Kalyan Jewellers shares fall over 9% but target prices go up to Rs 700
ADVERTISEMENT "We model 21%/17%/21% revenue/EBITDA/PAT CAGR over FY26–28E. We reiterate our BUY rating with a TP of INR 700," Motilal Oswal said, adding that it has largely maintained its EPS estimates for FY26 and FY27.
Kalyan's management indicated that there is no pent-up demand likely to emerge from the recent moderation in gold prices, as weddings have not been postponed. Studded share remained stable at 30.2% in 1QFY26 vs 30.4% in 1QFY25. Studded revenue rose 30%.
Despite a higher base and increasing FOCO saliency (~43% of India revenue), profitability surprised positively (EBITDA / PAT up 35% / 49% YoY), supported by procurement gains and operating leverage. Non-south now contributes 50% of India revenue, studded share held at ~30%, and Middle East mix improved. It retained aggressive rollout guidance (170 stores in FY26 – 90 Kalyan and 80 Candere) and has plans to launch regional brands during the year."With steady demand trends, despite elevated gold prices and an accelerating store rollout, we expect Kalyan's revenue momentum to remain strong. With RoCE at 21.8% and net debt/equity (ex-GML) near zero, the business remains well placed to drive capital-efficient scale," ICICI Securities said.Kalyan maintained its FY26 guidance of 170 new showrooms (90 Kalyan + 80 Candere), largely via the FOCO model.
"We largely maintain our estimates, modelling revenue / EBITDA / PAT CAGRs of 28% / 33% / 51% over FY25–FY27E. We maintain ADD with a DCF-based unchanged target price of INR 670. At our TP, the stock will trade at a multiple of 42x FY27E EPS. Key risks: delay in showroom expansion and potentially higher competitive intensity in core South India markets," ICICI said.
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