JM FINANCIAL INITIATES COVERAGE ON KALYAN JEWELLERS: 3 REASONS POWERING THE 20% UPSIDE PREDICTION
JM Financial has launched its coverage on Kalyan Jewellers with a bullish “Buy” recommendation, setting a target price of ₹700, indicating a potential upside of approximately 20% from current market levels. This forecast is backed by strong industry fundamentals, business efficiency, and strategic scalability.
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1. ORGANISED JEWELLERY MARKET EXPANSION OFFERS MASSIVE OPPORTUNITY
India’s jewellery market stands at over ₹6.4 lakh crore (FY24), with only 38% under the organised sector. That figure is set to grow significantly, with the organised jewellery market projected to expand at a CAGR of 20% from FY24 to FY28, surpassing the industry average of 16%.
Kalyan Jewellers, one of the top players in the organised segment, is ideally positioned to gain share as consumers shift from unorganised to branded, trust-based retailers. Its regional dominance, strong brand recall, and expansion plans make it a natural beneficiary of this structural shift.
2. STRONG BRAND MOAT DRIVEN BY TRUST AND INNOVATION
Kalyan has built its reputation on customer-centric policies and transparency. It was among the pioneers to:
Launch BIS-hallmarked jewellery as early as 2006
Implement fully transparent price tags in 2008
Adopt regional branding through local ambassadors for deeper market reach
The ‘My Kalyan’ initiative, a unique non-store channel, contributes a substantial portion of revenue and helps extend its footprint into Tier 2 and Tier 3 cities, keeping
customer acquisition cost-efficient.
The result is a resilient, trust-led model that attracts repeat business and improves margins through long-term customer relationships.
3. ASSET-LIGHT, FRANCHISE-DRIVEN GROWTH MODEL ENHANCES RETURNS
Kalyan’s transformation into a franchise-led (FOCO) model allows the company to expand faster while maintaining capital efficiency. Key benefits of this approach include:
Significant reduction in working capital
Rapid store rollouts without high fixed costs
Improved return on capital employed (ROCE) and stronger free cash flows
In FY25 alone, Kalyan added 74 new stores, with a plan to open 85–90 stores annually through FY28. This strategy helps Kalyan scale profitably while keeping debt and
operating costs under control.
Q3 FY25 PERFORMANCE SUPPORTS BULLISH OUTLOOK
Kalyan Jewellers delivered strong Q3 FY25 results, reaffirming the structural tailwinds:
Revenue surged 39% YoY to ₹7,287 crore
Profit After Tax grew 21% YoY to ₹219 crore
Candere, its digital arm, reported an 89% YoY revenue increase
The management also reaffirmed aggressive expansion plans, including both offline store additions and e-commerce growth, indicating strong operational momentum.
FREQUENTLY ASKED QUESTIONS (FAQ)
Q1: Why did JM Financial issue a ‘Buy’ rating on Kalyan Jewellers?
Because of its strong positioning in the growing organised jewellery market, its asset-light strategy, and consistently improving financial performance.
Q2: What is the upside potential for Kalyan Jewellers as per JM Financial?
A target price of ₹700 has been set, indicating around 20% upside from current market levels.
Q3: What is the significance of the ‘My Kalyan’ initiative?
‘My Kalyan’ is a non-store customer outreach model that extends brand presence into semi-urban and rural areas, contributing significantly to revenue without traditional overhead.
Q4: How does the FOCO model help Kalyan’s growth?
It reduces capital investment and debt burden, enables rapid expansion, and boosts profit margins through franchise-led scalability.
Q5: Is Kalyan Jewellers focused only on physical retail?
No, it is also expanding digitally through Candere and integrating online–offline channels to capture the evolving jewellery buyer segment.
Published on: July 15, 2025
Published by: PAVAN
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