This multibagger jewellery stock crashes 49% from recent high. Is it in your portfolio?

Stock market today: Even as the market recovered from its recent bottom, some stocks are still under significant pressure, with Motisons Jewellers being one of them, as it extended its losing streak to the sixth consecutive month.

The stock has closed in the red for the past five months and lost another 3.5% of its value in March, taking the six-month cumulative drop to over 38%. From its record high of ₹33.80 per share, it is now trading 49% lower at ₹17 apiece. It has been trading on an ex-split basis in a 1:10 ratio since November 8.

Motisons Jewellers, along with its organised peers, continues to face challenges in recovering from the recent downturn, as the sustained rise in gold prices raises concerns over its potential impact on jewellery sales.

Although organised jewellery players like Motisons Jewellers benefit from inventory appreciation, fears that higher prices may slow down demand have overshadowed the near-term growth outlook.

The recent gold import data is also reflecting the same trend as gold imports in February fell to their lowest level since March 2024, marking the third consecutive month of decline and a steep drop from November's highs.

According to Ministry of Commerce data, the gold import bill for February totaled $2.3 billion, which is a 14% MoM and 63% YoY decline. India is the world's second-biggest consumer of the precious metal.

However, experts maintain a positive long-term outlook for jewellery stocks, citing gold’s deep cultural significance in India and the sector’s growing shift toward organized players.

Expectations are growing that seasonal factors (auspicious days and festivals) and wedding-related purchases could lend support to gold demand over the next couple of months. However, this may not fully compensate for the price-driven constraints in jewellry demand, according to market experts.

Looking back, jewellery demand in India has steadily risen in recent years, driven by rising disposable incomes, a shift towards regular-wear jewellery beyond traditional wedding pieces, a growing interest in investment jewellery, diversified product offerings such as modern designs and diamond jewellery, increased trust from hallmarking, and an enhanced shopping experience at organized retail stores.

The current gold price is up 17% vs. Q3FY25, and this is the sixth consecutive quarter of gold prices continuing to rise. Gold price is up nearly 60% over the last two years.

Despite recent crash, stock remains 218% above IPO price

Despite the sharp crash in the stock price, the stock is still up by 218% from its IPO price of ₹5.5 apiece (adjusted). The stock has debuted on Indian exchanges in December 2023.

Motisons Jewellers specialises in jewellery crafted from gold, diamonds, and kundan and also offers products made from pearls, silver, platinum, and other precious and semi-precious metals.

For the December quarter, the company reported revenue from operations of ₹145 crore, up from ₹123 crore in Q3 FY24, with profit after tax (PAT) rising to ₹15 crore compared to ₹11 crore in the same quarter last year. In the preceding September quarter, the company reported a PAT of ₹10 crore.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.