All-round beat; growth momentum continues
Kalyan Jewellers’ (KALYANKJ) consolidated revenue reported stellar 42% YoY growth to INR103.4b (est. INR97.9b). The Indian business achieved 42% YoY growth, driven by store additions (added a net of 18 Kalyan Indian stores and 14 Candere stores) and robust 27% SSSG (25% in the South, 29% in the non-South).
Management indicated that on-ground demand momentum remained healthy in 3QFY26. During the 30 days leading up to Diwali, the company reported LFL growth of over 30%, reflecting strong festive traction. Demand in Jan’26 also remained robust, supported by healthy consumer footfalls despite volatility in gold prices.
Studded share remained stable at 31% in 3QFY26 vs 30% in 3QFY25. Studded revenue surged 50% YoY. The company is witnessing strong adoption of 18 carat jewelry, leading it to planned launches in the 14 carat and 9 carat studded segments.
In the India business, adjusting for the customs duty impact in the base, GM was flat YoY at 12.7%. Despite a higher franchise mix, flat GM indicates an improvement in underlying GM. This was driven by a favorable product mix, procurement efficiencies, and inventory gains from silver and platinum products (contribution of ~2-3% to Indian revenue). EBITDA margin expanded 60bp YoY to 7.2% (est. 6.5%). PBT margin expanded 100bp YoY to 6.4% (all-time high). PBT jumped 68% YoY.
The Middle East business delivered 28% revenue growth, driven by 24% SSSG. Studded share was 18%. There was one new store addition in the UK in 3QFY26.
With the successful scale-up of franchise businesses (>50% revenue contribution) and stable success in non-Southern markets, the company has established itself as a leading brand in the industry. Consistent success on customer acquisition, improving operating margin, and deleveraging balance sheet remain the key rationale for our constructive view on the business. We model a 21%/18%/22% revenue/EBITDA/PAT CAGR during FY26-28E. We reiterate our BUY rating with a TP of INR600 (based on 35x Dec’27 P/E).
