Global brokerage house Jefferies has initiated coverage on Kalyan Jewellers with a 'Buy' rating and a target price of ₹598, implying an upside of around 39% from current market levels. According to the brokerage report, the company could benefit from the continued shift towards organised jewellery retail, particularly as it expands beyond its traditional South India stronghold. The brokerage believes Kalyan's combination of local market understanding and organised retail infrastructure could help it capture a larger share of the market.
India's jewellery market is worth more than $115 billion and around 60% of it remains unorganised, creating a large opportunity for established retailers. Kalyan Jewellers already has a presence across more than 500 showrooms globally. The shift is from buying jewellery purely from familiar local shops to choosing brands that offer wider range, stronger systems and greater transparency. The company's strategy is built around understanding local preferences, including jewellery assortment, advertising, showroom experience and community engagement.
Weddings account for around 60% of jewellery demand in India, and Kalyan has built its business around this market through its Muhurat brand and other initiatives aimed at attracting customers during wedding-related purchases. However, the company is not relying only on weddings, with its portfolio including brands targeting different occasions and customer requirements. The company also operates the 'My Kalyan' network, which Jefferies sees as an important customer acquisition channel for expanding its reach beyond traditional markets.
One of the biggest changes in Kalyan's business has been its expansion outside South India, with a large part of the growth outlook resting on the Franchise-Owned Company-Operated (FOCO) model, launched in FY23. Under this setup, franchise partners fund the inventory and store construction costs, while Kalyan retains control over daily operations, pricing, and customer experience. Jefferies expects the company to deliver strong growth over the coming years, with revenue and earnings projected to grow at a compound annual growth rate of 21-23% between financial year 2026 and financial year 2029.
While maintaining a bullish outlook, Jefferies has flagged several key risks to monitor. The report identifies gold price volatility, rising competitive intensity, and regulatory shifts tied to broader macroeconomic conditions as the primary risks to watch. The brokerage also expects the company's balance sheet to strengthen further, supporting its expansion plans and market positioning in the evolving jewellery retail landscape.
