Multibagger jewellery stock hits record high as HSBC raises price target

Shares of Kalyan Jewellers hit their record high on Thursday after global brokerage HSBC raised price target for the jewellery maker and retailer. HSBC sees an upside of 19% in the stock and believes the jeweller’s scrip is still midway into its value creation journey.

HSBC’s bullish stance for the stock comes even as the firm has clocked returns of eight times in the last two year. In a year, the jewellery stock has climbed 197%.

The brokerage has firm raised its price target to Rs 810 against the earlier Rs 600 and maintained its 'buy' stance on the jewellery stock.

The brokerage also mentioned Kalyan Jewellers' capital light expansion, which continues to expand rapidly. It believes that the jewellery maker's continued exponential growth will prevent any likely multiple de-rating.

Long-range catalysts are working for the company, with industry rival Titan's journey coming as a useful guide, said HSBC.

The stock rose 4% to a record high of Rs 683 today against the previous close of Rs 656.60 on BSE. Kalyan Jewellers stock has gained 87% since the beginning of this year.

In terms of technicals, the relative strength index (RSI) of the Kalyan Jewellers stock stands at 72.2, signaling it's trading in the overbought zone. Kalyan Jewellers stock trades higher than the 5-day, 10 day, 20-day, 30 day, 50-day, 100 day, 150 day and 200 day moving averages.  

Kalyan Jewellers reported a 24 percent YoY rise in June 2024 quarter profit to Rs 177 crore. Revenue rose 26.5% to Rs 5,535.5 crore against Rs 4,375.7 crore in the same period last year.

EBITDA climbed 16.5 percent (YoY) to Rs 376.1 crore in Q1 against Rs 322.8 crore in Q1FY24.  However, margins witnessed a slight dip at 6.8 percent year-on-year basis.