Shares of Kalyan Jewellers rose 6% after brokerage Citi highlighted the company's Q1 growth numbers with a target price indicating that the stock could more than double from current levels.
Kalyan Jewellers share price advanced 6.4% intraday to Rs 377.7 apiece. The scrip was trading 4.44% higher by 11:06 am, while the benchmark Nifty 50 index was 0.45% down.
In its recent note, Citi maintained 'buy' rating on the stock at a target price of Rs 750, marking an upside of 108% from its Wedesday's opening price of Rs 360.
The brokerage said its long-term growth outlook remains intact despite the company's June-quarter revenue growth falling short of the brokerage's expectations.
In an exchange filing on Tuesday, the jewellery-maker informed the exchanges its consolidated grew around 38% on an year-on-year basis. This was driven by operating momentum in India with 28% same-store-sales-growth across all the key markets. The April to June quarter revenue growth missed Citi estimate of 45%.
Kalyan Jewellers international operations posted around 35% surge in revenue when compared to the same period during the previous financial year. The brokerage highlighted that the share of revenue from International markets was 14% of consolidated revenue. No new stores were added during the quarter in International markets.
In the Middle East, the company witnessed revenue growth of approximately 30% for Q1 FY2027 as compared to Q1 FY2026 driven predominantly by same-store-sales-growth despite geopolitical tensions in the region.
The company's digital-first jewellery platform, Candere, recorded a revenue growth of nearly 112% in Q1FY27 as compared to the same period during the last year. It launched 12 Kalyan showrooms and 5 Candere showrooms in India in the quarter.
Citi believes sustained franchise-led store expansion should aid in driving strong growth, deleveraging of balance sheet, and RoCE improvement. Some of the key risks for Kalyan Jewellers include India's revenue growth being slower than Titan's revenue growth for the first time in the last 13 quarters, slowdown in demand environment, delay in balance sheet deleveraging and deviation from asset-light franchise store expansion.
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