KALYANKJIL - Kalyan Jewellers India Limited Share Price

The management of Kalyan Jewellers India Limited provided a positive outlook during the Q4 FY2025 earnings call, highlighting significant achievements and future plans. For the quarter, consolidated revenue grew approximately 36%, while profit after tax (PAT) rose by around 41%. Standalone revenue growth was reported at 38% with a PAT of INR 714 crores for the full financial year, surpassing INR 25,000 crores in revenue.

Management outlined their operational targets, including the opening of 170 new showrooms"”90 under the Kalyan brand and 80 under the Candere brand"”in FY2026. They expect to reduce debt by INR 300 to 400 crores after a net reduction of INR 520 crores over the previous two years. A dividend of INR 150 crores was also proposed, with a payout exceeding 20% of FY2025's net profit.

Focusing on the Candere platform, management aims to enhance its omnichannel strategy. They have set a target for Candere to reach profitability at the PAT level within FY2026. 73 Candere showrooms are currently operational, with plans for 80 more through a mix of franchisee and company-owned formats.

In response to market dynamics, management noted robust consumer demand, particularly around wedding purchases, and a high conversion rate to studded jewelry driven by gold price fluctuations. They anticipate continued momentum in consumer demand amid ongoing volatility in gold prices.

Overall, management's strategies and proactive measures are geared toward strong revenue growth and market expansion, setting an optimistic tone for the upcoming financial year.

Q&A Section from Kalyan Jewellers Q4 FY '25 Earnings Call Transcript

1. Question: "Given the material gold inflation which you have seen, what's the consumer telling you in terms of consumer behavior?"

Answer: "With the recent 40% increase in gold prices, consumers tend to pause and reassess before purchasing. While demand remains strong, especially during events like Akshaya Tritiya, we've noted shifts in inventory preferences towards various gold carat compositions like 18-carat. We continuously adapt our inventory based on these evolving consumer preferences."

2. Question: "So, have we changed our way of hedging recently, and what's the outlook?"

Answer: "Gold loan interest rates increased by 2%-2.5% but have begun to stabilize, currently at around 5%-5.5%. We're waiting for this to normalize; our gold loans are expected to increase while non-GML will reduce, which aligns with our strategy to streamline our financials."

3. Question: "What are your expectations for growth in FY26, and how many stores do you plan to open?"

Answer: "In FY26, we project significant growth fueled by the opening of 170 new showrooms, including 90 under Kalyan and approximately 80 under Candere. We anticipate that revenue growth will remain robust, bolstered by our strong SSGs and previously opened stores contributing to overall performance."

4. Question: "Can you share an update on the marginals from studded products?"

Answer: "We incentivize staff and run promotions to improve our studded ratios, which increase our margins. Our non-south revenues greatly contribute to this, as they generally have better studded mix ratios. Continued focus on these initiatives is key for driving studded product sales."

5. Question: "Is the interest rate on the gold metal loan significantly higher now?"

Answer: "Yes, gold metal loan interest rates have risen to around 5%-5.5%, up from 3%-3.5%. This increase is notable and reflects broader market shifts as we adapt our financial strategy accordingly."

6. Question: "Regarding Candere, what unit economics can you expect from mature stores?"

Answer: "For mature Candere stores, we target margins in the range of 30%-35% with a stock churn rate around 2%. Our expansion strategy focuses on metro and Tier 1 and Tier 2 locations to support this growth trajectory."