Kalyan Jewellers shares were trading at Rs 558.25 apiece on the NSE on Thursday, down 1.85% from the previous close of Rs 568.80.
According to Jefferies analysts Vivek Maheshwari, Kedar Gattani and Rushabh Bhachawat, Kalyan remains a relatively small player in a jewellery market worth more than $100 billion, with around 60% of the category still unorganised.
The brokerage said this provides the company with a long runway for store expansion and market-share gains.
Regulatory formalisation, mandatory hallmarking and improving consumer preference for trusted brands continue to support the shift towards organised retail, the analysts said.
ALSO READ:TCS Q2 results: Ready for the big move? Here's how to trade the IT stock on results day
Bull case puts Kalyan target at Rs 1,000
In its base-case scenario, Jefferies has set a target price of Rs 830, implying an upside of 46% from the current market price.The brokerage expects revenue to grow at an annual rate of 23% between FY26 and FY29E, with some improvement in EBITDA margins. It expects EPS to rise at around 21% CAGR, supported by strong jewellery revenue growth. Jefferies values Kalyan at 38 times September 2028 estimated earnings to arrive at the Rs 830 target.
Under its bull-case scenario, the brokerage sees the stock reaching Rs 1,000, implying a 76% upside.
In our bull case, we forecast 26% annual growth in revenue over FY26-29E, with some improvement in EBITDA margins. We forecast EPS to rise at 23% CAGR, supported by strong jewellery revenue growth, Jefferies said.
The brokerage values Kalyan at 45 times September 2028 estimated earnings under the bull-case scenario.
In the bear-case scenario, Jefferies has assigned a target price of Rs 500, representing a 12% downside. It forecasts revenue growth of 18% annually during FY26-29E and EPS growth of around 18%, valuing the company at 25 times September 2028 estimated earnings.
Gold prices and wedding demand key upside triggers
Jefferies identified stability in gold prices alongside government regulations, strong demand, particularly during wedding seasons, and increasing formalisation of the jewellery sector as key upside catalysts.The brokerage also expects continued market-share gains to support the company's growth.
Gold volatility and regulatory changes remain key risks
On the downside, Jefferies flagged sharp volatility in gold prices, adverse regulatory changes related to gold imports, taxation and gold metal loans, and a slowdown in overall economic consumption as key risks.Trust-led, hyperlocal model at the heart of Kalyan's strategy
During its interaction with Ramesh Kalyanaraman, Jefferies highlighted Kalyan's evolution from a single-store business to more than 540 outlets globally. Management emphasised that jewellery is fundamentally a relationship-driven business, with credibility and trust building over time. Transparency, customer education and long-term relationship-building were highlighted as key competitive advantages.Kalyan's hyperlocal approach to inventory, pricing and marketing has been shaped by differences in jewellery consumption across markets. This allows the company to operate like a regional jeweller while benefiting from national scale.
Management does not envisage any material change in Kalyan's core business strategy, with store additions, market-share gains and execution expected to remain key growth drivers, according to Jefferies. Given Kalyan's relatively small share of a large and fragmented jewellery market, the brokerage sees significant room for further growth.
Jefferies also highlighted Kalyan's measured approach to expansion and capital allocation, including franchising and initiatives such as Candere and regional brands. Governance, board oversight, institutional ownership, reputed auditors and transparent investor communication were also highlighted in the interaction.
Disclosure: This article has been written by Kumar Gaurav, who is not a Sebi-registered Research Analyst or an Investment Adviser. Gaurav and their ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective Sebi-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclaimers here
Add as a Reliable and Trusted News Source Add Now!
(You can now subscribe to our ETMarkets WhatsApp channel)