Kalyan Jewellers India: ICICI Securities Reiterates BUY! INR 670 Target Set Amidst Stellar Q2 Performance & Festive Cheer!

ICICI Securities has reiterated its BUY recommendation for Kalyan Jewellers India, setting an unchanged DCF-based target price of INR 670. The research report highlights a robust performance in the second quarter of fiscal year 2026 (Q2FY26), marked by widespread growth across both the Indian domestic market and the Middle East.

Key drivers for this performance include strong Same-Store Sales Growth (SSSG), indicating the healthy performance of existing retail outlets, and continued expansion through the Franchise-Owned Company-Operated (FOCO) model, which facilitates capital-efficient scaling.

Margin performance was notably better than anticipated, supported by a stable product mix and the benefits of operating leverage. Underlying profitability remains firm, even after adjusting for the prior year's customs duty impact.

The outlook remains positive, with festive season trends, especially leading up to Diwali, showing significant momentum, including over 30% SSSG in the initial 30 days. Return metrics have also improved, with Return on Capital Employed (ROCE) approaching 23%.

ICICI Securities sees clear visibility for sustained revenue momentum and stable margin delivery over the medium term. The company's planned rollouts for FY26–27, largely driven by the FOCO pipeline contributing nearly 50% to India's revenue, enhance execution certainty and reinforce consistent performance.

Impact This strong endorsement from ICICI Securities, including a BUY rating and a significant target price, is likely to boost investor confidence in Kalyan Jewellers India. It could lead to positive market sentiment and potentially drive the stock's valuation higher, reflecting the company's solid growth prospects and operational efficiency. Rating: 8/10

Definitions: SSSG (Same-Store Sales Growth): A metric measuring the percentage change in revenue from stores operational for at least one year, reflecting the performance of established outlets. FOCO (Franchise-Owned Company-Operated): A business model where franchisees own and operate stores under the company's brand, allowing for capital-efficient expansion. ROCE (Return on Capital Employed): A financial ratio showing how efficiently a company uses its capital to generate profits. Higher ROCE indicates better profitability. DCF (Discounted Cash Flow): A valuation method that estimates an investment's value based on its future cash flows, discounted to their present value. EPS (Earnings Per Share): The portion of a company's profit allocated to each outstanding share of common stock.