Kalyan Jewellers , one of India's largest jewellery retailers, reported robust financial results for the first quarter, despite a significant drop in its stock price. The company's performance highlights its resilience in a volatile market environment.

Strong Financial Performance

Kalyan Jewellers recorded a consolidated revenue of ₹7,268.00 crore in Q1, marking a substantial 31% growth compared to ₹5,528.00 crore in the same period last year. The company's consolidated Profit After Tax (PAT) saw an impressive 49% increase, reaching ₹264.00 crore, up from ₹178.00 crore in the previous year's Q1.

Indian Market Performance

In the Indian market, Kalyan Jewellers' standalone revenue grew by 31% to ₹6,142.00 crore, with PAT surging by 55% to ₹256.00 crore.

International Operations

The company's international operations, particularly in the Middle East, also showed strong growth:

• Revenue increased by 27% to ₹1,026.00 crore
• PAT rose by 18% to ₹22.00 crore

Stock Performance

Despite the strong financial results, Kalyan Jewellers' stock experienced a significant decline. The share price dropped 9% to ₹551.90, after opening higher at ₹615.65.

Operational Highlights

• 18% same-store sales growth in India
• Addition of 10 new showrooms during Q1
• Total of 406 showrooms across India, the USA, and the Middle East
• Retail area exceeding 10,00,000 sq. ft.

Analyst Perspective

Market sentiment remains largely positive:

• Citi maintained a 'Buy' rating
• Price target raised to ₹700.00
• EBITDA and profit before tax increased by 35% and 49% respectively
• Eight out of nine analysts covering the stock have 'Buy' ratings

Strategic Initiatives and New Ventures

• Implementation of 'lean credit procurement' pilot project
• Potential capital infusion of ₹1,500.00-2,000.00 crore if rolled out company-wide
• Paused debt reduction to monetize real estate collateral
• Plans to open five stores under a regional brands strategy
• Received subsidized land worth ₹5.00 crore from the Kerala government
• No plans for in-house manufacturing
• Reevaluating previous credit period policy

Management Commentary

Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers, expressed optimism about the upcoming festive season, stating, "We have started off the ongoing quarter well despite continuing volatility in gold prices and a higher base. We are upbeat about the upcoming festive season across the country and are gearing up for the launch of fresh collections and campaigns."

Conclusion

Despite stock price volatility, Kalyan Jewellers' strong financial performance, expansion plans, and strategic initiatives suggest a positive outlook. The company's assurance that new ventures won't impact ROCE and the receipt of subsidized land from the Kerala government further strengthen its position. Investors and analysts will be closely watching how the company navigates the upcoming festive season and implements its strategic initiatives in the coming quarters.

Kalyan Jewellers India Limited , one of India's largest jewellery retailers, has reported a robust financial performance for the first quarter, with significant growth in both revenue and profitability.

Financial Highlights

The company recorded consolidated revenue of ₹7,268.00 crore, marking a substantial 31% increase from ₹5,528.00 crore in the same period last year. This strong top-line growth was accompanied by an impressive 49% surge in consolidated Profit After Tax (PAT), which reached ₹264.00 crore, up from ₹178.00 crore in the previous year's corresponding quarter.

India Operations

Kalyan Jewellers' standalone revenue from India operations grew by 31% year-on-year to ₹6,142.00 crore. The company's PAT from Indian operations saw an even more substantial increase of 55%, reaching ₹256.00 crore for the quarter.

A key driver of this growth was the company's strong same-store sales growth (SSSG) of 18% in India. The non-South Indian market contributed 51% to the total revenue, indicating successful expansion beyond the company's traditional stronghold.

International Performance

The company's international operations, primarily in the Middle East, also showed significant growth. Middle East revenue increased by 27% to ₹1,026.00 crore, with PAT growing by 18% to ₹22.00 crore.

Expansion and Future Outlook

Kalyan Jewellers continued its expansion strategy, operating 406 showrooms across India, the USA, and the Middle East by the end of the quarter. The company has been actively pursuing a franchise-owned company-operated (FOCO) model, with 161 FOCO Kalyan showrooms in India as of June 30.

Mr. Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers India Limited, expressed optimism about the upcoming festive season, stating, "We have started off the ongoing quarter well despite continuing volatility in gold prices and a higher base. We are upbeat about the upcoming festive season across the country and are gearing up for the launch of fresh collections and campaigns."

Product Mix

The company's studded jewellery share remained stable at 30.3% of revenue, compared to 30.4% in the same quarter last year. This indicates a consistent demand for higher-margin studded jewellery products.

Conclusion

Kalyan Jewellers' strong quarterly performance demonstrates the company's resilience and ability to capitalize on market opportunities despite challenges such as gold price volatility. With its expanding network, focus on both traditional and emerging markets, and strategic initiatives like the FOCO model, Kalyan Jewellers appears well-positioned for continued growth in the Indian jewellery market.