Kalyan Jewellers shares rally 10% after strong Q3; analysts outline re-rating triggers

Shares of Kalyan Jewellers India Ltd. gained as much as 10% on Monday, February 9, after the Thrissur-based jewellery maker delivered a strong set of December quarter numbers.

For Q3, Kalyan Jewellers reported a 42.1% year-on-year jump in revenue to ₹10,343.4 crore, compared with ₹7,278 crore in the year-ago period.

Profit after tax surged 90.4% year-on-year to ₹416.2 crore, against ₹218.6 crore in Q3FY25.

Operating performance improved, with EBITDA rising 74.6% to ₹750.4 crore from ₹429.9 crore last year. EBITDA margins expanded to 7.3% from 5.9%.

Key internals

The jewellery maker's same-store sales growth stood at 27%, while the share of studded jewellery improved to 31.2% from 29.5% a year ago.

Non-south markets continued to drive growth, contributing 58.5% of total revenue during the quarter.

The company said margin expansion was supported by a favourable mix, operating leverage and gains in categories such as silver and platinum.

Brokerage firm HSBC has a 'Buy' rating on Kalyan Jewellers, with a price target of ₹650. The brokerage said Q4 demand trends remain strong.

HSBC said that a regional brand is slated to be launched in Q4, while debt remained flat QoQ and is on track with FY26 guidance. The land sale is expected to conclude by H1FY27.

While performance remains strong, recent volatility has led to a lower target multiple, it added.

Meanwhile, Citi has also maintained a 'Buy' rating on the stock but cut its price target to ₹650 from ₹750.

The brokerage said sustained execution on growth, profitability, and balance sheet deleveraging will be key for a re-rating of the stock.

All nine analysts tracking Kalyan Jewellers have a 'Buy' rating on the stock. The consensus estimate of price targets implies a potential upside of 67% from current levels.

Kalyan Jewellers shares ended Friday's session 1.21% higher at ₹380.70. Despite the recent rebound, the stock is still down about 38% from its 52-week high and is currently trading at around 26x FY27E earnings.