RBZ Jewellers Ltd Upgraded to Hold as Technicals Improve Amid Mixed Financial Trends

Technical Trends Show Signs of Stabilisation

The primary catalyst for the upgrade was a notable change in the technical grade, which moved from bearish to mildly bearish. While the weekly Moving Average Convergence Divergence (MACD) remains bearish, other technical indicators suggest a less pessimistic outlook. The Relative Strength Index (RSI) on both weekly and monthly charts currently shows no clear signal, indicating a neutral momentum phase.

Bollinger Bands on weekly and monthly timeframes have shifted to mildly bearish, reflecting reduced volatility and a potential consolidation phase. Daily moving averages also indicate a mildly bearish stance, while the KST (Know Sure Thing) indicator remains bearish on the weekly chart. Dow Theory assessments on both weekly and monthly scales have softened to mildly bearish, suggesting that the downtrend may be losing momentum.

On the positive side, the On-Balance Volume (OBV) indicator is mildly bullish on the weekly chart, signalling that buying volume is beginning to outweigh selling pressure. This technical mix supports the decision to upgrade the stock’s rating to Hold, as the risk of further sharp declines appears to be diminishing.

Valuation and Market Performance

RBZ Jewellers currently trades at ₹141.00, up 5.34% on the day, with a 52-week high of ₹221.50 and a low of ₹107.55. Despite this recent uptick, the stock has underperformed broader benchmarks over longer periods. The one-year return stands at -22.27%, significantly lagging the Sensex’s 8.49% gain over the same period. Year-to-date, the stock has managed a modest 1.15% return, outperforming the Sensex’s -1.74% decline.

Shorter-term returns show a mixed picture: a 3.98% gain over the past week versus the Sensex’s 2.30%, but a slight 0.49% loss over the past month compared to the Sensex’s 2.36% decline. The stock’s market capitalisation grade remains modest at 4, reflecting its micro-cap status within the Gems, Jewellery and Watches sector.

Robust Financial Trend Supports Upgrade

RBZ Jewellers has demonstrated very positive financial performance in the second quarter of FY25-26, which has been a key factor in the rating upgrade. Net sales have grown at an impressive annual rate of 28.10%, while operating profit has surged by 34.42%. The company’s net profit growth is even more striking, with a 160.67% increase reported in the latest quarter.

Specifically, the quarterly PAT (Profit After Tax) stood at ₹18.56 crores, representing a 101.5% increase compared to the previous four-quarter average. Net sales for the nine-month period reached ₹357.95 crores, up 25.50% year-on-year. Additionally, the operating profit to interest ratio has improved significantly, reaching a robust 11.06 times, indicating strong operational efficiency and reduced financial risk.

These financial metrics underscore the company’s healthy growth trajectory and improved profitability, justifying a more favourable investment stance despite its relatively small market capitalisation and limited institutional ownership.

Quality Assessment and Market Position

Despite the encouraging financial and technical signals, RBZ Jewellers retains a Mojo Score of 50.0 and a Mojo Grade of Hold, upgraded from a previous Sell rating as of 3 February 2026. This reflects a balanced view of the company’s quality and market position. The company operates in the Diamond & Gold Jewellery industry, a sector known for cyclical demand and sensitivity to economic conditions.

One notable concern is the absence of domestic mutual fund holdings, which remain at 0%. Given that mutual funds typically conduct thorough on-the-ground research, their lack of participation may indicate reservations about the stock’s valuation or business model. This factor tempers enthusiasm and supports a cautious Hold rating rather than a more aggressive Buy.

Long-term returns have been below par, with the stock underperforming the BSE500 index over the last three years and one year. This underperformance highlights the challenges RBZ Jewellers faces in delivering sustained shareholder value despite recent operational improvements.

Balancing Risks and Opportunities

In summary, the upgrade to Hold reflects a careful balancing of factors. The technical indicators suggest that the stock’s downtrend is moderating, with some bullish volume signals emerging. Financially, the company’s recent quarterly results have been very encouraging, with strong sales growth, profitability, and interest coverage ratios.

However, valuation concerns remain, especially given the stock’s underperformance relative to broader indices and the absence of institutional backing. The company’s small market capitalisation and sector-specific risks also warrant caution. Investors should weigh these factors carefully, recognising that while the outlook has improved, the stock is not yet positioned for a strong Buy recommendation.

For those tracking the Gems, Jewellery and Watches sector, RBZ Jewellers represents a micro-cap with potential upside if it can sustain its recent financial momentum and technical stabilisation. Nonetheless, the Hold rating advises a measured approach, favouring monitoring over aggressive accumulation at this stage.

Outlook and Market Context

Looking ahead, the company’s ability to maintain its growth trajectory and improve market sentiment will be critical. The broader sector dynamics, including gold price fluctuations and consumer demand trends, will also influence RBZ Jewellers’ performance. Investors should remain vigilant for further updates on quarterly earnings and technical developments to reassess the stock’s investment case.

Conclusion

The upgrade of RBZ Jewellers Ltd from Sell to Hold by MarketsMOJO on 3 February 2026 is a reflection of improved technical signals, robust financial results, and a more balanced valuation outlook. While challenges remain, the company’s recent performance justifies a more optimistic stance, albeit with caution. This nuanced rating change provides investors with a clearer framework to evaluate RBZ Jewellers within the competitive Gems, Jewellery and Watches sector.

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