Trading activity remained elevated, with around 4 crore shares changing hands by afternoon, compared with the 20-day average of 22 lakh shares. About 13% of the traded quantity had been marked for delivery.
On Thursday, it closed above both its 100-day and 200-day moving averages, marking its first close above the 100-DMA since April. It was also the most traded stock in the Nifty 500 during the session.
The momentum follows the company’s first-quarter business update and a bullish note from brokerage firm Citi, which reiterated its ‘Buy’ rating on the stock with a target price of ₹750.
Citi said that Kalyan’s India business reported 38% year-on-year revenue growth in the June quarter, slightly below its estimate of 43%. The growth was driven by 28% same-store sales growth (SSSG) and the addition of 12 net new Kalyan stores.
The brokerage said management continued to see healthy demand across key markets despite the impact of Adhik Maas. The share of old gold exchange in sales exceeded 46% during the quarter and crossed 55% in June.
The company’s international business recorded 35% revenue growth, while its Middle East operations grew 30% year-on-year. However, management said geopolitical tensions weighed on customer footfalls in the region during April.
Meanwhile, Candere remained a key growth driver, with revenue soaring 112% year-on-year. Overall, consolidated revenue increased around 38%, marginally below Citi’s forecast of 40%.
During the quarter, Kalyan Jewellers expanded its retail footprint by opening 12 Kalyan showrooms and five Candere stores, taking its total network to 524 outlets, including 354 stores in India, 38 in the Middle East, two in the US, one in the UK, and 129 Candere outlets.
Citi believes the company’s asset-light, franchise-led expansion strategy should support sustained growth, improve return on capital employed (RoCE) and aid balance sheet deleveraging.
However, the brokerage flagged a few risks. It noted that Kalyan’s domestic jewellery business underperformed Titan for the first time in 13 quarters.
Other potential headwinds include higher promoter share pledging, softer consumer demand, slower deleveraging and any deviation from the company’s franchise-led expansion strategy.
