In a land where conversations about gold are as common as cups of chai, Kalyan Jewellers stands as a prominent figure in India’s love affair with this precious metal. In a country where gold isn’t just a shiny metal but also a trusted way to save for life’s unforeseen twists – a bit like our “Plan B” – Kalyan Jewellers has earned its place as a reliable custodian of our golden dreams. With a hint of Indian humor, we often say, “When life hands you lemons, swap them for gold!” Kalyan Jewellers, known for its timeless craftsmanship and an extensive range of exquisite designs, makes this transition not only possible but also delightful.
Kalyan Jewellers in the last 6 months has given a whooping 2.75X returns, and a major reason could be its expansion plan.
As of October 12, 2023, Kalyan Jewellers has expanded its presence to encompass 22 States and Union Territories in India, as well as four countries in West Asia. They are set to introduce 33 new showrooms by the time of Diwali.
So, let’s try and understand Kalyan Jewellers’ growth trajectory and understand if it is a good investment option.
About Kalyan Jewellers India Ltd.
Kalyan Jewellers, established by Mr. T.S. Kalyanaraman, stands as a prominent player in India’s jewelry landscape, capturing a noteworthy 6% share in the organized jewelry market as of FY20. The brand presents a diverse collection to cater to varied customer preferences, spanning wedding jewelry, mid to high-end pieces, and budget-conscious regional jewelry.
Their lineup includes renowned brands like Nimah, Tejasvi, and Ziah, addressing every occasion. In terms of revenue composition, gold products make up 76%, studded products 22%, and other products 2%.
Beyond India, Kalyan Jewellers has expanded its reach, with a presence in five Middle Eastern countries through 33 showrooms. They employ a customer-focused approach with “My Kalyan” centers spanning approximately 990 locations across 21 Indian states and union territories.
It competes with notable peers such as Tanishq, Malabar Gold & Diamonds, and PC Jeweller, offering customers a diverse array of choices in the world of fine jewelry.
Kalyan Jewellers not only sources gold externally but also operates in-house manufacturing facilities in Sharjah and Oman. The company is committed to expansion, particularly in non-south markets, with a strategic goal of achieving a 50% market share by FY24 or FY25.
Q1 Fy2024 Key Points And Summary:
- Kalyan Jewellers achieved over 34% revenue growth in Q1FY24 compared to Q1FY23, driven by strong underlying operational performance.
- New customer acquisitions remained robust, accounting for more than 36% of the customer base.
- The company expanded its presence by opening 12 new showrooms in India during the quarter.
- Showroom gross margins increased year-on-year and remained stable on a quarterly basis.
- A higher proportion of revenue now comes from franchised showrooms, resulting in lower overall gross margins and EBITDA margins.
- Despite this, there was an improvement in the Profit After Tax (PAT) margin, leading to higher PAT growth compared to revenue growth.
- Slight decline in gross margin attributed to a higher share of plain gold revenue.
- Consumer sentiment remains robust, contributing to a significant 22% YoY revenue growth primarily driven by SSSG (Same Store Sales Growth).
Promoters: Promoters have consistently held the majority of shares, maintaining a strong presence of around 60.5% throughout the past year.
Public: The public’s shareholding has remained relatively constant, ranging from 33% to 34.7%. This suggests that the general public’s interest in the company has not significantly fluctuated over the year.
Foreign Institutional Investors : FIIs displayed some volatility in their holdings over the year, with a decline from around 4.8% in March 2021 to approximately 2.87% in September 2021. A remarkable surge occurred in December 2022, with their stake rising to 28.72% before stabilizing at 29.65% in June 2023.
Domestic Institutional Investors : DIIs showed a more consistent trajectory, with a minor dip in September 2022 before steadily climbing to 5.17% in June 2023.
Recommended by Financesrule
| When | Maximum Price | Minimum Price |
| October 2023 | ₹297.09 | ₹250.08 |
| November 2023 | ₹305.77 | ₹246.15 |
| December 2023 | ₹272.89 | ₹202.63 |
Kalyan Jewellers, as of October 12, 2023 is trading at Rs. 274.55 with a marketcap of Rs. 28,275 Crore and a PE ratio of 57.8.
In October 2023, we foresee prices oscillating between ₹250.08 and ₹297.09, followed by a range of ₹246.15 to ₹305.77 in November 2023. Finally, in December 2023, the Kalyan Jewellers share value is predicted to vary between ₹202.63 (minimum) and ₹272.89 (maximum).
These predictions indicate potential price volatility in the coming months, with varying highs and lows.
| When | Maximum Price | Minimum Price |
| January 2024 | ₹257.44 | ₹197.77 |
| February 2024 | ₹232.08 | ₹201.81 |
| March 2024 | ₹236.82 | ₹205.93 |
| April 2024 | ₹229.92 | ₹199.93 |
| May 2024 | ₹226.52 | ₹196.98 |
| June 2024 | ₹234.68 | ₹204.07 |
| July 2024 | ₹232.33 | ₹202.03 |
| August 2024 | ₹241.62 | ₹210.11 |
| September 2024 | ₹251.29 | ₹218.51 |
| October 2024 | ₹246.36 | ₹214.23 |
| November 2024 | ₹253.75 | ₹220.65 |
| December 2024 | ₹260.10 | ₹226.17 |
The future price predictions for the company’s shares, spanning from January to December 2024, indicate an overall positive trend. Kalyan Jewellers share prices are expected to gradually increase throughout the year, with significant upticks projected from August to December 2024.
For instance, in September 2024, the share price is expected to range between ₹218.51 (minimum) and ₹251.29 (maximum), demonstrating a substantial increase. These trends suggest growing investor confidence and potential positive market sentiment.
| Share Price Target 2025 |
Maximum Price | Minimum Price |
| January 2025 | ₹265.30 | ₹204.07 |
| February 2025 | ₹272.10 | ₹209.31 |
| March 2025 | ₹282.71 | ₹217.47 |
| April 2025 | ₹277.17 | ₹213.21 |
| May 2025 | ₹269.10 | ₹207.00 |
| June 2025 | ₹281.20 | ₹216.31 |
| July 2025 | ₹275.69 | ₹212.07 |
| August 2025 | ₹284.22 | ₹218.63 |
| September 2025 | ₹294.16 | ₹226.28 |
| October 2025 | ₹301.81 | ₹232.16 |
| November 2025 | ₹309.36 | ₹237.97 |
| December 2025 | ₹317.09 | ₹243.92 |
Share prices are anticipated to exhibit steady growth in this year, reflecting positive market sentiment and investor confidence.
In January 2025, the share price is expected to range between ₹204.07 (minimum) and ₹265.30 (maximum), marking a significant increase from previous years. This trend continues throughout the year, with prices gradually ascending.
By December 2025, the projected share price is ₹317.09 (maximum) and ₹243.92 (minimum), demonstrating substantial growth potential.
These predictions suggest that 2025 could be a year of robust performance for the company’s shares.
| Year | Maximum Price | Minimum Price |
| 2026 | ₹332.95 | ₹233.06 |
| 2027 | ₹366.24 | ₹256.37 |
| 2028 | ₹512.74 | ₹256.37 |
| 2029 | ₹443.93 | ₹221.96 |
| 2030 | ₹577.11 | ₹403.98 |
In 2026, share prices are expected to range between ₹233.06 (minimum) and ₹332.95 (maximum), suggesting continued upward momentum. This trend appears to strengthen in 2027, with share prices projected to be between ₹256.37 (minimum) and ₹366.24 (maximum), indicating potentially substantial growth.
However, the subsequent years, 2029 and 2030, introduce some price volatility. In 2029, prices are expected to be in the range of ₹221.96 (minimum) to ₹443.93 (maximum). By 2030, share prices are projected to vary between ₹403.98 (minimum) and ₹577.11 (maximum), suggesting both opportunities and potential challenges on the horizon.
Kalyan Jewellers India Ltd. Financial Condition (Last 5 Years)
| Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | |
| Sales + (Crore Rs) |
9,771 | 10,101 | 8,573 | 10,818 | 14,071 |
| Expenses + (Crore Rs) |
9,151 | 9,302 | 7,949 | 9,965 | 12,906 |
| Operating Profit (Crore Rs) |
620 | 799 | 624 | 853 | 1,165 |
| OPM % | 6% | 8% | 7% | 8% | 8% |
| Other Income +(Crore Rs) | 42 | 80 | 45 | 38 | 5 |
| Interest (Crore Rs) | 418 | 419 | 405 | 360 | 353 |
| Depreciation (Crore Rs) |
224 | 239 | 225 | 232 | 245 |
| Profit before tax (Crore Rs) | 21 | 221 | 39 | 299 | 572 |
| Tax % | 123% | 36% | 115% | 25% | 24% |
| Net Profit + (Crore Rs) |
-5 | 142 | -6 | 224 | 432 |
| EPS in Rs | -0.04 | 1.7 | -0.06 | 2.18 | 4.2 |
| Dividend Payout % | 0% | 0% | 0% | 0% | 12% |
Kalyan Jewellers is on a path of steady growth and financial strength. Their sales have been consistently increasing, reaching ₹14,071 crore in March 2023, showing strong customer demand. Efficient cost management has boosted their operating profit margin to 8% in March 2023.
The company’s profit before tax has surged from ₹21 crore in March 2019 to ₹572 crore in March 2023, indicating their financial robustness. They’ve also started paying dividends, with a 12% payout in March 2023, which can attract income-focused investors.
Key financial ratios like Return on Capital Employed (ROCE) and Return on Equity (ROE) are at healthy levels, suggesting efficient utilization of capital and shareholder value creation.
FAQs
What Is The Market Cap Of the Kalyan Jewellers ?
Kalyan Jewellers has a market capitalization of ₹28,275 crore, highlighting its substantial position in the jewellty industry.
It’s projected that the share price could range from ₹204.07 (minimum) to ₹317.09 (maximum) by December 2025.
What Is Kalyan Jewellers’ PE Ratio?
The P/E ratio is 57.8.
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Should One Invest In Kalyan Jewellers?
Kalyan Jewellers‘ financial condition, as reflected in the provided data, offers a mixed but generally positive picture for investors. Over the years, the company has consistently increased its sales, reflecting strong demand for its products. Moreover, its operating profit margins have shown improvement, reaching 8% in March 2023, indicating effective cost management and operational efficiency. This bodes well for profitability.
However, there are areas warranting scrutiny. Notably, there was a significant drop in other income from ₹80 crore in March 2022 to ₹5 crore in March 2023. This decline could potentially impact overall profitability and should be investigated further. Furthermore, while the company has demonstrated impressive profit growth, its net profit margins remain relatively thin. Additionally, the recent entry into dividend distribution, albeit at a modest 12% payout, might be perceived as a cautious approach, leaving investors hoping for more substantial returns somewhat unsatisfied.
The stock’s high P/E ratio of 57.8 may also raise concerns among value-oriented investors, as it implies that the stock may be trading at a premium. It suggests a high level of investor optimism and expectations for future growth, which places a certain level of pressure on the company to meet these expectations.
Nevertheless, Kalyan Jewellers’ healthy financial ratios, including ROCE and ROE, showcase efficient capital utilization and a commitment to creating shareholder value. The compounded profit growth rates underscore the company’s consistent performance over time.
In conclusion, while Kalyan Jewellers exhibits notable strengths in its sales growth, profitability, and operational efficiency, investors should remain cautious about factors like other income, net profit margins, and the relatively high stock valuation. A balanced approach to investment, considering both growth potential and potential risks, is advisable in this context.
What did we learn?
