Why Rajesh Exports Share Price is Falling

Editor's note: No one likes getting stuck in an underperforming stock for too long.

When popular stocks find no takers, their stock prices move sharply southwards. Then, they are labelled as falling knives.

Lately, investors in Rajesh Exports are experiencing a similar feeling.

The stock has fallen like nine pins in recent months. In fact, the fall accelerated starting June 2023 when the company failed to submit a key report along with its audited financial results for the year ended March 2023.

While declaring its results for FY23 and for the quarter ended March 2023, Rajesh Exports did not put out its audit report and a comparative number of cash flow statements.

Market participants were quick to spot this and raised concerns over corporate governance.

In its defence, a senior official at the company said back then that the omission of the report was 'inadvertent' but the firm is ready to submit it if the exchanges ask for it.

We'll let you be the judge whether this is the main cause of concern for Rajesh Exports at the moment.

However, the stock was also experiencing a similar decline back in April 2023 and we covered a detailed editorial explaining reasons behind the decline.

Continue reading...

Why Rajesh Exports Share Price is Falling

Akshaya Tritiya is an auspicious day for Hindus. It's considered to be a good day to invest in gold. It is believed that buying gold on this auspicious day brings prosperity and good fortune.

However, according to reports, jewellers are expecting a 20% decline in sales because of low consumer demand for this year's Akshaya Tritiya.

One of the prime companies impacted by low demand during Akshay Tritiya is Rajesh Exports.

The company's share price fell by 17% in the last six months. So what changed this Akshaya Tritiya and how is it affecting Rajesh Exports share price?

Read on to find out why Rajesh Exports share price is falling...

#1 Rising gold prices

Gold is often considered the safest form of investment. Hence, whenever the overall economy is going through a tough phase, people often buy gold.

As the threat of recession, high interest rates, among other concerns still loom large, investors resorted to safe haven buying and bought bullion. People resorted to buying gold, thus driving up the gold demand. As a result, gold price was rising and so was the price of silver.

However, at present, the prices are so high that gold is no longer affordable. Gold futures on MCX are trading above Rs 60,000 per 10 grams!

Now, the market expects gold demand to fall because of this extremely high price.

Gold forms a part of consumers' luxury spending. Hence rising gold prices and rising inflation would translate into reduced spending on gold.

The same impact can be seen in the gold markets. People are buying gold only for an inevitable event. Indian investors take time to get used to the surge in gold prices, therefore, the demand is likely to remain lower during Akshaya Tritiya this year.

Being involved in the business of gold, falling gold demand hurts the business of Rajesh Exports.

#2 Profit booking

Profit booking is a tendency of the stock market. In multiple cases, you would see a stock come down after rallying sharply.

Take the case of Hindustan Aeronautics (HAL). Shares of HAL rose over 66% in the last one year. Recently, on 13 March 2023, the stock hit a 52-week high. HAL's share price is on a bullish run on account of a growing order book and increased focus of the government on self-reliance in the defence sector.

But the stock came under pressure after hitting its 52-week high price in March 2023...within 10 days, HAL shares fell 13% despite strong growth prospects.

This is an effect of profit booking. Investors who think the stock has run its course and will likely stay in a range for the time being exit the stock.

It appears something similar has happened with this jewellery company. After rallying non-stop, some investors might have opted to book profits.

Rajesh Exports share price hit its 52-week high of Rs 1,028.4 on 6 February 2023 after it entered into a tripartite agreement for establishing a 5 GWh Lithium cells factory.

Since, shares of Rajesh Exports have witnesses a sharp sell-off.

Growth prospects

On 6 February 2023, Rajesh Exports announced that it was selected by the government of India as one of the three successful participants in the Rs 181 billion (bn) PLI Scheme for the production of advanced chemistry cells.

The advanced cells will be used to manufacture lithium-ion batteries. As per the requirements of the PLI scheme, Rajesh Exports has incorporated a 100% subsidiary in the name of ACC Energy Storage.

To manufacture advanced chemistry cells, a tripartite agreement has been executed between the Ministry of heavy industries (government of India), the Department of Industries and Commerce (Government of Karnataka) and ACC Energy Storage.

The agreement involves setting up a 5 GWh giga factory for manufacturing Lithium cells.

The lithium gold rush is picking up in India. No wonder, the company's share price hit a 52-week high after the announcement.

How Rajesh Exports share price has performed recently

In the past one year, shares of Rajesh Exports sare down around 11.4%. In 2023, the stock is down by 20.7%.

Rajesh Exports touched a 52-week high of Rs 1,028.4 on 6 February 2023 and a 52-week low of Rs 516.1 on 13 June 2022.

About Rajesh Exports

Rajesh Exports is an Indian multinational gold retailer headquartered in Bangalore, Karnataka. The company refines, designs, and sells gold and jewellery. It has a global presence in the gold markets.

Recently, the company has also announced its foray into the EV market. In May 2022, the executive chairman, Rajesh Mehta said that the company invest about Rs 500 bn over seven years in the electric vehicles (EV) division.

He had also mentioned that the company planned to launch its own range of electric vehicles in 12-18 months, for which Karnataka is decided as the investment destination. However, so far no such vehicles are launched.

In June 2022, the company announced that it will invest around Rs 240 bn in setting up a semiconductor display fab in Telangana. The fab will supply AMOLED displays to TV, smartphone and tab.

To know more check out the company's factsheet and quarterly results.

You can also compare the company with its peers:

Rajesh Exports vs Bhakti Gems and Jewelery

Rajesh Exports vs Deep Diamond

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...