Share Price Surge

Shares of Kalyan Jewellers experienced a notable increase of 6% following a report from brokerage firm Citi, which emphasized the company’s growth in the first quarter. The stock price reached an intraday high of Rs 377.7, equating to a 6.4% rise. By 11:06 am, the shares were trading 4.44% higher, while the benchmark Nifty 50 index reported a decline of 0.45%.

Citi has maintained a ‘buy’ rating for Kalyan Jewellers, setting a target price of Rs 750. This target indicates a potential upside of 108% from the stock’s opening price of Rs 360 earlier in the week. The brokerage reassured its long-term growth outlook remains strong, despite Kalyan Jewellers’ revenue growth in June falling short of expectations.

Quarterly Growth Highlights

In a filing to the exchanges on Tuesday, Kalyan Jewellers reported that its consolidated revenue grew approximately 38% year-on-year. This growth was significantly attributed to strong operating performance in India, which displayed a same-store sales growth of 28% across key markets. However, this revenue growth for the April to June quarter was below Citi’s anticipated growth of 45%.

Furthermore, Kalyan Jewellers’ international operations showed a revenue increase of around 35% compared to the same quarter of the previous financial year. The brokerage noted that revenue from international markets constituted 14% of the consolidated revenue. Notably, no new stores were inaugurated in these international markets during the quarter.

Performance in the Middle East and Digital Expansion

Specifically in the Middle East, Kalyan Jewellers experienced approximately 30% revenue growth in Q1 FY2027 as compared to the same quarter in FY2026. This growth was largely driven by same-store sales, despite ongoing geopolitical tensions in the region.

In addition, the company’s digital-first jewellery platform, Candere, reported a remarkable revenue growth of nearly 112% for Q1 FY2027 when compared to the same period last year. During this quarter, Kalyan Jewellers opened 12 new showrooms and 5 new Candere showrooms across India.

Future Growth Prospects and Risks

Citi analysts believe that ongoing expansion of franchise-led stores is crucial to driving robust growth, improving the balance sheet, and enhancing return on capital employed (RoCE) for Kalyan Jewellers. However, the brokerage has also identified several key risks that could affect the company’s growth prospects.

One notable risk is that Kalyan Jewellers’ revenue growth has fallen behind that of Titan for the first time in 13 quarters. Additional concerns include potential slowdowns in the demand environment, delays in reducing debt on the balance sheet, and possible deviations from the strategy of expanding asset-light franchise stores.

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