Kalyan Jewellers slips 3% as Q1 margin pressure overshadows 32% jump in net profit

Kalyan Jewellers shares slipped 3% to Rs 575 on the BSE on Wednesday after the company's June-quarter earnings showed margin pressure, overshadowing a 32% year-on-year (YoY) increase in consolidated net profit to Rs 348.7 crore.

The company's revenue from operations rose 45.7% YoY to Rs 10,588.9 crore from Rs 7,268.5 crore, according to the unaudited financial results approved by the board on August 4.

Operating performance remained healthy, with EBITDA (earnings before interest, taxes, depreciation and amortisation) increasing 24.5% to Rs 632.5 crore from Rs 508 crore in the year-ago quarter.


Gross margins were impacted by a higher share of exchanged gold, promotional offers under the exchange campaign, and a one-off gain from platinum and silver sales in the base quarter. The company also recorded a one-off gain of around Rs 41 crore during the quarter due to the import duty hike.

During the quarter, Kalyan Jewellers added 12 new showrooms in India, compared with 10 additions in the corresponding period last year. India revenue grew 38% year-on-year, largely driven by same-store sales growth of 28%, while B2C revenue increased by around 34%.

The company said new customer additions remained healthy, with first-time buyers accounting for more than 36% of customers. Franchised stores contributed around 57% of revenue during the quarter.

Kalyan Jewellers FY27 outlook

Looking ahead, the company said it is targeting mid- to high-single-digit same-store sales growth. It also expects its capital-efficient, franchise-led expansion strategy to further improve its return on capital employed (ROCE) from the current level of around 30.3%, based on the last 12 months' performance.

On the expansion front, Kalyan plans to increase the share of revenue from non-South Indian markets, with most new showroom additions planned outside the southern region. The company said future store openings will largely follow its asset-light franchise model.

It also plans to accelerate the rollout of Candere showrooms, which focus on lightweight lifestyle jewellery, and launch new regional jewellery brands offering localised designs, with the first such brand expected to debut in FY27.

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