Kalyan Jewellers share price has reached new highs, with research houses, including HSBC, upgrading their outlook on the company. Despite an impressive 945% surge in the past three years, HSBC believes Kalyan’s value creation journey is far from over, predicting a further 17% upside. Key drivers include its capital-light expansion, national brand status, and potential to scale its operations significantly. HSBC has raised its target price from Rs 600 to Rs 810, citing Kalyan’s robust growth prospects, competitive positioning, and long-term margin expansion opportunities.

Kalyan Jewellers Stock Price Reaches New High

Stock Hits 52-Week High amid strong buying
Kalyan Jewellers' stock surged to a 52-week high of Rs 749 during Friday’s trading session, marking a significant gain from its opening price of Rs 697. The stock closed the session at Rs 720 on the National Stock Exchange (NSE), reflecting the strong buying momentum driving the price upward.

Impressive Growth Over Recent Years
Despite already rallying eightfold in the past two years, Kalyan Jewellers' stock has seen a remarkable rise of 945% over the past three years. However, analysts at HSBC believe the stock’s growth journey is only halfway complete, with substantial room for further upside.

HSBC Raises Target Price and Predicts Further Upside

Potential for 17% Upside
HSBC has upgraded its target price for Kalyan Jewellers to Rs 810 from Rs 600, suggesting a 17% potential upside from current levels. The brokerage maintains a 'Buy' rating on the stock, indicating its optimism about Kalyan’s growth prospects.

Long-Term Growth Drivers
HSBC cites several long-term growth catalysts for Kalyan Jewellers, drawing comparisons to Titan, another prominent player in the jewellery sector. The brokerage views Kalyan as being in the early stages of its value creation journey, with significant expansion potential in the years ahead.

Kalyan's Expansion Strategy: Capital-Light and Nationwide

Store Count Poised for Expansion
Currently, Kalyan operates 217 stores, less than half of Titan’s network. HSBC sees potential for Kalyan to quadruple this figure over the next decade, driving continued industry-leading revenue growth. The company’s capital-light expansion strategy makes it a compelling compounding opportunity for investors.

Establishing a National Brand
Kalyan Jewellers has successfully positioned itself as a national brand, differentiating itself from regional competitors. This strong brand identity allows Kalyan to expand its presence across India, capitalizing on its pan-India expansion strategy.

Competitive Positioning and Disruptive Potential

Aspirational Yet Value-Driven
HSBC notes that Kalyan’s aspirational yet value-driven positioning makes it resilient to disruptive competition. In fact, Kalyan is seen as somewhat of a disruptor itself, reshaping the value proposition within the organized jewellery segment.

Scaling Candere and Expanding Market Share
Kalyan's online jewellery platform, Candere, presents another growth opportunity. HSBC sees parallels with Titan’s successful Caratlane venture and believes scaling Candere could further boost Kalyan’s stock performance, enhancing its presence in the studded jewellery market.

Long-Term Margin Expansion and Value Creation

Owned Stores and Margin Growth
With Kalyan achieving significant scale, HSBC sees an opportunity for the company to open more owned stores, particularly in lucrative markets. This shift from franchised to owned stores could trigger long-term margin expansion, providing a sensitive lever for value creation.

Cost Efficiencies and Trade Terms
HSBC also highlights potential cost efficiencies as Kalyan’s track record strengthens, particularly with favorable terms in areas like gold loan interest rates. These factors are expected to contribute to further margin tailwinds.

Attractive Valuations Relative to Peers

Comparison to High-Growth Peers
Despite its rapid growth, Kalyan Jewellers remains attractively valued compared to other high-growth companies such as DMart and Titan. At a projected FY26 price-to-earnings (PE) ratio of 56x, Kalyan still offers compelling value relative to peers with similar growth dynamics.

Strong Investor Interest and Rising ROE
A growing investor base has also contributed to a lower hurdle rate for Kalyan, as its return on equity (ROE) has consistently improved. HSBC notes that Kalyan’s growth appears structural, supported by its strong financial performance and expansion strategy.