KALYANKJIL - Kalyan Jewellers India Limited Share Price

In the Q1 FY '26 earnings conference call, management expressed a positive outlook for Kalyan Jewellers. The company reported a consolidated revenue growth of approximately 31% year-over-year, reaching INR 7,268 crores, alongside a profit after tax (PAT) increase of around 49%, amounting to INR 264 crores. The standalone business saw similar growth metrics, with a 31% revenue rise and a 55% increase in PAT.

Key forward-looking points include:

1. Real Estate Monetization: Management intends to monetize real estate collaterals worth INR 200 crores currently held with banks, pausing further debt reduction until the documentation process is completed.

2. Expanding Distribution: The company plans to introduce a third retail format focused on regional brands, launching the first brand before the end of 2025. This follows a successful addition of over 70 Candere showrooms in the past 18 months, with projections to add another 80 this fiscal year.

3. Operating Margin Enhancement: The introduction of a pilot project focused on leaner credit periods for vendors aims to drive cost efficiencies and improve margins. Average payable days are expected to decrease from 30-33 to around 10-12 days.

4. Festive Season Preparedness: Management appears upbeat about the upcoming festive season, anticipating increased demand despite recent volatility in gold prices. The company has fresh collections and campaigns planned for this period.

5. E-commerce Growth: The Candere brand is projected to break even in PAT by the end of the fiscal year, having already seen significant increases in footfall and conversion rates since its brand campaign.

Overall, management emphasizes ongoing expansion efforts in both traditional retail and e-commerce, alongside a strategic focus on enhancing operational efficiencies and maximizing shareholder value.

Q1 FY "˜26 Earnings Call - Key Questions and Answers

1. Question: Can you elaborate on the new pilot regarding the procurement plan with a leaner credit from vendors? How much of this quarter's gross margin improvement can be attributed to this?
Answer: Yes, we experienced margin improvements due to the pilot project; however, quantifying the exact impact is tough. The increase came from both this pilot and higher revenue from platinum and silver, which yield better margins. The pilot is crucial, and we're looking to fully implement these practices at Kalyan.

2. Question: How do you plan to implement this leaner credit arrangement across Kalyan Jewellers?
Answer: The pilot project will first fully integrate into our new regional brand before expanding to Kalyan Jewellers. We need time for broader implementation at Kalyan, aiming for meaningful gross margin increases once we stabilize this regional brand.

3. Question: What is the strategy for the new regional brands? Will they be under Kalyan Jewellers or have distinct identities?
Answer: The new brand will be entirely regional, with multiple names for different states. Our strategy focuses on creating local brands with targeted campaigns for each state. We plan to launch the first regional brand before the end of this calendar year.

4. Question: Can you provide insights on the expected PBT growth for this fiscal year?
Answer: We foresee PBT trending towards the upper side of 5% for India. The demand looks robust, despite a high base from last year, and we are optimistic about sustaining growth.

5. Question: What is your advertising spend expectation for this year?
Answer: We expect our advertising spend to stay around 1.5% of revenues, slightly lower than last year's 1.8%, due to leveraging growth.

6. Question: How should we view the ongoing transition from unorganized to organized players in the market?
Answer: We strongly believe that the market will shift more towards organized retailers, potentially reaching a 100% organized share in the next five years due to the ongoing migration from unorganized to organized segments.

These responses capture the critical questions and comprehensive answers provided during Kalyan Jewellers' Q1 FY '26 earnings conference call, summarizing key insights regarding company strategy and performance.