Kalyan Jewellers Share Price Target at Rs 786: BOB Capital Markets
BOB Capital Markets has upgraded Kalyan Jewellers to BUY from HOLD with a target price of Rs 786, implying about 18% upside from Rs 664. The jeweller's September-quarter consolidated revenue rose 31% to Rs 10,323 crore and EBITDA grew 30% to Rs 645 crore, while profit rose 64% to Rs 427 crore, helped by a one-time gain of Rs 73.5 crore from a land sale. Same-store sales grew strongly despite high gold prices, studded jewellery held near 31% of India revenue, and the brokerage raised its FY27-29 EBITDA estimates by 12-15%. The target values the stock at 35 times September 2028 estimated earnings.
BUY · UPGRADED FROM HOLDQ2FY27 Result ReviewRetail · Jewellery
Kalyan Jewellers: BOB Capital Markets Upgrades to BUY, Sets Rs 786 Target as Festive Demand Glitters
Strong same-store sales, a steady studded mix and an asset-light store rollout persuade the brokerage to lift estimates and move off the sidelines.
Target
Rs 786
+18%
CMP Rs 664 · 52-wk Rs 327 to Rs 689
Price as of Nov. 11, 2026
Five hallmarks of the quarter
REV · 916
+31%
Revenue Rs 10,323 crore
EBITDA · 916
+30%
Rs 645 crore, margin 6.2%
PAT · 916
+36%
Rs 354 crore before land gain
SSSG · 916
16-20%
India same-store growth
STUD · 916
30.9%
Studded share, India
Demand outran the gold price. Kalyan Jewellers reported consolidated revenue of Rs 10,323 crore, up 31% year over year, and adjusted revenue of Rs 9,943 crore after stripping out bullion sales, customs duty and exceptional items. EBITDA rose 30% to Rs 645 crore, with adjusted EBITDA at Rs 593 crore. All three lines beat BOB Capital Markets' own forecasts, by 3.5% on revenue, 6.2% on EBITDA and 8.6% on profit.
The home market did the heavy lifting. India revenue climbed 32% to Rs 9,007 crore and India profit jumped 62% to Rs 424 crore. The brokerage notes that customers shop to a budget: they hold their spending steady and buy more grams when gold softens. With gold-price inflation only in single digits, strong same-store growth translated into genuine volume growth, which management says has carried into the third quarter.
The assay report
| Particulars | Q2FY27 | Q2FY26 | YoY | Q1FY27 | QoQ |
|---|---|---|---|---|---|
| Operating income | 10,323 | 7,856 | +31.4% | 10,589 | -2.5% |
| Gross profit | 1,273 | 1,017 | +25.3% | 1,264 | +0.8% |
| Employee expense | 309 | 218 | +41.7% | 315 | -2.1% |
| Advertisement expense | 115 | 141 | -18.5% | 117 | -1.4% |
| EBITDA | 645 | 497 | +29.7% | 633 | +1.9% |
| EBITDA margin | 6.2% | 6.3% | -8 bps | 6.0% | +27 bps |
| PBT | 487 | 350 | +38.9% | 465 | +4.7% |
| PAT before land gain | 354 | 261 | +35.7% | 349 | +1.4% |
| PAT including Rs 73.5 crore gain | 427 | 261 | +63.9% | 349 | +22.5% |
The report's table labels these two profit rows the other way round; TopNews has relabelled them. See the Editor's Note.
Operating leverage, with a caveat. Gross margin slipped 60 basis points to 12.3%, but a lower advertising bill held the EBITDA margin almost flat at 6.2%. Employee costs rose faster than sales as the network expanded. For the first half, revenue grew 38% to Rs 20,912 crore and profit rose 48% to Rs 776 crore.
What customers brought to the counter
Old-gold exchange counter · recycled gold as share of India revenue
Q2FY26 · 29%
Q1FY27 · 46%
Q2FY27 · 42%
Dark segment: old gold exchanged. Light segment: rest of India revenue.
The solitaire · studded share
30.94%
Diamonds, polki and uncut jewellery as a share of India revenue, broadly stable year over year.
Exchange-led dilution looks like a one-off. Recycled gold made up 42% of India revenue, down from 46% in the first quarter but well above 29% a year earlier. Management called the first-quarter margin squeeze from heavy exchanges a one-time adjustment. Its gold-for-cash programme, which now accounts for about 7-8% of business and earns better margins, is helping to offset the effect.
Younger buyers keep the studded story intact. Studded pieces, which carry richer margins than plain gold, held at 30.94% of India revenue. BOB Capital Markets sees a lasting shift towards diamonds, polki and uncut jewellery among younger consumers, alongside the continued move from unorganised jewellers to branded chains.
Stringing 140 new stores
FY27 opening plan · one bead = 5 showrooms
6 international
50 Candere
India network at September end · 365 showrooms
Asset-light by design. Kalyan added 12 showrooms (11 net) in India during the quarter, taking its domestic network to 365, of which 246 run under the franchise-owned, company-operated (FOCO) model. Partners fund the stock and the store while Kalyan runs the counter, which lets the chain expand faster without stretching its own balance sheet. Management reiterated its FY27 plan for 84 Kalyan showrooms in India, six abroad and 50 Candere outlets, with openings tilted towards the second half and especially the fourth quarter.
Beyond the core counter
Tray 1 · Middle East
Rs 960 crore revenue
Revenue grew about 11% on same-store growth near 12%. EBITDA rose 15% to Rs 71 crore, but profit fell 19% to Rs 12 crore on higher finance costs. Kalyan runs 38 showrooms there and is talking to investors about a larger FOCO partnership.
Tray 2 · Candere
About Rs 545 crore
The lightweight, digital-first brand grew revenue about 61%. It is the vehicle for 50 of this year's planned openings, through a mix of company-owned and franchise formats.
Tray 3 · Akshaya Thanga Maligai
4 more stores in FY27
The new brand's first showroom in T. Nagar, Chennai, opened in August and beat initial expectations over the festive period. Two stores follow in each of the third and fourth quarters, all in Tamil Nadu for now.
Unlocking the balance sheet
LOCKER 01
Rs 0
Non-gold-loan debt, fully repaid
LOCKER 02
Rs 1,190 cr
Standalone debt, all gold metal loans
LOCKER 03
~Rs 87 cr
Non-core land parcel sold
LOCKER 04
Rs 16 cr
Second parcel, due in Q3FY27
LOCKER 05
~Rs 200 cr
Property collateral to be released in FY27
Cash goes back into the shelves. With non-gold-loan borrowings cleared, management plans to use internal cash flow and freed-up collateral to stock existing showrooms more deeply and to invest in select flagship stores, rather than to fund a new borrowing cycle.
Estimates polished higher
BOB Capital Markets raised its FY27-29 revenue estimates by 8-12% and EBITDA by 12-15%, citing faster store openings, durable double-digit demand and a bigger contribution from markets outside southern India. It now expects revenue and earnings per share to compound at 25% and 24% a year over FY26-29.
| Rs crore | FY27E new | FY27E old | FY28E new | FY28E old | FY29E new | FY29E old |
|---|---|---|---|---|---|---|
| Revenue | 45,875 | 42,580 | 58,120 | 51,990 | 70,330 | 63,510 |
| EBITDA | 2,782 | 2,480 | 3,583 | 3,120 | 4,431 | 3,840 |
| EBITDA margin | 6.1% | 5.8% | 6.2% | 6.0% | 6.3% | 6.0% |
| Adjusted PAT | 1,634 | 1,310 | 2,082 | 1,680 | 2,557 | 2,040 |
| EPS (Rs) | 15.8 | 12.7 | 20.2 | 16.3 | 24.8 | 19.8 |
| P/E at Rs 664 | 42.0x | 32.9x | 26.8x | |||
Earnings estimates rise 24-25% in each year. Source: BOBCAPS Research, converted to Rs crore by TopNews.
Margins reset before they rebuild. The forecast FY27 EBITDA margin of 6.1% is below the 7.0% reported for FY26, which reflects the heavier exchange mix and the cost of a fast rollout. The brokerage then sees the margin edging up to 6.3% by FY29. Management expects profit-before-tax margins to stay stable in the second half, which is seasonally stronger than the first.
Today's rate for investors
Kalyan Jewellers · rate board
Rating: HOLD → BUY
The call. BOB Capital Markets upgrades Kalyan Jewellers to BUY with a 12-month target of Rs 786, worth about 18% upside from Rs 664. The target applies 35 times estimated earnings for the 12 months to September 2028, about Rs 22.5 a share. The brokerage's BUY rating requires an expected return above 15%.
For investors. The stock trades near its 52-week high of Rs 689, after nearly doubling from a low of Rs 327, so the upgrade rests on earnings delivery rather than on a cheap entry price. Investors with a 12-month horizon can treat Rs 786 as the target, with the 52-week high as the first test along the way. At about 42 times FY27 earnings, the stock leaves little room for a slowdown in same-store growth.
Into the third quarter. Management says the first 40 days of the quarter saw excellent demand and volume growth around Navratri and Dhanteras. It works towards roughly 25% annual revenue growth and a long-term same-store growth aim of about 10%, and expects to beat this year's growth target. The market value is about Rs 68,600 crore, with promoters holding 63%.
Flaws to inspect under the loupe
Printed risk · downside
Gold and regulation. A steep rise in gold-price volatility, or regulatory changes in the bullion and jewellery trade, could unsettle demand and margins.
Printed risk · downside
Rollout and franchisees. Slower-than-planned store openings, or franchise partners ending agreements early, would undercut the growth the estimates assume.
Printed risk · upside
Market share. Faster share gains in India, as buyers move to branded chains, would lift earnings above the forecasts.
TopNews watch
Inventory-hungry cash flow. The brokerage's model shows operating cash flow of Rs 3,787 crore in FY27 turning to an outflow of Rs 2,180 crore in FY28 as inventory swells to Rs 17,725 crore, while borrowings climb to about Rs 8,090 crore by FY29.
Editor's Note
TopNews found these inconsistencies in the report and has not silently resolved them:
1. Same-store growth. The front page puts India same-store growth at 16%; the earnings-call section gives about 20%, with South and non-South at about 19% and 21%, and elsewhere says growth was "over 20%." This article shows the range.
2. Profit rows. The quarterly table labels Rs 354 crore as reported profit and Rs 427 crore as adjusted profit. Since PBT less tax equals Rs 354 crore and the Rs 73.5 crore land gain explains the gap, the labels appear reversed. The text also gives profit excluding the gain as Rs 333 crore, which does not match Rs 427 crore less Rs 73.5 crore; this article uses Rs 354 crore, which also appears in the brokerage's actual-versus-estimate table.
3. FY27 adjustment. The income statement adds the Rs 73.5 crore one-time gain to reported FY27 profit to reach "adjusted" profit of Rs 1,634 crore (EPS Rs 15.8). A clean figure would normally exclude a one-time gain; reported FY27 EPS is Rs 15.1. The target rests on FY28-29 estimates, so it is not affected.
4. India revenue growth. The text gives India revenue growth of 32%, but the revenue-growth chart appears to show 27.2% for Q2FY27.
5. Middle East growth. The front page says 12%; the call summary and chart say 11%. This article uses 11%.
6. Return on equity. The ratio table shows adjusted ROAE of 24.9%, 23.6%, 24.8% and 24.9% for FY26-29, while the DuPont table on the same page shows 21.9%, 21.6%, 22.5% and 22.6%.
7. Units. The actual-versus-estimate table carries a smaller unit label than its figures, which (revenue 10,322.6) are in Rs crore.
Sources
BOB Capital Markets (BOBCAPS), Kalyan Jewellers Q2FY27 Result Review, "Strong demand sustains growth," Nov. 11, 2026; Lavita Lasrado, research analyst, and Nistha Pala, research associate. Kalyan Jewellers Q2FY27 earnings call commentary as reported therein. Price data from NSE as of Nov. 11, 2026.
Method: figures converted from the report's international units to Rs crore. The market value of about Rs 68,600 crore is derived by TopNews from the share count in the report's balance sheet and the Rs 664 price, in place of the report's dollar figure. The September 2028 EPS is the average of the FY28 and FY29 estimates. The bead strand, exchange bars and studded ring are drawn to scale from the report's figures.
Disclaimer: This TopNews Stock Report is based on a brokerage research report and is for information only. It is not investment advice. Investments in securities markets are subject to market risks; read all related documents carefully and consult a registered adviser before investing.
