Kalyan Jewellers India Ltd is Rated Hold

Current Rating and Its Significance

The 'Hold' rating assigned to Kalyan Jewellers India Ltd indicates a balanced outlook for investors. It suggests that while the stock may not be an immediate buy, it is not advisable to sell at this juncture either. This rating reflects a nuanced view that considers the company’s strengths and challenges, signalling that investors should monitor the stock closely for future developments.

Quality Assessment

As of 11 February 2026, Kalyan Jewellers maintains a good quality grade. The company has demonstrated robust operational performance, highlighted by consistent growth in net sales and profitability. Over the long term, net sales have expanded at an annualised rate of 32.82%, while operating profit has grown even faster at 38.87% per annum. This sustained growth trajectory underscores the company’s ability to scale its business effectively within the competitive gems and jewellery sector.

Moreover, the company has declared positive results for 11 consecutive quarters, reflecting operational stability and resilience. The latest quarterly figures show net sales reaching a record ₹10,343.42 crores and PBDIT at ₹750.48 crores, both all-time highs. These metrics reinforce the company’s strong market position and operational efficiency.

Valuation Considerations

Despite the strong fundamentals, the stock currently carries an expensive valuation grade. The company’s return on capital employed (ROCE) stands at 14.7%, which is respectable but comes with a valuation multiple that investors should scrutinise. The enterprise value to capital employed ratio is 5, indicating that the market prices the company at a premium relative to its capital base.

However, it is important to note that Kalyan Jewellers is trading at a discount compared to its peers’ historical valuations, suggesting some relative value remains. The price-to-earnings-to-growth (PEG) ratio is 0.5, which is generally considered attractive, signalling that earnings growth is not fully reflected in the current share price. This valuation nuance is a key factor in the 'Hold' rating, as it tempers enthusiasm with caution.

Financial Trend and Profitability

The company’s financial trend is very positive as of 11 February 2026. Net profit has surged by 59.8%, reflecting strong bottom-line growth. This is supported by a healthy operating profit to interest coverage ratio of 7.19 times, indicating robust earnings relative to debt servicing costs. Such financial strength reduces risk and provides a cushion against market volatility.

Institutional investors hold a significant stake of 29.33%, and their holdings have increased by 0.64% over the previous quarter. This growing institutional interest often signals confidence in the company’s fundamentals and future prospects, which can be reassuring for retail investors.

Technical Outlook

From a technical perspective, the stock currently exhibits a bearish grade. Price performance over various time frames has been mixed to negative. As of 11 February 2026, the stock has declined by 1.27% on the day, with a one-month return of -15.49% and a six-month return of -20.16%. Year-to-date, the stock is down 11.75%, and over the past year, it has underperformed the broader market, delivering a negative return of -17.63% compared to the BSE500’s positive 10.69% return.

This underperformance despite strong fundamentals suggests that market sentiment and technical factors are currently weighing on the stock. Investors should be mindful of this divergence when considering entry or exit points.

Summary for Investors

In summary, Kalyan Jewellers India Ltd’s 'Hold' rating reflects a company with solid quality and very positive financial trends but tempered by expensive valuation and bearish technical signals. The stock’s recent underperformance relative to the market highlights the importance of cautious optimism. Investors may consider maintaining their current positions while monitoring valuation levels and technical indicators for signs of a more favourable entry point.

Market Context and Outlook

The gems, jewellery, and watches sector remains competitive, with consumer demand influenced by economic cycles and discretionary spending patterns. Kalyan Jewellers’ strong sales growth and profitability demonstrate its ability to navigate these dynamics effectively. However, the premium valuation and technical weakness suggest that the stock may require further consolidation before resuming an upward trajectory.

Investor Takeaway

For investors, the 'Hold' rating on Kalyan Jewellers India Ltd suggests a wait-and-watch approach. The company’s strong fundamentals and positive financial trends provide a solid foundation, but the current valuation and technical outlook advise prudence. Investors should keep an eye on quarterly results, sector developments, and broader market conditions to reassess the stock’s potential for appreciation.

Given the stock’s underperformance relative to the market, those considering new investments may wish to look for signs of technical recovery or valuation moderation before committing fresh capital. Conversely, existing shareholders might view the current price levels as an opportunity to hold through short-term volatility, given the company’s demonstrated growth and profitability.

Performance Metrics at a Glance (As of 11 February 2026)

- 1 Day Change: -1.27%

- 1 Week Return: +10.69%

- 1 Month Return: -15.49%

- 3 Month Return: -15.86%

- 6 Month Return: -20.16%

- Year-to-Date Return: -11.75%

- 1 Year Return: -17.63%

- Net Sales (Quarterly): ₹10,343.42 crores (highest recorded)

- PBDIT (Quarterly): ₹750.48 crores (highest recorded)

- Operating Profit to Interest Coverage: 7.19 times

- ROCE: 14.7%

- Institutional Holdings: 29.33% (up 0.64% QoQ)

These figures illustrate the company’s operational strength and financial health, which underpin the current rating despite recent price weakness.

Conclusion

Kalyan Jewellers India Ltd’s 'Hold' rating by MarketsMOJO reflects a comprehensive evaluation of quality, valuation, financial trends, and technical factors. While the company exhibits strong growth and profitability, the premium valuation and bearish technical signals suggest a cautious stance for investors. Monitoring ongoing performance and market conditions will be essential for making informed investment decisions regarding this midcap player in the gems and jewellery sector.

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