raids and bribery rumors.
What’s Causing the Decline?
Several factors have contributed to the fall in Kalyan Jewellers' share price.
Market Rumors and Sentiment
The decline started after unverified reports of IT raids and alleged bribery involving fund managers surfaced. Kalyan Jewellers swiftly addressed these claims, calling them "absurd" and denying any such events.
Profit-Taking at High Levels
The stock had surged to a record high at the beginning of 2025, prompting many investors to book profits. This selling pressure has exacerbated the downward trend.
Technical Weakness
Kalyan Jewellers' shares are currently trading below key simple moving averages (SMAs), including the 5-day, 10-day, and 50-day levels. This indicates a bearish momentum, with the Relative Strength Index (RSI) at 21.75, marking the stock as oversold.
Company's Response to Allegations
In an earnings call on January 14, Ramesh Kalyanaraman, Executive Director at Kalyan Jewellers, dismissed the rumors of IT raids and bribery:
"Very absurd allegation. We have always conducted our business with high integrity and transparency."
He further emphasized the company’s strong financial standing, noting:
Debt reduction of ₹450 crore over the past 18 months.
Dividend payouts totaling ₹170 crore.
Additionally, Kalyanaraman clarified that the company owns only a helicopter and has no plans to purchase an aircraft.
What’s Next for Investors?
Despite recent setbacks, Kalyan Jewellers' strong fundamentals may provide a silver lining for long-term investors. However, in the short term, caution is advised.
Short-Term Outlook
Technical indicators suggest continued weakness, and market rumors may persist until the company’s Q3 FY25 results, scheduled for January 30, provide further clarity.
Long-Term Potential
The company’s efforts to reduce debt, coupled with its focus on operational transparency, position it well for sustained growth. Investors should closely monitor quarterly results and broader market conditions.
Conclusion
Kalyan Jewellers’ recent stock performance reflects a combination of profit-booking, technical weakness, and market rumors. While the company has denied allegations and emphasized its financial health, market sentiment remains cautious. Investors are encouraged to consult financial advisors and stay informed before making investment decisions.
Disclaimer: This article is for informational purposes only. Please consult a financial advisor for tailored investment advice.