Kalyan Jewellers India Ltd. experienced a significant boost in its share price, climbing 10 percent in Wednesday's trade following the announcement of robust September quarter results. The Thrissur-headquartered jewellery retailer reported strong financial performance, prompting brokerage firm MOFSL to reaffirm its 'Buy' recommendation for the stock.
Strong Financial Performance in Q2
The company's consolidated revenue for the second quarter rose by an impressive 31 percent year-on-year (YoY) to Rs 10,323 crore, surpassing MOFSL's estimate of Rs 9,870 crore. Profit after tax saw an even more substantial increase, up 64 percent to Rs 427 crore. Same-store sales growth remained healthy at 20 percent YoY, aligning with market expectations.
Despite a contraction of 80 basis points in Q2 gross margin YoY, settling at 11.9 percent, this figure still exceeded MOFSL's estimate of 11.2 percent. The company noted a one-time gain of Rs 52 crore attributed to an increase in customs duty, alongside a one-time inventory loss of Rs 8.3 crore from open positions in Silver and Platinum, compared to a Rs 21.20 crore gain in the prior Q2.
Adjusted EBITDA and Margin Insights
Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) grew 26 percent YoY to approximately Rs 600 crore, outperforming MOFSL's estimate of Rs 580 crore. The adjusted EBITDA margin saw a slight contraction of 20 basis points YoY, reaching 5.8 percent, against an estimate of 5.9 percent.
Executive Optimism and Market Presence
Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers, expressed confidence in the company's outlook. “The ongoing festive quarter has started off very well and we are very encouraged by the growth on the ground, especially during Navratri and Dhanteras. We are upbeat about the wedding season and look forward to ending the quarter on a strong note,” he stated.
Kalyan Jewellers stands as one of India's largest jewellery retailers, boasting a significant presence not only across India but also in the Middle East, the US, and the UK. The company operates 546 showrooms globally, encompassing a vast retail area exceeding 12,99,000 square feet.