Global investment bank Jefferies has retained its ‘Buy’ recommendation on Kalyan Jewellers India and raised the price target by 8% to Rs 900. This implies an upside of nearly 36% from the stock’s closing price of Rs 663.75 apiece on Wednesday.
The jeweller’s September quarter performance was in-line with Jefferies’ expectations, despite the shift in the festive season to the December quarter. The management’s commentary was “quite confident,” Jefferies said, adding that the festive season is going strong and better than expectations.
Kalyan Jewellers India Ltd on Tuesday reported consolidated revenue of Rs 10,323 crore for the September quarter, registering a growth of 31% year-on-year (YoY). Its consolidated net profit increased 64% to Rs 427 crore.
Kalyan Jewellers’ earnings before interest, tax, depreciation, and amortisation (EBITDA) increased 30% YoY to Rs 644.7 crore. However, EBITDA margin fell slightly to 6.25% from 6.33% a year ago.
The December quarter has started strongly and better than the management’s expectations, with healthy trends during Navratri, Dhanteras, and post-Navratri. The company’s medium-term growth outlook of around 25% remains intact despite a high base in the second half of FY27, Jefferies said.
The wedding season demand also remains encouraging, with around 60% of share. Jefferies said competition remains high in the sector, though structural shift towards organised players remains supportive for the company.
Kalyan Jewellers has fully repaid debt related to non-gold metal loans in India, with cash deployment focused on higher inventory in existing stores and select flagship stores.
The company’s revenue from Middle East operations grew 11% YoY. There are ongoing discussions for a larger franchise owned and company operated (FOCO) partnership in the region.
The jeweller’s gold and diamond jewellery brand Akshaya Thanga Maligai’s first store has exceeded expectations, with strong initial revenue traction. It has planned four more stores in FY27, two each in the December and the March quarters, and the near-term expansion focused on Tamil Nadu.
Jefferies expects 23% annual growth in revenue over FY26 to FY29, with some improvement in EBITDA margins. It expects earnings per share (EPS) to rise at 21% compounded annual growth rate, supported by strong jewellery revenue growth.
The jeweller’s September quarter earnings were in line with expectations. The December quarter has started strong, with firm demand amid the festive and wedding season in the country.