- Net profit jumped 90% YoY to ₹416.2 cr, outpacing revenue growth.
- EBITDA surged 75% YoY, lifting margins to 7.3%—a rare margin expansion in a commodity‑heavy sector.
- Franchise (FOCO) stores now >50% of the network, fueling higher gross margins.
- Technical charts show a 242‑day base breach; the next support sits around ₹300‑₹320.
- India’s same‑store sales growth (SSSG) hit 27%, far above peers.
You missed the biggest profit surge of the quarter—Kalyan Jewellers just exploded.
Why Kalyan Jewellers' Margin Explosion Beats Industry Trends
The jewellery market in India is traditionally low‑margin, squeezed by gold price volatility and high import duties. Kalyan's Q3 FY26 results flip that script: revenue rose 42% YoY to ₹10,343 cr, while EBITDA climbed 75% YoY, expanding the EBITDA margin to 7.3%. The margin lift stems from two structural levers:
- Franchise‑driven (FOCO) model: More than half of the 1,600‑plus stores now operate on a franchise basis, shifting inventory risk to partners and delivering a healthier gross margin mix.
- Product mix shift: The share of studded jewellery—higher‑priced, higher‑margin pieces—has risen, cushioning the impact of raw‑material price swings.
For context, peers like Tanishq (Titan) and PC Jeweller reported margin compression in the same quarter, hovering around 4‑5% EBITDA margins. Kalyan's 7.3% places it in the top quartile of Indian jewellery retailers.
Sector‑Wide Implications: How the Q3 Surge Reshapes the Indian Jewellery Landscape
India’s jewellery consumption is projected to reach $85 bn by 2028, driven by rising disposable incomes and cultural demand. Kalyan's performance validates three broader trends:
- Accelerated showroom rollout: Aggressive expansion adds 120 new stores YoY, reinforcing market penetration.
- Omnichannel integration: The Candere platform, though modest, provides digital reach and future‑ready revenue streams.
- Middle‑East diversification: Consistent double‑digit growth in the GCC offers a hedge against domestic gold price swings.
Investors should monitor whether other players can replicate Kalyan's franchise scaling. If they do, the sector’s average EBITDA margin could inch upward, redefining valuation baselines.
Historical Parallel: When Kalyan Last Delivered a Double‑Digit Profit Leap
In FY2022, Kalyan posted a 65% profit surge after a similar franchise push and a strategic focus on high‑end studs. The stock rallied 55% over the subsequent six months before correcting to a 30‑day moving‑average support at ₹480. That pattern—sharp profit jump, short‑term rally, then consolidation—recurred in FY2026, suggesting a potential repeatable price trajectory.
Technical Landscape: The 242‑Day Base Break and What It Means for Entry Points
The share slipped below its 242‑day base near ₹450, a classic bearish signal. However, analysts pinpoint a high‑probability bounce zone at ₹300‑₹320, aligning with the “buy‑climax” target derived from volume‑price analysis. Until price re‑tests that zone, the risk‑reward favors short‑term sells on rallies.
Investor Playbook: Bull vs. Bear Cases
Bull Case: Assume Kalyan sustains 27% SSSG and continues to convert 55% of stores to FOCO by FY27. EBITDA margin could climb to ~9%, pushing FY27 EPS to ₹45. A 15× forward PE would value the stock near ₹560, offering a 45% upside from current levels.
Bear Case: If gold prices spike >15% YoY and the franchise rollout stalls, margin pressure could return, compressing EBITDA to 5.5% and dragging EPS down to ₹30. A 12× PE would cap the share around ₹350, implying a 30% downside.
Key catalysts to watch: gold price trends, franchise rollout milestones, and Candere’s contribution to total revenue.
Actionable Takeaways for Your Portfolio
- Consider a staged entry: initiate a small position if price retraces to the ₹300‑₹320 zone.
- Maintain a stop‑loss near ₹280 to protect against a prolonged downtrend.
- Allocate a modest growth tilt (5‑7% of equity exposure) to Kalyan, given its outsized profit growth versus peers.
- Monitor macro‑gold dynamics and the performance of the franchise network for early warning signals.
In short, Kalyan Jewellers blends scalable franchise growth with a rare margin upgrade, making it a compelling candidate for investors seeking high‑growth exposure in a traditionally defensive sector.