Gold rate has been trading at multi-year highs, putting jewellery sector stocks in focus, especially ahead of Dhanteras and Diwali. ICICI Securities has upgraded Kalyan Jewellers to ‘Buy’ from ‘Add’, while maintaining its target price of Rs 670, implying an upside of 50% from current levels.
Supporting the investment rationale, the brokerage house listed the key advantages. “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,” said ICICI Securities.
ICICI Securities on Kalyan Jewellers: Festive demand to lead same store sales growth
The brokerage expects Kalyan Jewellers to deliver strong SSSG (same store sales growth) in FY26, supported by strong festive and wedding-led demand. Despite higher gold prices, festive-led demand is expected to drive double-digit SSSG. Over the last two months, gold prices have risen by 15% and over 42% year-over-year.
ICICI Securities on Kalyan Jewellers: Likely to outperform peers
The brokerage believes Kalyan Jewellers may continue to outperform peers on the back of aggressive store expansion through its asset-light FOCO model (Franchise Owned, Company Operated), adding growth levers from omnichannel format Candere, and improving balance sheet health through further debt reduction of Rs 350–400 crore in FY26. Over FY23–25, Kalyan Jewellers added 152 stores through the FOCO model. For FY26, the management has reiterated guidance of 90 new stores, largely FOCO-driven. In Q1, Kalyan added 10 new showrooms in India, taking the global store count to 287 (161 FOCO and 126 COCO).
ICICI Securities on Kalyan Jewellers: High base to remain a challenge
The company’s high base of Q2FY25 (37% revenue growth post the customs duty cut) poses a challenge, but demand preponement into Navratri is likely to offset it. The company is also ramping up the introduction of lower carat, lightweight jewellery, enabling affordable daily-wear purchases. Also, the company reduced working capital debt by Rs 520 crore in FY25, with further targeted reduction of Rs 350–400 crore in FY26 (pending release of Rs 200 crore excess collateral).
Kalyan Jewellers stock performance
Plus, the stock price has corrected 38% over the last one year, providing a material margin of safety to upgrade the jewellery sector stock. The stock has fallen 3.5% in the last five trading sessions. The share price of Kalyan Jeweller has declined 9.6% in the past one month.