Where Will Kalyan Jewellers Share Price be in the Next 3 Years?

Kalyan has also strengthened its digital presence through its online platform and the Candere brand, enabling it to cater to both traditional and younger customers while expanding its market reach.

Factors that Could Work for the Kalyan Jewellers Stock

• Strong Growth Rates

  This is one jewellery company that is seeing a robust growth rate. The company has seen a 3-year sales CAGR of 32.3% and net profit CAGR of 47.2%. This comes against the backdrop of increased gold prices, which do not seem to have dented demand for Kalyan Jewellers.

• Strong Q1FY27 Update

  The momentum of the last three years appears to be carrying over into FY27. According to the company's latest business update for Q1FY27, revenue growth was in excess of 38% for its India operations during Q1FY27 as compared to Q1FY26.

  This was led by robust operating momentum on the ground with healthy same-store-sales-growth across all the key markets in the country despite the 28-day Adhik Maas period falling fully in the recently concluded quarter.

  Adhik Maas is a once-in-3-year phenomenon during which wedding-related demand tends to take a pause in certain parts of the country. The recently concluded quarter recorded same-store sales growth of approximately 28%.

• Strong Digital Sale

  Digital sales, which could remain an important business line for the company, are also growing rapidly. The digital-first jewellery platform, Candere, recorded revenue growth of approximately 112% in Q1FY27 compared to the same period last year.

• Strong Expansion Plans

  Plans for the current financial year also look good. In FY27, Kalyan Jewellers plans to open 150 showrooms across Kalyan, Candere, and the new regional brand. This means the expansion momentum will continue, helping sustain growth over the next few years.

Key Risks for Kalyan Jewellers

• Pledged Promoter Holdings

  One key risk for Kalyan Jewellers is its promoter share pledge. While promoters hold a strong stake of around 63%, nearly a quarter of their holding is pledged to secure borrowings.

  Although promoter pledging is not uncommon, a high level can raise concerns if it increases further or if the stock price comes under pressure. Investors should monitor quarterly disclosures for any changes in pledged shares, as these can influence market sentiment and stock performance.

• Gold price volatility

  Sharp fluctuations in gold prices can affect consumer demand, inventory valuation, and profitability, especially if prices rise too quickly.

• Intense competition

  Kalyan competes with large, organised players such as Titan Company, Senco Gold, and P N Gadgil Jewellers, as well as thousands of regional jewellers.

• Regulatory risks

  Changes in gold import duties, GST, hallmarking norms, or KYC regulations can impact demand and profitability.

Kalyan Valuations vis-a-vis peers

The above valuations are not a surprise. Titan has always commanded a hefty price-to-earnings and price-to-book, on account of its sheer size, diversified portfolio, and strong brand equity.

Kalyan Jewellers PE and price-to-book have expanded significantly, given the three-day rally in the stock of 32%. Valuations would have looked very different four days ago.

Where will the stock of Kalyan Jewellers be in the next three years?

The answer to that question lies in one simple thing - earnings growth.

Given the stock's rally, investors are now looking to robust numbers for FY27. That may now be baked into the price.

Where the stock is headed in the medium term would depend on factors influencing growth. These include import duties and international gold prices.

In fact, as far as import duties are concerned, the government cut them on gold in 2024 and raised them in 2026. If duties remain unfavorable, it could hit demand.

On the other hand, international gold prices could also alter demand. That being said, we have seen in the past that though retail gold surged to Rs 150,000 per 10 grams, the industry continued to grow. So, past trends suggest this may not be a big challenge.

Overall, the pertinent point here is whether investors would want to add a stock to their watchlist after a 32% rally.

Investors should evaluate the company's fundamentals, corporate governance, and valuations of the stock as key factors when conducting due diligence before making investment decisions.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...