HSBC has reiterated its confidence in jewellery retailer Kalyan Jewellers, but not without acknowledging that the market's mood has shifted in recent weeks. In its latest note, the brokerage maintained a 'buy' rating on the stock, while cutting its target price to Rs 650 from Rs 690. Shares of the company closed at Rs 379.80, up 0.9% on Friday.
The brokerage noted the strong operational performance, supported by operating leverage, which helped the company deliver a decent Q3 earnings. HSBC said adjusted EBITDA rose 52% year-on-year.
On demand, HSBC flagged that Q4 demande remain strong. The firm also noted upcoming growth drivers, including a regional brand launch in Q4, which could support expansion and customer reach.
On the balance sheet, HSBC observed that debt was flat quarter-on-quarter, but said the company remains on track to meet its FY26 guidance. It added that a land sale is expected to conclude by H1FY27, which could provide additional financial flexibility over time.
While HSBC affirmed that performance remains strong, it said recent volatility has led to a lower target multiple, prompting the reduction in the target price despite the otherwise constructive outlook.
Q3 Results: Kalyan Jewellers Net Profit Doubles
Kalyan Jewellers India on Friday reported a 90.36% growth in net profit to Rs 416.29 crore. The company's net profit stood at Rs 219 crore YoY Revenue from operations of the company grew 42.11% during the quarter under review to Rs 10,343 crore compared to Rs 7,278 crore in YoY.
Kalyan Jewellers Q3 (Cons)
- Net profit up 90.3% at Rs 416 crore versus Rs 219 crore YoY
- Revenue up 42.1% at Rs 10,343 crore versus Rs 7,278 crore YoY
- EBITDA up 74.5% at Rs 750 crore versus Rs 430 crore YoY
- EBITDA margin at 7.3% versus 5.9% YoY
One-time cost of Rs 41.5 crore due to new labour codes.
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