Is Kalyan Jewellers set for a comeback? ICICI Sec says Buy, 38% upside eyed

Analysts at ICICI Securities believe Kalyan is well-positioned to outperform peers, backed by aggressive store expansion through its asset-light FOCO model

Kalyan Jewellers India share price today: Domestic brokerage firm ICICI Securities has upgraded its rating on Kalyan Jewellers stock to 'Buy' from 'Add', citing a more than 35 per cent correction in the stock over the past year, which, in its view, offers a meaningful margin of safety. The brokerage expects the company to report strong same-store sales growth (SSSG) in FY26, driven by robust festive and wedding-related demand.

 

Analysts at ICICI Securities believe Kalyan Jewellers is well-positioned to outperform peers, backed by aggressive store expansion through its asset-light FOCO model, additional growth drivers from the omni-channel platform Candere, and continued improvement in its balance sheet with a planned debt reduction of ₹3.5-4.0 billion in FY26.

 

 

"With steady demand trends despite elevated gold prices, coupled with an accelerating store rollout, we expect Kalyan’s revenue momentum to remain strong going ahead," the brokerage said in its note.

 

ICICI Securities values the company at 43x FY27E EPS and has set a target price of ₹670, implying a potential upside of around 38 per cent from Monday, October 6, closing price of ₹485.35.

 

On Tuesday, October 7, Kalyan Jewellers' stock rose nearly 2 per cent to hit an intraday high of ₹493.2 on the National Stock Exchange (NSE). At 12:00 PM, the stock was trading at ₹489.4, up nearly 1 per cent compared to the previous day's close of ₹485.35 on the NSE. The stock has surged around 26 per cent from its 52-week low of ₹399 touched on March 11, 2025. The company's total market capitalisation stood at ₹50,500.24 crore.  ALSO READ | Tata Steel vs JSW Steel vs NMDC: Which metal stock is JP Morgan bullish on?

Here's why ICICI Securities is bullish on Kalyan Jewellers Stock:

Festive demand to drive SSSG despite high gold prices

In the last two months, Gold prices have increased around 15 per cent over the past two months (+42 per cent Y-o-Y), yet Kalyan is expected to post strong same-store sales growth, supported by festive demand and the onset of the wedding season.

 

While the high base of Q2FY25, which saw 37 per cent revenue growth following the customs duty cut, presents a challenge, early festive demand during Navratri is expected to offset the impact. Additionally, Kalyan is accelerating the rollout of lower carat, lightweight jewellery to boost affordable daily-wear purchases.

Store expansion and candere growth

The company added 152 stores through the FOCO model over FY23-25 and plans to open 90 more stores in FY26, continuing its asset-light expansion. Candere is also scaling rapidly, with 81 stores now and a target of 80 new outlets in FY26. The brand, backed by Shah Rukh Khan, is transitioning into an omni-channel retailer, aiming to turn profitable by FY26-end. The management highlighted stable margins and improving productivity across clusters, reinforcing confidence in its omni-channel strategy.   ALSO READ | Inox Green Energy zooms 52% in 1 month; what's driving smallcap stock?

Asset-light FOCO model boosts returns and efficiency

The company's asset-light FOCO model is boosting returns and capital efficiency, helping reduce working capital debt by ₹5.2 billion in FY25, with additional ₹3.5-4 billion reduction planned for FY26. Capital expenditure remains controlled at around ₹1.5 billion for FY26.

 

"The FOCO rollout has accelerated capital-efficient scaling, improving RoCE to 21.8 per cent, RoE to 17.8 per cent, and inventory turns to 3.2x. Net debt-to-equity (ex-GML) remained negligible at 0.02x, highlighting strong internal accruals and disciplined capital allocation," the brokerage said.

 

ICICI Securities projects a revenue, Ebitda, and PAT CAGR of 28 per cent, 28 per cent, and 38 per cent, respectively, over FY25–27E.

 

However, the brokerage highlighted that the delay in showroom expansion and potentially higher competitive intensity in Core South Indian markets could negatively impact Kalyan's business performance.