Why is Khazanchi Jewell falling/rising?

Consistent Gains Amid Market Volatility

Khazanchi Jewellers has demonstrated notable resilience and growth over recent periods. The stock has appreciated by 1.84% in the past week, contrasting with the Sensex’s decline of 0.63% during the same timeframe. Over the last month, the company’s shares surged 9.43%, significantly outpacing the Sensex’s 2.27% gain. Year-to-date, the stock has delivered an impressive 19.94% return, more than double the benchmark’s 8.91%. Even on a one-year horizon, Khazanchi Jewellers has outperformed the Sensex by delivering a 14.26% return against the index’s 4.15% rise.

Today’s price action further underscores this strength, with the stock outperforming its sector by 2.27%. It has also recorded gains for four consecutive days, accumulating a 2.13% return in this period. The share price is trading comfortably above all key moving averages, including the 5-day, 20-day, 50-day, 100-day, and 200-day averages, signalling sustained bullish momentum.

Strong Financials Driving Investor Confidence

The rise in Khazanchi Jewellers’ stock price is underpinned by its outstanding financial performance. The company has demonstrated a strong ability to service its debt, with a low Debt to EBITDA ratio of 1.14 times, indicating prudent financial management and reduced leverage risk. This financial discipline supports investor confidence in the company’s long-term stability.

Growth metrics are particularly impressive. Net sales have expanded at an annual rate of 90.30%, while operating profit has surged by 105.40%. Net profit growth of 55.45% further highlights the company’s operational efficiency and profitability. The company’s recent quarterly results, declared in September 2025, were exceptional. Profit before tax excluding other income reached ₹31.20 crores, growing 83.8% compared to the previous four-quarter average. Profit after tax stood at ₹23.55 crores, an 85.3% increase over the same period, while PBDIT hit a record ₹32.31 crores.

These robust earnings have translated into market-beating returns. Over the past year, Khazanchi Jewellers has generated a 14.26% return, significantly outperforming the broader BSE500 index, which returned just 0.62% in the same period. This strong performance has likely attracted investor interest, contributing to the stock’s recent price appreciation.

Valuation and Risks to Consider

Despite the positive momentum, investors should be mindful of valuation concerns. The company’s return on capital employed (ROCE) stands at 20%, but it carries a relatively expensive valuation with an enterprise value to capital employed ratio of 6. While profits have risen by 64% over the past year, the price-to-earnings-to-growth (PEG) ratio is 0.6, suggesting the stock may still offer value relative to its earnings growth.

Another point of caution is the limited participation from domestic mutual funds, which currently hold no stake in the company. Given their capacity for detailed research and due diligence, this absence may indicate reservations about the stock’s price or business fundamentals. Additionally, investor participation has shown signs of decline, with delivery volumes falling by 7.41% against the five-day average as of 05 Dec, which could temper short-term liquidity and trading activity.

Overall, Khazanchi Jewellers’ recent price rise is supported by strong financial results, consistent earnings growth, and market outperformance. However, valuation metrics and limited institutional interest suggest investors should weigh these factors carefully when considering exposure to the stock.

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