Global brokerage firm Jefferies has initiated coverage on Kalyan Jewellers with a "Buy" rating, projecting a significant 40% upside for the stock. The brokerage has set a price target of Rs 830, based on Thursday's closing price of Rs 598.
"Differentiated Growth Engine" Driving Gains
Jefferies analysts are bullish on Kalyan Jewellers, identifying its "differentiated growth engine" as a key factor driving market share gains. This trend is expected to continue in the coming years, positioning the jewellery chain for sustained expansion.
The brokerage highlighted Kalyan's unique approach, which combines "neighbourhood relevance with organised scale." A franchisee-led model is seen as particularly effective, supporting capital efficiency and enabling rapid expansion, especially in regions beyond South India.
Strong Stock Performance and Q1 Results
Kalyan Jewellers' stock has demonstrated robust performance recently, climbing 58% over the past month and 44% in the last three months. In the previous trading session, the company's shares closed 5.28% higher at Rs 598 on the BSE, pushing its market capitalization to Rs 61,757 crore.
The company reported strong financial results for the June quarter. Consolidated net profit surged by 32% year-on-year to Rs 348.7 crore, driven by robust sales across its jewellery business. Revenue from operations also saw a substantial increase of 45.7% to Rs 10,588.9 crore, indicating healthy demand and ongoing expansion efforts.
While EBITDA rose 24.5% to Rs 632.5 crore, the EBITDA margin narrowed slightly to 6% from 7% in the prior year, primarily due to higher operational costs and a less favourable operating mix.
Analyst Consensus and Future Outlook
The broader analyst community echoes Jefferies' optimism. According to Bloomberg data, eight out of nine analysts covering Kalyan Jewellers currently hold a 'Buy' rating on the stock, with one recommending 'Hold'.
Jefferies anticipates that India will remain Kalyan Jewellers' primary growth driver, despite its global presence. The brokerage projects a Compound Annual Growth Rate (CAGR) of 21-23% for revenue and earnings between fiscal years 2026 and 2029. Despite these strong growth expectations, Jefferies values the stock at 38 times its September 2028 estimated earnings, which represents an almost 30% discount compared to industry peer Titan.