Kalyan Jewellers Q3 Results: Profit Up 21%, But Misses Estimates
Revenue rose 40% to Rs 7,286.9 crore in the quarter ended December.
Kalyan Jewellers Ltd.'s consolidated net profit grew 21% in the October–December quarter of the current financial year, but missed analysts' estimates.
The company posted a profit of Rs 218.8 crore in the third quarter as compared to Rs 181 crore in the year-ago period, according to an exchange filing on Thursday. Analysts' estimates compiled by Bloomberg projected Rs 246 crore.
Kalyan Jewellers Q3 FY25 Highlights (Consolidated, YoY)
Revenue up 40% to Rs 7,286.9 crore versus Rs 5,223 crore (Bloomberg estimate: Rs 7,150 crore).
Ebitda up 19% at Rs 438.8 crore versus Rs 370 crore (Estimate: Rs 473 crore).
Ebitda margin narrows 110 basis points to 6% versus 7.1%. (Estimate: 6.6%).
Net profit up 21% to Rs 218.8 crore versus Rs 181 crore (Estimate: Rs 246 crore).
Kalyan Jewellers reported a 44% growth in profit after tax, adjusting for the impact of customs-duty reduction. The company's Middle East revenue grew 23%, while its digital-first brand Candere recorded an impressive 90% growth.
However, losses in Candere widened to approximately Rs 7 crore. The company remains on track to launch 30 Kalyan showrooms and 15 Candere showrooms in the near term.
In its earnings call, Kalyan Jewellers attributed the same-store sales growth to strong festive demand and fewer Shradh days. Looking ahead to the next fiscal, the company plans to add 90 Kalyan stores and 80 Candere stores.
The price correction in diamonds above 50 cents is expected to have a minimal impact as they contribute only 10% to revenue and inventory. Kalyan Jewellers did not repay any further debt in the current quarter but plans to reduce Rs 150 crore in debt in the upcoming quarter. Discussions with banks are ongoing to release collateral, with clarity expected in the next four–five months.
The company expects the profit-before-tax growth to outpace revenue growth due to the increasing adoption of the franchise model. In the third quarter, same-store sales growth was 23% in South India and 25% in non-South markets.
While the Ebitda margin will see a temporary decline due to expansion in the franchise-owned company-operated model, the company plans to resume company-owned store additions once debt is repaid.
Candere's revenue is projected to reach Rs 1,000 crore in the next three–four years, and by FY27, the revenue split between franchise and company-owned stores is expected to be 50:50, with margins stabilising at approximately 6%.
