Kalyan Jewellers India Ltd witnessed a remarkable 9.31% surge in share price today, reaching a high of Rs 481.30. Despite this, the stock remains down by 38.47% in January. Leading financial firm Motilal Oswal Financial Services (MOFSL) has maintained its 'Buy' rating, forecasting a potential upside of 42%.
Stock Performance & Analyst Ratings
Kalyan Jewellers' strong December quarter results have fueled investor optimism. MOFSL has reaffirmed its bullish outlook on the stock, citing the successful scale-up of its franchise model, which now contributes 40% of its total revenue. The brokerage firm has set a target price of Rs 625, backed by the company’s expansion in non-southern markets and increasing international presence.
Key Growth Drivers
- Non-South Market Expansion – The company’s focus on northern and western India has led to a higher mix of studded jewelry sales, boosting profit margins.
- Asset-Light Franchise Model – This strategy enhances cash flow, aids debt repayment, and reduces interest costs, improving overall profitability.
- International Presence – Kalyan Jewellers is gaining momentum in the Middle East and the US, further strengthening its brand position.
Challenges & Market Risks
MOFSL notes that while Kalyan Jewellers is on a growth trajectory, the slowdown in urban markets could impact discretionary spending in FY26. As a result, the firm has adjusted its valuation multiple to 50x December 2026 EPS.
Financial Highlights – Q3 FY25
- Revenue Growth – 40% YoY increase, in line with market estimates.
- Gross Margins – Indian business margins contracted by 170 basis points (bps) to 12.8% due to increased franchise store contributions.
- Inventory Adjustments – Margins were affected by inventory losses, but the company continues to manage costs effectively.
Stock Market Sentiment & MOFSL’s Stand
Despite recent volatility, MOFSL remains confident in Kalyan Jewellers' long-term potential. The firm has dismissed recent allegations of unethical investment practices as baseless and reaffirmed its commitment to transparency.
Should You Invest?
Investors looking for a robust stock with strong fundamentals, an expanding market presence, and a promising growth trajectory may find Kalyan Jewellers an attractive option. However, it’s advisable to consult a financial expert before making investment decisions.
Disclaimer -- These article does not provide any recommendation, investors are requested to consult there financial advisor before making any investment decisions.