Jefferies predicts 39% upside in this Jewellery retail stock under Rs 600 – What’s fuelling the bullish call?

The global brokerage house, Jefferies has initiated coverage on Kalyan Jewellers with a ‘Buy’ rating. It has set a target price of Rs 598, implying an upside of around 39% from the current market price. 

As per the brokerage house report, the company could benefit from the continued shift towards organised jewellery retail, particularly as it expands beyond its traditional South India stronghold.

Let’s take a look at why the brokerage house is bullish on this jewellery sector stock – 

The big opportunity: An industry still largely unorganised

India’s jewellery market is worth more than $115 billion and around 60% of it remains unorganised.

That leaves a large opportunity for established retailers.

Kalyan already has a presence across more than 500 showrooms globally. Jefferies believes its combination of local market understanding and organised retail infrastructure could help it capture a larger share of the market.

In simple terms, the shift is from buying jewellery purely from a familiar local shop to choosing brands that offer a wider range, stronger systems and greater transparency.

Why does Kalyan Jeweller’s local strategy matter?

Kalyan is not trying to operate every showroom in exactly the same way.

According to the Jefferies report, its strategy is built around understanding local preferences. This includes the jewellery assortment, advertising, showroom experience and community engagement.

The company also operates the ‘My Kalyan’ network, which Jefferies sees as an important customer acquisition channel.

Can weddings keep driving demand?

There is another important factor – weddings.

According to the brokerage report, weddings account for around 60% of jewellery demand in India. Kalyan has built its business around this market through its Muhurat brand and other initiatives aimed at attracting customers during wedding-related purchases.

But the company is not relying only on weddings.

Its portfolio includes brands targeting different occasions and customer requirements. Jefferies also points to the company’s plans to expand regional brands and strengthen its presence in more states.

The expansion engine outside South India

One of the biggest changes in Kalyan’s business has been its expansion outside South India.

A large part of this growth outlook rests on something called the Franchise-Owned Company-Operated (FOCO) model, launched in FY23. Under this setup, franchise partners fund the inventory and store construction costs, while Kalyan retains control over daily operations, pricing, and how customers experience the brand.

Earnings growth is another trigger

Jefferies expects Kalyan to deliver strong growth over the coming years. Jefferies noted that the revenue and earnings could grow at a compound annual growth rate of 21-23% between financial year 2026 and financial year 2029.

The brokerage also expects the company’s balance sheet to strengthen further.

Kalyan Jewellers: Assessing the risk?

No bullish call comes without caveats. The brokerage house report also flagged gold price volatility, rising competitive intensity, and regulatory shifts tied to broader macroeconomic conditions as the key risks to watch.

Disclaimer: The stock ratings, target prices, and growth estimates referenced in this article are sourced from brokerage reports and are presented solely for informational purposes. They do not constitute an offer, solicitation, or direct recommendation to buy, hold, or sell any financial instrument. Investments in the securities market are subject to market risks, volatility, and corporate factors. Readers are strongly advised to conduct independent research and consult a SEBI-registered financial advisor before making any investment decisions. This disclaimer has been generated using AI to support user well-being and responsible content consumption.