Kalyan Jewellers: Ignore the noise. Business momentum is sustaining

[Pee Vee]

Highlights from our interaction with management of Kalyan Jewellers (Kalyan) include: 1) Despite an increase in the gold price (up 15% QoQ) and higher competitive intensity, growth momentum remains strong in Q4 driven by a robust wedding season and consumer engagement. 2) Capital efficient / asset-light store addition pipeline remains strong for next two years with a target to add ~90 stores p.a. 3) Expect step-up in network expansion of Candere to cater to increasing demand for fast fashion jewellery among youth and jewellery gifting. The potential for Candere is huge with its small format store; it can be a major growth lever for Kalyan over long term. 4) As per management, the recent increase in GML interest rate is unsustainable and should normalise. 5) It aims to reduce debt by INR 4bn in FY26. Maintain ADD with a DCF-based revised TP of INR 520.