Kalyan Jewellers Ltd. witnessed its shares climb 6% to an intraday high of Rs 702.30 on Thursday, hitting a new 52-week peak. This marks the second straight session the jewellery retailer's stock has achieved this milestone, crossing the Rs 700 mark for the first time since January 9, 2025.
The significant surge follows the company's robust Q2 earnings report released on November 10. The stock has gained 15% in just two sessions, with the firm's market capitalization now standing at Rs 71,848 crore. A total of 12.53 lakh shares were traded, generating a turnover of Rs 86.97 crore.
Technical Indicators and Analyst Outlook
From a technical perspective, the Relative Strength Index (RSI) for Kalyan Jewellers stock is currently at 75.7, indicating it is trading in the overbought zone. The stock also exhibits a beta of 1.41, suggesting very high volatility over the past year.
Brokerage firm Jefferies has maintained a 'Buy' rating on Kalyan Jewellers shares, setting a target price of Rs 900. This target implies a potential upside of 47% from current levels, based on a valuation of 40x December 2028 estimated earnings. Jefferies forecasts a 23% annual revenue growth and a 21% CAGR in Earnings Per Share (EPS) for the period of FY26-29E, supported by strong jewellery revenue growth.
Upside and Downside Scenarios
- Upside Scenario: In an optimistic scenario, Jefferies projects a target price of Rs 1,100, representing an 80% upside. This outlook is based on a forecast of 26% annual revenue growth and 23% CAGR in EPS, valuing the stock at 50x December 2028 estimated earnings.
- Downside Scenario: Conversely, in a pessimistic scenario, Jefferies sets a target price of Rs 550, indicating a potential 10% downside. This assumes 18% annual revenue growth and 18% CAGR in EPS, valuing the stock at 25x December 2028 estimated earnings.
Jefferies noted a strong start to Q3, exceeding management expectations, driven by healthy Navratri and Dhanteras sales. Wedding demand remains encouraging, contributing approximately 60% of sales, and the company continues to gain market share despite elevated competitive intensity. The firm has fully repaid its non-GML India debt, with cash being deployed for higher inventory in existing stores and select flagship locations.
MOFSL's Perspective
Another brokerage, MOFSL, also retained its 'Buy' rating on Kalyan Jewellers, with a price target of Rs 900. MOFSL highlighted that consolidated revenue grew 31% year-on-year to Rs 10,323 crore in Q2, surpassing their estimate. Profit soared 64% to Rs 427 crore, while same-store sales growth stood at 20% year-on-year, aligning with expectations.
Kalyan Jewellers is a prominent jewellery retailer with a substantial presence across India, the Middle East, the US, and the UK. It operates 546 showrooms globally, covering a retail area exceeding 12,99,000 square feet.