KOCHI: Even as Kalyan Jewellers’ stock recovers from its recent slump, analysts remain divided on its valuation, with many avoiding a firm stance on its price direction.
The Kalyan Jewellers stock, which once soared on expectations of strong growth, has been hammered in recent weeks, falling 45 per cent from its peak of Rs795.40 on January 2, 2025.
Despite this, some brokerages continue to see long-term potential, while others caution that the stock’s lofty valuations may not be sustainable.
Motilal Oswal Financial Services (MOFSL) has maintained its ‘Buy’ rating, citing a 42 per cent upside potential with a price target of Rs625.
The brokerage highlighted Kalyan Jewellers’ successful franchise expansion, which now contributes 40 per cent of total revenue, and the company’s growing presence in non-southern markets and overseas.
MOFSL noted that the asset-light expansion model of Kalyan Jewellers has improved profitability by lowering interest costs and aiding debt repayment.
However, the firm has adjusted its valuation multiple to 50 times December 2026 EPS, factoring in potential pressure on discretionary spending in FY26.
Meanwhile, Citialso retained a ‘Buy’ call but slashed its price target by 20 per cent to Rs650 from Rs810, reflecting a more cautious outlook.
The brokerage pointed out that while Kalyan Jewellers Q3 revenue grew 40 per cent YoY- driven by a 24 per cent same-store sales growth (SSSG) in India – the EBITDA and PBT figures slightly missed expectations. Citi noted that the company continues to see strong demand despite rising gold prices and expects profit before tax (PBT) growth to outpace revenue growth in FY26 due to operating leverage and lower interest costs.
Market concerns
Even after Friday’s 9 per cent jump to Rs481.30, the stock remains down 38.47 per cent in January so far.
Concerns over high valuations persist, as the stock had been trading at aggressive earnings multiples before the correction.
MOFSL’s asset management arm recently had to deny allegations of irregularities in its investment decisions regarding Kalyan Jewellers, calling them “baseless and defamatory.”
Despite the mixed views, most analysts remain optimistic about the stock. Out of nine brokerages covering Kalyan Jewellers, eight have a ‘Buy’ rating, while one has a ‘Sell’ call.On the other end, MOFSL has the highest target at Rs875.
Expansion plans and outlook
Looking ahead, Kalyan Jewellers plans to add 30 new stores in Q4 FY25 and 90 more in FY26, with Letters of Intent (LOIs) already signed for the first half of FY26.
The company has also repaid Rs450 crore in debt over the past 18 monthss and expects to clear another Rs150 crore in Q4 FY25.
The management remains confident in demand trends and expects further growth in PBT, supported by margin stability, rising franchise revenues, and lower interest costs.
For now, investors remain caught between optimism over the company’s growth trajectory and concerns over valuation sustainability, making Kalyan Jewellers one of the more polarising stocks in the market.
