Kalyan Jewellers Share Price Surges Over 5% After Jefferies Initiates 'Buy'

Shares of Kalyan Jewellers India Ltd. rose over 5% on Friday with stock trading at Rs 621.50 apiece at 9:32 am. This comes at the back of Jefferies initiating coverage on Kalyan Jewellers. The stock opened 1.51% higher at Rs 607 apiece before extending its gains. 

Jefferies has set a target price of Rs 830 on Kalyan Jewellers, implying an upside of about 34% from the stock's early trading price on Friday.

The brokerage said Kalyan Jewellers was well placed to benefit from the formalisation of India's jewellery market. The company combines neighbourhood relevance with the scale and capabilities of an organised retailer, creating what Jefferies described as a differentiated growth engine capable of driving market-share gains.

Kalyan Jewellers' franchisee-led model is another key pillar of the brokerage's positive view. Jefferies said the model supports capital efficiency and allows the company to expand rapidly, particularly outside South India.

While the jeweller also has an overseas presence, India remains the bedrock of its operations and growth strategy, according to the brokerage.

Jefferies also highlighted Kalyan Jewellers' financial position, noting that the company has a net-cash balance sheet supported by increasing free cash flow and strong return ratios. It expects the company's earnings per share to record a compound annual growth rate of 21% between FY26 and FY29.

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The brokerage's bullish outlook comes after Kalyan Jewellers reported strong year-on-year revenue and profit growth for the June quarter.

The company's consolidated net profit rose 32% to Rs 349 crore in the first quarter, compared with Rs 264 crore in the year-ago period. Revenue increased 45.7% to Rs 10,589 crore from Rs 7,268 crore.

Earnings before interest, tax, depreciation and amortisation rose 20.9% to Rs 632.5 crore from Rs 523.3 crore a year earlier. However, the Ebitda margin contracted to 6% from 7.2% in the corresponding quarter of the previous financial year.

Kalyan Jewellers India Ltd.

Kalyan Jewellers India Ltd.
Photo Credit: (Photo: NDTV Profit)

The scrip rose as much as 5.35% to Rs 630 apiece on Friday at 9:29 a.m. This compares to a 0.08% fall in the NSE Nifty 50 Index.

It has risen 4.93% in the last 12 months and 27.89% year-to-date. Total traded volume so far in the day stood at 37.14 times its 30-day average. The relative strength index was at 62.19.

Out of nine analysts tracking the company, eight maintain a 'buy' rating and one maintain a "hold", according to Bloomberg data. The average 12-month consensus price target of Rs 733.89 implies an upside of 21.2%

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