Brokerage Bullish on Kalyan Jewellers After Impressive Quarterly Performance
Domestic brokerage firm JM Financial has expressed strong optimism about Kalyan Jewellers India following the company's better-than-expected September quarter results. The financial services company has significantly revised its target price upward while maintaining its buy recommendation on the stock.
JM Financial has increased its target price by 10.7% to ₹775 per share from the previous target of ₹700. This new projection indicates a substantial upside potential of approximately 50% from the stock's most recent closing price, presenting an attractive opportunity for investors.
Strong Growth Momentum and Festive Performance
According to the brokerage's analysis, Kalyan Jewellers' growth outlook remains robust, with the company reporting an impressive 30% Same Store Sales Growth (SSSG) during the festive period. Notably, this positive momentum continued even after Diwali celebrations, supported by favorable gold price corrections that encouraged consumer purchases.
The company's second quarter financial results demonstrated remarkable performance. Net profit nearly doubled to ₹260 crore in Q2 FY26, showing a massive 99% jump from ₹130.3 crore recorded in the same quarter last year. However, compared to the preceding quarter, profit showed a slight decline from ₹264 crore reported in Q1 FY26.
Revenue from operations during the September quarter stood at ₹7,856 crore, representing a 30% year-on-year increase from ₹6,057 crore and an 8% quarter-on-quarter growth. This impressive revenue performance was primarily driven by healthy SSSG of 16%.
Debt Reduction Strategy and Business Expansion
Kalyan Jewellers' management has made significant progress in reducing its debt burden. The company reduced its non-GML debt by ₹3.5 billion during the first half of FY26 and plans to further decrease it by ₹1.5 billion in the second half of the fiscal year.
The company remains firmly on track to achieve its goal of becoming completely debt-free by the end of FY27. This strategic objective will be accomplished through a combination of non-core asset sales and strong operational cash flows.
JM Financial also highlighted the improving condition of Kalyan Jewellers' Candere business, noting that it is now getting into better shape and is expected to become profitable in FY26. Additionally, the company plans to launch a regional brand in the fourth quarter of FY26.
The brokerage firm has paused its pilot program that involved reducing payables and will instead utilize the generated cash flow for debt repayment, accelerating the journey toward financial independence.
Industry Position and Market Expansion
Another prominent brokerage, Motilal Oswal, has also maintained its 'buy' rating on Kalyan Jewellers with a target price of ₹675 per share. The brokerage emphasized that with the successful scaling of new franchise businesses, which now contribute over 45% of total revenue, and continued success in non-Southern markets, Kalyan Jewellers has established itself as a leading brand in the industry.
The company's expansion beyond its traditional Southern strongholds has resulted in an improved studded jewelry mix, which typically carries better profit margins. Revenue from studded jewelry jumped 36% year-on-year to ₹2,115 crore, while gold jewelry segment revenue rose 27% YoY to ₹4,583 crore.
The asset-light expansion strategy supports healthy cash flow generation for debt repayment while simultaneously enhancing profitability through reduced interest costs. Most of the company's incremental showroom openings are expected to come from non-south markets, further diversifying its geographical presence and revenue streams.
With multiple growth drivers, strong operational performance, and a clear path to becoming debt-free, Kalyan Jewellers continues to attract positive attention from financial analysts and investors alike.
