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Kalyan Jewellers Faces Stock Decline Despite ‘Buy’ Recommendations from HSBC and Citi

Despite receiving ‘buy’ ratings from prominent brokerages, Kalyan Jewellers saw its shares decline by 1.3 percent to Rs 254.8 as of 12:11 pm.

HSBC issued a ‘buy’ call on the stock, setting a target price of Rs 300 per share. The brokerage noted that Kalyan Jewellers had surpassed consensus sales expectations and commended the company for its asset-light approach to network expansion, which is yielding consistent positive results.

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Citi maintained its ‘buy’ rating on the stock with a target price of Rs 230 per share. The brokerage highlighted the company’s stable gross margins on a year-on-year (YoY) basis at the showroom level.

Kalyan Jewellers reported a significant revenue growth of 33 percent YoY in the July-to-September quarter, as indicated in its Q2FY24 earnings update. This growth was driven by strong operational performance, with robust same-store sales growth across key markets, even during a period that included the Adhik Maas, which typically impacts sales negatively.

The company’s non-south markets experienced higher revenue growth, primarily attributed to the opening of several new showrooms over the past year. During the quarter, Kalyan Jewellers added 13 new showrooms in non-south markets, and it has ambitious plans to launch 26 more within the next 40 days, aiming to achieve a total store count of 51 by Diwali.

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