KOCHI: Despite trailing in revenue, Joyalukkas India Ltd (JIL) has far outpaced the standalone operations of Kalyan Jewellers in profitability over the first nine months of FY25 – underscoring stark differences in cost structures and operational efficiency.
Both Joyalukkas and Kalyan Jewellers run overseas operations on a large scale, and both the groups have been aggressively expanding thier business outside India.
Kalyan Jewellers posted a revenue of Rs16,306.79 crore, ahead of Joyalukkas’ Rs14,826.56 crore. However, Joyalukkas turned that revenue into a much stronger bottom line, reporting a net profit of Rs1,191.57 crore – more than double Kalyan’s Rs503.31 crore.
The strength of Joyalukkas’ performance becomes even clearer when compared with its full-year FY24 earnings. The company has already surpassed last year’s net profit of Rs1,020.5 crore, and analysts believe it is on track to close FY25 with over Rs1,500 crore in net profit.
Efficiency over expansion
A key factor driving this profit disparity is cost management. Joyalukkas kept its total expenses at Rs13,246.52 crore, while Kalyan’s expenses surged to Rs15,711.54 crore. Employee benefit costs alone were Rs463.75 crore for Kalyan – Rs140 crore higher than Joyalukkas – possibly driven by its larger showroom network.
As of December 31, 2024, Kalyan Jewellers operated 253 showrooms in India, including those under the Candere brand, while Joyalukkas had only around 100. However, Joyalukkas is selectively expanding, planning to add 30 new stores this year, compared with Kalyan’s more aggressive approach of opening 80 FOCO (Franchise-Owned, Company-Operated) showrooms.
“Kalyan’s expansion through the FOCO model has fueled revenue growth, but it also brings higher operating costs,” said a retail gold analyst.
Hedging strategy at play?
Some analysts speculate that Joyalukkas’ profitability could also be linked to its approach to gold price hedging. “While Kalyan relies on metal loans and hedging strategies, to an extent, to manage price fluctuations, Joyalukkas primarily funds its gold purchases through bank cash credit,” sources told businessbenchmark.news.
Asked whether this played a role in boosting profits, Joy Alukkas, the eponymous CMD of Joyalukkas India Ltd, told businessbenchmark.news, “Gold prices have generally trended upward over the past few decades due to inflation, central bank policies, geopolitical uncertainties, and increasing demand.”
Profitability metrics tell the story
The margin gap between the two companies is significant. Joyalukkas posted a profit before tax (PBT) margin of 10.78 per cent, more than double Kalyan’s 4.18 per cent. The net profit margin followed a similar pattern- 8.04 per cent for Joyalukkas versus 3.09 per cenrt for Kalyan.
With Joyalukkas’ profits soaring and its expenses under tighter control, the jeweler has managed to shine brighter in the battle of the balance sheets – proving that in retail gold, operational efficiency is as valuable as the metal itself.
