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The festive season is nearing and the jewellery sector is shining bright as the sales have picked up after the pandemic. The shares of Kalyan Jewellers are dazzling. They have gained more than 18 per cent in the past two days and have reached an all-time high of ₹ 101.40 apiece on the National Stock Exchange (NSE) amid heavy volumes. 

Kalyan Jewellers India Ltd’s shares are trading significantly above their issue price of ₹ 87 per share. Its shares debuted on the bourses on March 26, 2021. The company’s stock soared 38.86% in the past month as against a 0.49% rise in the Nifty 50 index. 

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Kalyan Jewellers is one of the largest jewellery retailers in India. It is engaged in the design, manufacture, and sale of a variety of gold, studded, and other jewellery products for various occasions, including weddings and daily wear. 

The jeweller has seen a significant acceleration in scale, growth and profitability, on the back of industry tailwinds and strong execution. In addition, its retail expansion continued in the recently concluded quarter, with the launch of four new showrooms. Of these, three showrooms are in non-south markets and one is in the Middle East. Kalyan Jewellers has a store network of 158 stores. 

The company’s management is looking forward to the festive season and said that its revenue momentum in the latest quarter (July-September) was encouraging. Its sales increased to ₹ 2718.99 crores in the June quarter as compared to ₹ 2398.79 crores in the March quarter, indicating a rise of 13.35 percent. Further, its profit surged to ₹ 95.36 crores from ₹ 70.48 crores, up 35.30 percent. 

ICRA Ratings expects the gold jewellery demand in India to grow at a steady rate of 11 per cent during FY23. Therefore, this would gradually supplement the strong growth witnessed in FY22 – a 40 per cent surge over the pre-COVID levels seen in FY20. 

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Centrum Broking has a buy call on the shares of Kalyan Jewellers with a target price of ₹ 121 apiece. This translates to an upside of 24% as compared to the current share price of ₹ 97.60. 

Written by Simran Bafna

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