Domestic brokerage firm JM Financial remains upbeat on Kalyan Jewellers India following the company’s September quarter performance, which came in higher than its estimates. The company’s focus on becoming debt-free by the end of FY27, coupled with a better outlook for the remaining period of FY26, has led the brokerage to lift its target price on the stock.
It has revised its target price higher by 10.7% to ₹775 apiece from the earlier price target of ₹700, indicating an upside potential of 50% from the stock’s latest closing price, while retaining ‘buy’ rating on the stock.
According to the brokerage, Kalyan Jewellers growth outlook continues to be robust, with the company witnessing 30% SSSG during the festive period. The momentum has been sustained even post-Diwali due to the correction in gold prices.
The brokerage also highlighted the company’s Candere business, noting that it is now getting into better shape and is expected to be profitable in FY26.
The management has also reduced its non-GML debt by ₹3.5 billion in 1HFY26 and plans to bring it down further by ₹1.5 billion in 2HFY26. It remains on track to become debt-free by the end of FY27, led by a combination of the sale of non-core assets and cash flows.
It also plans to launch a regional brand in 4QFY26 and has paused the pilot program that involved reducing its payables. The company will now use the cash flow for debt repayment, JM Financial noted.
Another brokerage firm, Motilal Oswal, also retained a ‘buy’ rating on the stock with a target price of ₹675 apiece.
“With the successful scale-up of its new franchise businesses (>45% revenue contribution) and continued success in non-Southern markets, the company has established itself as a leading brand in the industry,” said the brokerage.
Its non-South expansion has improved the studded jewelry mix, while the asset-light expansion supports healthy cash flow generation for debt repayment and enhances profitability by reducing interest costs, the brokerage further said.
Kalyan Jewellers Q2 performance
The company reported a net profit of ₹260 crore in Q2, marking a ₹130.3 crore recorded in the same period last year”>99% jump from ₹130.3 crore recorded in the same period last year. However, sequentially, the profit came in slightly lower compared to ₹264 crore reported in the first quarter of FY26.
Its revenue from operations during the reporting quarter stood at ₹7,856 crore, up 30% year-on-year from ₹6,057 crore and 8% higher quarter-on-quarter, driven majorly by healthy SSSG of 16%.
Studded jewellery revenue, which typically carries better profit margins, jumped 36% year-on-year to ₹2,115 crore, while revenue from the gold jewellery segment rose 27% YoY to ₹4,583 crore.
The company plans to increase its revenue contribution from non-south markets, with most of its incremental showroom openings expected to come from these regions.
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