Buy Kalyan Jewellers shares; stock may outperform peers, says ICICI Securities

ICICI Securities has upgraded Kalyan Jewellers India to 'Buy' from 'Add', noting that the stock’s more than 35 per cent correction over the past year provides a significant margin of safety. The brokerage has maintained its earnings estimates and expects Kalyan to deliver robust same-store sales growth in FY26, driven by strong festive and wedding-led demand.

The brokerage believes Kalyan is well-positioned to outperform its peers, supported by aggressive store expansion through its asset-light FOCO model, the addition of new growth levers from the omni-channel format Candere, and an improving balance sheet with planned debt reduction of Rs 350–400 crore in FY26. ICICI Securities expects steady demand trends, despite elevated gold prices, combined with an accelerating store rollout, to sustain the company’s revenue momentum. The firm maintains a target price of Rs 670.

Over the past two months, gold prices have risen by 15 per cent, or 42 per cent year-on-year, yet ICICI Securities expects Kalyan to deliver strong same-store sales growth, aided by festive demand and the beginning of the wedding season. While the high base in Q2FY25, which saw 37 per cent revenue growth following the customs duty cut, presents a challenge, the brokerage believes early demand during Navratri is likely to offset it. Kalyan is also ramping up the introduction of lower-carat, lightweight jewellery to make daily-wear purchases more affordable for customers.

Kalyan has been aggressively expanding its retail footprint. Between FY23 and FY25, the company added 152 stores through the FOCO model. For FY26, management has reiterated its guidance of opening 90 new stores, predominantly FOCO-driven. In the first quarter, Kalyan added 10 showrooms in India, bringing the global store count to 287, including 161 FOCO and 126 COCO stores.

The brokerage also highlighted the company’s focus on expanding Candere, which is transitioning from a digital-first brand to an omni-channel retailer. With Shah Rukh Khan as its brand ambassador, Candere aims to offer lightweight lifestyle jewellery through a seamless online and offline experience. The brand added 70 stores over the past 18 months and plans to open 80 more in FY26. Candere now operates 81 stores, including 41 FOCO locations, has delivered INR 1.9 billion in trailing twelve-month revenue, and is expected to turn profitable by the end of FY26. The Kalyan management has emphasized stable margins and improving productivity across clusters, reinforcing confidence in its omni-channel strategy