Kalyan Jewellers Eyes Growth Beyond South To Drive Revenue

The revenue from southern states rose 7-8%, while it surged 28-29% for other regions in Q2.

<div class="paragraphs"><p>Representative Image. (Source: <a href="">Vaibhav Nagare</a>/Unsplash)</p></div>
Representative Image. (Source: Vaibhav Nagare/Unsplash)

Kalyan Jewellers Ltd. intends to drive revenue from non-southern states and bring their contribution on a par with that of the south in the next two years.

This revenue growth in non-southern states will be aided by adding new stores and expanding Candere—the online portal for gold and other precious jewellery, Executive Director Ramesh Kalyanaraman told BQ Prime's Sajeet Manghat.

The Kerala-based company's second-quarter revenue rose 20% year-on-year, according to an exchange filing. The revenue in southern states rose 7–8%, and the growth in non-southern states was 28–29%.

Other Q2 Highlights (Consolidated, YoY)

  • Net profit rose by 55% to Rs 106.4 crore.

  • Operating profit is up 16% at Rs 266.1 crore.

  • Ebitda margin dropped to 7.6%, compared to 7.9% in the corresponding quarter of the previous year.

The company opened 14 new showrooms in the first half of the year, including one in the Middle East and the first physical store of Candere.

The company further plans to open 14 more showrooms in the last two quarters of FY23. Of these, one will be in the Middle East as a franchise store along with two physical stores by Candere.

Kalyanaraman underscored that the company has completed the pilot phase of the franchise model. "We are very happy that it has stabilised, the momentum is good, the operating model has stabilised, and we have high inquiries from franchisee partners," he said.

The company also intends to focus on this model as it is a "capital-light" and will provide "more cash liquidity on the books". "Our focus is to use that to reduce our cash credit, which has a higher interest rate than the gold loan."

The company will expand in the Middle East through the franchise model and aims to convert its own stores into franchisee outlets as well in the next three years.

Watch the full interview here: