RBZ Jewellers Ltd Downgraded to Sell Amid Technical Weakness and Underperformance

Quality Assessment: Mixed Signals Amid Growth

RBZ Jewellers has demonstrated robust financial growth in recent quarters, particularly in Q2 FY25-26. The company reported a net profit (PAT) of ₹18.56 crores for the quarter, marking an impressive 101.5% increase compared to the previous four-quarter average. Net sales for the nine months ended December 2025 stood at ₹357.95 crores, growing at a healthy annual rate of 25.5%. Operating profit margins have also expanded, with operating profit to interest coverage reaching a strong 11.06 times, signalling operational efficiency and manageable debt servicing costs.

However, despite these encouraging financial metrics, the overall quality grade remains under pressure. The company’s Mojo Score stands at 43.0, categorised as a Sell, down from a previous Hold rating. This reflects concerns about the company’s market positioning and investor confidence. Notably, domestic mutual funds hold no stake in RBZ Jewellers, which is unusual for a company of its size and sector. This absence of institutional backing suggests a lack of conviction among professional investors, possibly due to concerns over valuation or business fundamentals.

Valuation: Underwhelming Relative to Market and Peers

Valuation metrics for RBZ Jewellers have come under scrutiny as the stock price has declined from a 52-week high of ₹221.50 to ₹133.00 as of the latest close, a drop of nearly 40%. The stock’s recent trading range, with a low of ₹107.55 over the past year, indicates significant volatility and downward pressure. The current market capitalisation grade is rated 4, reflecting a mid-sized company with limited liquidity and market interest.

Comparatively, the stock has underperformed key benchmarks such as the Sensex and BSE500 indices. Over the past year, RBZ Jewellers has delivered a negative return of -23.3%, while the Sensex gained 7.88%. Even over shorter periods, the stock’s returns lag behind; it fell 5.17% in the last week against a Sensex gain of 0.31%, and declined 4.28% over the last month compared to a 2.51% drop in the Sensex. This persistent underperformance raises questions about the stock’s valuation attractiveness and growth prospects relative to peers in the Gems and Jewellery sector.

Financial Trend: Positive Quarterly Results Amid Longer-Term Challenges

While RBZ Jewellers posted very positive quarterly results in Q2 FY25-26, the longer-term financial trend remains mixed. The company’s net sales have grown at a compounded annual growth rate (CAGR) of 28.10%, and operating profit has expanded at 34.42% annually, signalling strong underlying business momentum. The net profit growth of 160.67% in the recent quarter further underscores operational improvements and effective cost management.

However, these gains have not translated into sustained shareholder returns. The stock’s one-year return of -23.3% starkly contrasts with the Sensex’s 7.88% gain, and the company has underperformed the BSE500 index over the past three years and one year. This disconnect suggests that despite solid financials, market sentiment remains cautious, possibly due to concerns about competitive pressures, margin sustainability, or broader sector headwinds.

Technical Analysis: Bearish Signals Trigger Downgrade

The most significant factor driving the downgrade to Sell is the deterioration in technical indicators. RBZ Jewellers’ technical grade shifted from mildly bearish to outright bearish, reflecting a negative momentum in price action and market sentiment. Key technical metrics include:

• MACD (Moving Average Convergence Divergence): Weekly readings are bearish, indicating downward momentum in the medium term.


• RSI (Relative Strength Index): Both weekly and monthly RSI show no clear signal, but the absence of bullish momentum is notable.


• Bollinger Bands: Both weekly and monthly bands are bearish, suggesting the stock is trading near the lower band and may continue to face selling pressure.


• Moving Averages: Daily moving averages are bearish, confirming short-term downtrend.


• KST (Know Sure Thing): Weekly readings are bearish, reinforcing the negative trend.


• Dow Theory: Weekly and monthly trends remain mildly bearish, indicating a lack of sustained recovery.


• On-Balance Volume (OBV): Weekly OBV is mildly bearish, though monthly OBV shows mild bullishness, reflecting some divergence between price and volume.

The stock’s price closed at ₹133.00 on the latest trading day, down 2.06% from the previous close of ₹135.80, with intraday lows touching ₹130.80. This price action, combined with the technical indicators, signals a cautious outlook for investors.

Market Context and Sector Positioning

RBZ Jewellers operates in the Diamond & Gold Jewellery industry, a sector known for its sensitivity to economic cycles, consumer sentiment, and commodity price fluctuations. Despite the company’s strong operational metrics, the lack of institutional interest and persistent underperformance relative to benchmarks suggest that investors are wary of the stock’s near-term prospects.

Moreover, the company’s Mojo Grade of Sell, with a score of 43.0, reflects a comprehensive assessment that factors in quality, valuation, financial trends, and technicals. This downgrade from Hold signals a need for caution among investors, especially given the stock’s recent negative returns and bearish technical outlook.

Conclusion: Downgrade Reflects Caution Amid Mixed Fundamentals and Bearish Technicals

In summary, RBZ Jewellers Ltd’s downgrade from Hold to Sell is driven primarily by a shift to bearish technical indicators, persistent underperformance relative to market benchmarks, and a valuation that no longer appeals to investors. While the company’s recent financial results have been encouraging, with strong growth in net sales, operating profit, and net profit, these positives have not translated into sustained shareholder returns or institutional confidence.

Investors should weigh the company’s operational strengths against the prevailing negative technical signals and market sentiment. The absence of domestic mutual fund holdings further underscores the cautious stance of professional investors. Until there is a clear reversal in technical trends and improved market performance, the stock remains a sell-rated proposition within the Gems, Jewellery and Watches sector.

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