Sky Gold and Diamonds Share Price Hits Lower Circuit Despite Strong Q1FY26 Results

Market Performance

Sky Gold and Diamonds' share price was locked in a 5% lower circuit at ₹308.75 on Wednesday, July 24, despite impressive Q1FY26 earnings. The stock has declined around 2% in July, following a 20% correction in June, even as it rallied 26% in May.

In terms of long-term performance:

• 1-year gain: Over 51%
• 2-year gain: Over 2,200%
• 3-year gain: Around 5,000%
• 52-week high: ₹488.95 (December 2024)
• 52-week low: ₹186.41 (August 2024)

Main News

Sky Gold and Diamonds, a multibagger stock in the jewellery manufacturing sector, reported stellar Q1FY26 results, marked by substantial growth across revenue, profits, and margins. However, despite this strong financial performance, the stock faced selling pressure and hit the lower circuit.

Company Details

The company has emerged as a key player in the organised jewellery manufacturing segment, consistently outperforming peers. With a lean cost structure nearly 50% below industry average, Sky Gold continues to expand strategically in both domestic and international markets.

Some recent highlights:

• Product Innovation: Launched 18KT lightweight jewellery, catering to price-sensitive consumers amid high gold rates.
• New Client Acquisitions: Added major B2B clients including Aditya Birla’s Indriya, Reliance Retail, CaratLane, PN Gadgil, and PM Jewellers.
• Exports: Rose to 12% of total revenues in Q1FY26 from 8% in FY25.
• Dubai Expansion: Entered the Middle East via a newly incorporated sales and distribution unit in Dubai.

Financial Performance – Q1FY26 Highlights

Revenue

• Consolidated revenue rose 56.5% YoY to ₹1,131 crore
• Previous year’s revenue: ₹723 crore

EBITDA

• EBITDA surged 91.6% to ₹71.1 crore
• Reflects strong operational efficiency

EBITDA Margins

• Improved to 6.3%
• Compared to 5.1% in the same quarter last year

Net Profit

• Net profit more than doubled to ₹43 crore
• Previous year’s figure: ₹21 crore

Strategic Developments

• Client Onboarding via Advanced Gold Model: Expected to optimize working capital and improve profitability metrics like PAT and ROCE.
• ERP Implementation: Helps track inventory, receivables, and gold flow more accurately.
• Operational Goals: Targeting a working capital cycle of 52–55 days with sustainable ROCE above 30%.

Summary of the Article

Despite exceptional Q1FY26 results, Sky Gold and Diamonds' share price hit its 5% lower circuit on July 24. The company reported a 56.5% YoY jump in revenue, 91.6% growth in EBITDA, and over 100% rise in net profit, reflecting strong operational performance. Strategic initiatives like lightweight jewellery, expansion into Dubai, and ERP integration highlight its growth momentum. Still, the market reaction suggests investor caution following recent sharp price movements.

The Sky Gold and Diamonds share price has delivered massive multibagger returns over the last two years but is now witnessing short-term volatility. Investors are closely monitoring its next moves in exports, capacity expansion, and regional market penetration.