Shares of Kalyan Jewellers, a jewellery company from Kerala, rose by 9.4% to Rs 548.65 on Monday. This increase followed a statement from Motilal Oswal AMC, which is an asset management company. They denied rumors that their managers were bribed to invest more money in Kalyan Jewellers. They described these claims as false and harmful, saying it was an attempt to damage their good name.
The management at Kalyan Jewellers had already addressed these rumors during a recent conference call with analysts. Motilal Oswal stated that they have a strong reputation built on honesty and transparency over the last 40 years. They urged everyone to ignore these false claims and rely on trusted sources for information.
Despite strong performance, Kalyan Jewellers’ shares had dropped 16% in the past week and more than 30% over the last month. Before this decline, the company’s stock had increased by an amazing 940% since their public offering in March 2021, reaching a peak of Rs 795 earlier this month.
Investor confidence in Motilal Oswal also fell, causing their shares to drop nearly 7% last week. However, on Monday, they rebounded by 4%, trading at Rs 827.10.
Last week, Kalyan Jewellers’ Executive Director, Ramesh Kalyanaraman, called the bribery and other allegations completely ridiculous. He confirmed that they are not planning to buy any aircraft and currently only operate a helicopter.
Even with the negative sentiment, Kalyan Jewellers reported strong business results, with a 39% increase in revenue and a 41% rise in their Indian business compared to the previous year. They also opened 24 new stores and experienced a 24% growth in same-store sales, thanks to festive and wedding seasons.
As of December 31, foreign investors held 16.37% of Kalyan Jewellers’ shares, while domestic ones owned 13.58%. The company’s founders, led by Kalyanaraman T.S., owned 62.85%. Motilal Oswal Midcap Fund owned the largest mutual fund stake at 6.30%. Kalyan Jewellers operates 349 stores globally, with plans for continued growth.
Analysts are still positive about the company’s future. Eight out of eight analysts recommend buying Kalyan Jewellers shares, with an average target price of Rs 761
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