Kalyan Jewellers share price hits 6-month high as rally extends to fourth straight session. Is ₹700 the next stop?
It highlighted the company's hyperlocal approach to cater to diverse regional consumer preferences, the increasing share of organized players in the jewellry market, and Kalyan's rapid expansion strategy via its franchise model as key drivers of future growth.
Notably, JM Financial believes the shift to an asset-light franchise structure will support faster store rollouts and long-term profitability.
The stock's reasonable valuations also contribute to the brokerage's optimistic outlook. The brokerage has assigned a target price of ₹ 700 apiece for the stock.
According to the brokerage, Kalyan has been on an aggressive expansion spree since adopting the franchise model. This approach, considered highly capital-efficient, places the responsibility for store inventory and capex on franchise partners, thereby enabling quicker store additions. In FY25, Kalyan added 74 net stores in India and is targeting the addition of 85–90 stores annually over FY26–28E.
JM Financial believes the company would need five to six more years of expansion at this pace to match Tanishq in terms of store count.
The brokerage said, the company, over the years, has developed strong competitive moats, including brand positioning built on trust and transparency, a hyperlocal strategy, and its 'My Kalyan' initiative that enables customer acquisition in regions where it has no physical presence—contributing 15% of FY24 revenue and said it also maintains a well-balanced product mix.
Further, Kalyan has taken meaningful steps to improve corporate governance, such as appointing best-in-class auditors and selling non-core assets to reduce debt, which JM Financial believes will strengthen investor confidence.
On the financial front, the brokerage estimates revenue, EBITDA, and PAT to grow at a CAGR of 25%, 23%, and 31%, respectively, over FY25–28E, led by the addition of 278 new stores during the period. RoE and RoIC are also expected to improve to 24% and 23% by FY28 from 18% and 13% in FY25, reflecting enhanced profitability and lower capital requirements under the franchise model.
Kalyan Jewellers has shown consistent performance, with over 26% year-on-year growth in both revenue and PAT for the last eight quarters. JM Financial believes this sustained momentum has positioned Kalyan as a positive outlier in the discretionary space, which could lead to a potential re-rating of the stock.
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