After a sharp 35% correction in the past year, brokerage major ICICI Securities believes the glitter is returning for Kalyan Jewellers India. The brokerage has upgraded the stock to Buy from Add, with an unchanged target price of INR 670, implying a potential 37% upside from current levels near of INR 489.
ICICI Securities sees favourable risk-reward, strong earnings visibility, and structural growth tailwinds that could help Kalyan outperform peers in the coming quarters.
🔍 Why ICICI Securities Is Bullish on Kalyan Jewellers
| Key Growth Driver | Brokerage View |
|---|---|
| Stock correction offers value | ~35% fall in past year creates margin of safety |
| FOCO model expansion | 90 new stores planned in FY26, asset-light scaling |
| Candere omni-channel growth | 81 stores, SRK as brand ambassador, PAT positive by FY26 |
| Debt reduction & efficiency | INR 350–400 Cr reduction expected in FY26 |
| Steady festive demand | Double-digit same-store sales growth (SSSG) forecast for FY26 |
🛍️ Festive and Wedding Demand Keeps the Sparkle Alive
Despite gold prices rising 42% year-on-year, demand for jewellery remains resilient. ICICI Securities expects double-digit SSSG in FY26, supported by:
- The festive and wedding season starting earlier this year, boosting footfalls;
- Introduction of lower-carat, lightweight jewellery making purchases more affordable;
- Preponement of demand into the Navratri season, offsetting a high base from last year.
This resilience, the brokerage notes, underscores strong brand recall and pricing power, even amid elevated gold prices.
🏪 Aggressive, Asset-Light Expansion Through FOCO Model
A major reason behind ICICI’s optimism is Kalyan’s franchise-owned, company-operated (FOCO) model — a capital-efficient strategy enabling rapid scale-up with limited capital outlay.
- Over FY23–25, Kalyan added 152 new showrooms under this model.
- FY26 target: 90 new stores, largely FOCO-driven.
- Current global footprint: 287 stores (161 FOCO, 126 COCO).
This rollout has driven improving returns on capital, with RoCE rising from 10.4% in FY24 to an estimated 16.4% by FY27, as per ICICI Securities.
🌐 Candere: From Digital Brand to Omni-Channel Powerhouse
Kalyan’s online-first subsidiary Candere continues to be a fast-growing lever.
- Now at 81 stores (41 FOCO), up from just 11 two years ago.
- Added 70 stores in 18 months and plans 80 more in FY26.
- Achieved INR 190 crore trailing-twelve-month revenue and is on track to turn PAT positive by FY26-end.
The move to an omni-channel model — integrating online discovery with physical experience — is expected to broaden Kalyan’s younger customer base and enhance long-term growth visibility.
💰 Financials: Strong Growth, Cleaner Balance Sheet
ICICI Securities expects 28–38% CAGR in revenue and profit over FY25–27, driven by operational leverage and working-capital efficiency.
| Metric | FY24A | FY25A | FY26E | FY27E |
|---|---|---|---|---|
| Revenue | 18,515.6 | 25,045.1 | 32,524.7 | 40,862.2 |
| EBITDA | 1,279.9 | 1,641.2 | 2,146.4 | 2,672.2 |
| Net Profit | 597.3 | 838.8 | 1,201.5 | 1,602.2 |
| EPS Growth YoY (%) | 28.2 | 40.4 | 43.3 | 33.4 |
| RoE (%) | 15.3 | 18.7 | 22.2 | 23.4 |
The brokerage highlights a planned INR 350–400 crore debt reduction in FY26, maintaining a net-debt-to-equity ratio of just 0.02x.
Inventory turns improved to 3.2x, and capex remains contained at ~INR 150 crore.
Together, these factors underscore healthy cash generation and disciplined capital allocation.
Regional Strategy and Market Deepening
Kalyan plans to launch region-specific jewellery brands in 2025, offering designs and marketing tailored to local cultural preferences — especially in South India and Tier-2 markets.
ICICI Securities believes this “hyperlocal” approach will enhance market share while maintaining Kalyan’s premium brand image.
📈 Valuation & Outlook
ICICI Securities maintains a DCF-based fair value of INR 670, valuing the stock at 43× FY27E EPS.
With structural demand, leaner operations, and a strong brand portfolio, the brokerage sees the risk-reward turning decisively favourable.
Key Risks:
- Slower-than-expected store rollouts, and
- Intensifying competition in South India.
Yet, with consistent execution and steady festive momentum, these risks remain manageable, ICICI Securities noted.
Kalyan Jewellers Post IPO Performance
Kalyan Jewellers launched its IPO in March 2021, raising INR 1,175 crore through a combination of an INR 800 crore fresh issue and an INR 375 crore offer for sale (OFS). The IPO received a strong investor response, achieving a subscription of 2.6 times. However, its market debut was subdued, with the stock listing at a 13.6% discount to the issue price.
After trading sideways for nearly a year, the stock embarked on a remarkable upward trajectory, reaching an all-time high of INR 795.40 per share on January 1, 2025 — delivering an impressive return of approximately 960% from its listing-day close of INR 75 per share. As of now, Kalyan Jewellers shares are trading around INR 485 per share, reflecting a correction of about 39% from the recent peak.
🔔 The Bottom Line: “We reiterate our positive stance on Kalyan Jewellers as it may continue to outperform peers, backed by strong expansion, omni-channel initiatives, and improving financial metrics,” ICICI Securities wrote in its note.
After a challenging year, Kalyan Jewellers’ shine may indeed return, as the company combines steady consumer demand, disciplined growth, and scalable efficiency. At current valuations, the stock offers investors a compelling 37% upside potential — making it one of the more glittering opportunities in India’s consumer discretionary space.
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