KDDL shares hit 20% upper circuit; what sparked a rally in the watch components maker

Shares of watch components maker KDDL  witnessed strong buying momentum on Wednesday in an otherwise weak broader market after the company reported robust earnings for the fourth quarter ended March 2026. Sentiment was further boosted after the Chandigarh-headquartered company, a precision engineering manufacturer supplying critical watch components globally, announced a dividend of ₹8 per share, subject to shareholder approval.

Cheering the Q4 results, KDDL shares hit their 20% upper circuit limit of ₹2,626.35 on the BSE, taking the company’s market capitalisation to around ₹3,230 crore. The counter also witnessed a sharp spike in trading volumes, with 8,661 shares changing hands compared with the two-week average volume of 465 shares.

KDDL shares have risen around 6% in calendar year 2026 and gained over 9% in the past one month. However, the small-cap stock has declined more than 3% over the past one year, while rising over 2% in the last six months. The stock touched a 52-week high of ₹3,070 on June 17, 2025, and a 52-week low of ₹1,976.25 on March 30, 2026.

Q4 earnings fuel rally

The company, globally recognised for manufacturing high-quality watch dials, hands and precision-stamped components, reported a strong operational performance in Q4 FY26, driven by healthy revenue growth.

Profit after tax (PAT) rose 9.4% year-on-year (YoY) to ₹34.5 crore in Q4FY26 from ₹31.6 crore in the corresponding quarter last year. Sequentially, however, PAT declined 9.8% from ₹38.3 crore reported in Q3FY26.

Revenue from operations increased 37% YoY to ₹575 crore in Q4FY26, compared with ₹419.6 crore in the year-ago period. On a quarter-on-quarter (QoQ) basis, revenue declined 3.6% from ₹596.7 crore reported in Q3FY26.

At the operating level, EBITDA grew 25.2% YoY to ₹95 crore from ₹75.9 crore in Q4FY25. However, EBITDA margin contracted to 16.3% from 17.6% due to rising costs. Sequentially, EBITDA fell 6.2% from ₹101.4 crore reported in the December quarter.

Higher employee and operating expenses weighed on profitability margins during the quarter. Employee expenses increased to ₹74.4 crore from ₹52.4 crore in the year-ago quarter, while other expenses rose to ₹81.1 crore from ₹59.4 crore.

For the full financial year FY26, KDDL reported strong top-line growth, with revenue rising 30.7% to ₹2,153.4 crore from ₹1,647.9 crore in FY25. Total income increased 30.3% to ₹2,207.8 crore.

Annual EBITDA rose 18.3% to ₹363.2 crore, although EBITDA margin narrowed to 16.4% from 18.1% in the previous year. EBIT increased 9% to ₹240.7 crore, while profit before tax (PBT) rose marginally by 3.2% to ₹195.7 crore.

Despite strong revenue growth, FY26 PAT declined 5% to ₹135.2 crore from ₹142.3 crore in FY25, mainly due to higher depreciation, interest costs and operating expenses.

The board of the company has recommended a final dividend of ₹8 per share, subject to shareholder approval. Over the past 12 months, the company has declared total equity dividends of ₹20 per share. At the current market price, KDDL’s dividend yield stands at 0.77%, according to data from Trendlyne.

KDDL commands over 90% market share in India’s watch hands manufacturing segment and is among only five independent watch hand manufacturers globally. In the domestic market, it is the sole supplier of watch hands to leading brands such as Titan, Timex and Fossil. The company is also the parent of Ethos, India’s largest luxury and premium watch retail chain.

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