Kalyan Jewellers share price: Why Budget 2025 holds key for this jewellery stock?

Kalyan Jewellers share price: After hitting an all-time high of ₹795.40 apiece on the NSE, the jewellery stock has been on a continuous downtrend since then. Kalyan Jewellers’ share price ended at ₹502.20 per share on the NSE on Friday, recording around a 37 per cent dip in the YTD. However, the jewellery brand has become worth watching ahead of the Union Budget 2025.

According to stock market experts, the Government of India (GoI) may increase customs duty on gold in the upcoming budget 2025. If this happens, Kalyan Jewellers’ share price can have some sharp upside. They advised Kalyan Jewellers shareholders to hold the stock with a strict stop loss at ₹480 and wait for a trend reversal. On a possible bounce back, the jewellery stock may touch the ₹595 per share mark soon.

Why does Budget 2025 hold the key?

Advising Kalyan Jewellers shareholders to remain vigilant about the Budget 2025, Sugandha Sachdeva, Founder of SS WealthStreet, said the Government of India is likely to increase basic customs duty on gold to curb the surge in gold imports following last year’s unprecedented cut in import duties.

“If the government proceeds with the anticipated duty hike, gold prices are expected to rise in the short-term to account for the increased landed cost of gold. This scenario could benefit established jewellery brands like Kalyan Jewellers, as their buffer stock would allow them to capitalize on the price increase,” Sachdeva explained.

She added that market participants might start factoring in this potential gold price benefit into the company’s stock valuation, especially given its capacity to absorb and profit from fluctuating gold prices.

Sachdeva advised shareholders to remain invested in Kalyan Jewellers, maintaining a strict stop-loss level at ₹470 per share on a closing basis. While the stock recently faced sharp selling pressure over the past two weeks after reaching record highs of ₹795, it appears to be stabilising, with significant support seen near the ₹480 mark.

“Investors should remain cautious but optimistic, as the anticipated duty hike could turn into a tailwind for Kalyan Jewellers, supporting a potential rebound in its stock price,” noted Sachdeva.

Kalyan Jewellers share price outlook

Speaking on the technical outlook for Kalyan Jewellers share, Sumeet Bagadia, Executive Director at Choice Broking, said, “Kalyan Jewellers share price has been witnessing sharp selling from the record high levels. The stock has been on a downtrend for the last ten straight sessions (barring 14th Jan 2025). On the technical chart, Kalyan Jewellers’ share price is immediately supported at the ₹500 mark. The stock is in an oversold zone; hence, some recovery is expected in Kalyan Jewellers shares. However, fresh buying is still not advised. On a possible trend reversal, Kalyan Jewellers share price may touch ₹575 to ₹595 apiece level in the near term.”

Customs duty on gold jewellery in India

As per the earlier report by LiveMint, the government is reviewing customs duties on over two dozen items, including gold, and may raise the levy on the yellow metal if the recent duty reduction raised consumption instead of achieving the stated policy objective of domestic value addition, two people aware of the development said.

Customs duties are often tweaked in annual budgets with clear objectives—to shield citizens from inflation, to ensure sufficient supplies of essential commodities, to eliminate duty inversion, and to encourage domestic manufacturing by reducing taxes on inputs compared to finished goods. In the case of gold, precious metal imports surged after the duty reduction in July. Still, they said the export of finished goods such as gems and jewellery contracted, requesting anonymity.

The entire budget for FY25, presented on 23 July 2024, slashed customs duty on gold and silver bars to 6% from 15% and platinum, palladium, osmium, ruthenium and iridium to 6.4% from 15.4%. The following month (August), gold imports jumped by about 104% annually to $10.06 billion, even as India’s gem and jewellery exports contracted by over 23% to $1.99 billion. While gold is one of the main inputs for gems and jewellery manufacturing, it is also used in electronics, albeit in small quantities.

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