Kalyan Jewellers Q2 Earnings: Profit Decline Amid Revenue Surge

Kalyan Jewellers, a prominent player in the Indian jewellery sector, reported mixed results for the second quarter of the financial year 2024-25 (Q2 FY25). The company saw a notable dip in its net profit, which decreased by 3.3% year-on-year to ₹130 crore. 

This decline can be attributed to a one-time loss of ₹69 crore due to changes in customs duty regulations during the quarter. Despite the profit drop, Kalyan Jewellers showcased impressive revenue growth, indicating a resilient market performance.

Revenue Growth Defies Challenges

Despite the hit to profits, Kalyan Jewellers experienced robust revenue growth of 37.5%, reaching ₹6,091.5 crore compared to ₹4,427.6 crore in the same quarter of the previous year. This surge was driven by increased consumer demand, buoyed by festive season sales and a strong wedding season in India. This positive revenue growth reflects the company’s ability to navigate market volatility and capitalise on consumer sentiment despite fluctuating gold prices.

EBITDA Performance

The company’s earnings before interest, taxes, depreciation, and amortisation (EBITDA) increased by 4.3% year-on-year to ₹327.1 crore, up from ₹313.6 crore in the previous year. However, the EBITDA margin contracted by 170 basis points, settling at 5.4%. The reduction in margins signals rising operational costs and the impact of the one-time loss, which tempered overall profitability.

Half-Yearly Performance (H1 FY25)

For the first half of the fiscal year 2024-25 (H1 FY25), Kalyan Jewellers reported a net profit growth of 10.6%, amounting to ₹308 crore, up from ₹278.4 crore in H1 FY24. Total income for the period also rose by 32%, reaching ₹11,649 crore compared to ₹8,815 crore in the same period last year. 

Key Factors Impacting Performance

Several factors influenced Kalyan Jewellers’ mixed performance:

• One-Time Loss: The one-time loss of ₹69 crore due to changes in customs duty negatively impacted the net profit.
• Festive and Wedding Demand: Strong consumer demand during the festive and wedding seasons helped boost revenue, offsetting some losses.
• Market Volatility: Fluctuating gold prices continued to be challenging, affecting overall profitability and margins.

Kalyan Jewellers Share Price Performance

Following the earnings announcement, Kalyan Jewellers’ share price experienced a sharp decline of 5.4%, hitting an intraday low of ₹666.30. The stock has been volatile, reflecting investor concerns over the profit dip. 

Despite the fall, the share price remains significantly higher than its 52-week low of ₹305.20, recorded in November last year. Over the past year, the stock has surged by 109%, and it has gained 89% year-to-date in 2024. However, it is still trading 15% below its 52-week high of ₹786, reached in September 2024.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.