Kalyan Jewellers Continues To Outperform, Says Citi Research As It Retains 'Buy'

Kalyan Jewellers Ltd. continued to outperform on the back of sustained franchise store-led expansion, deleveraging of balance sheet, according to Citi Research. The brokerage retained 'Buy' rating on the stock with Rs 810 target price, which implied a 12.04% upside from Tuesday's closing price.

Kalyan Jewellers kept up the store expansion momentum in India as it added 24 new Kalyan and 23 new Candere stores in the third quarter. It also added its first store in the US, taking its total store count to 349, Citi Research said.

During the third quarter, the India business grew 41% on the year in revenue as store expansion helped. "Adjusted for franchise store expansion-led sales (assuming Rs 25.0 crore initial sales for the 24 stores opened during the quarter), implied revenue growth was 34% YoY vs Titan’s ex-bullion domestic Jewellery division revenue growth of 25% YoY," Citi Research said.

Now, the management of Kalyan Jewellers is focused on adding 30 new Kalyan and 15 Candere stores in India in the fourth quarter of financial year 2025. In the next financial year, it expects 90 Kalyan stores in non-south and international market, and 80 candere stores in India, Citi Research said.

Kalyan Jewellers' execution on store expansion has been ahead of Citi Research's expectations. The expansion, deleveraging of balance sheet will help in higher growth, return on capital employed improvement, and re-rating stock, according to the brokerage.

The middle-east and candere business grew 22% and 89%, respectively in three months to December. The share of revenue from the middle-east space was 11% consolidated revenue.