Kalyan Jewellers: Decoding Growth, Margins & Future Strategy

Kalyan Jewellers (KALYANKJIL ) delivered a strong quarter, driven by festive demand, over 20% SSSG and healthy volume growth despite single-digit gold price inflation. Organised retail and rising preference for studded jewellery remain key growth drivers. India leads, while Middle East profitability remains a monitorable. Management Strategy & Outlook: •Demand & Growth: Q3 started strongly, with healthy Navratri and Dhanteras sales. Management retains 25% annual revenue growth as its planning benchmark, supported by 10% SSSG and store additions. This is the target, not formal guidance. •Store Productivity: Cash flows will support additional inventory at existing showrooms to drive SSSG. •ATM Expansion: Four more Tamil Nadu showrooms planned in FY27. Management wants to establish the brand locally before entering other states. •Product Mix: Focus on increasing studded jewellery contribution amid changing consumer preferences. •Margins: The encashment programme alongside gold exchange is expected to support margins. • Capital Allocation: Non-GML debt repayment is complete. Focus remains on existing stores and selective flagship additions rather than aggressive expansion. H2 PBT margins are expected to improve over H1 while remaining broadly stable YoY. Technical View: The stock has broken above ₹635 resistance, supported by strong volumes. While the setup is positive, a pullback towards ₹635 with confirmation of support could offer a better entry opportunity. Investor Takeaway: Growth is increasingly driven by existing-store productivity, volume expansion and market-share gains rather than just gold price appreciation or new stores. Gradual ATM expansion and a rising studded jewellery mix provide additional growth levers. However, sustaining SSSG, protecting margins and improving Middle East profitability will be critical to delivering consistent earnings growth. Source: Q2 Investor Presentation, Unaudited Financial Results and Q2 FY27 Earnings Conference Call