Kalyan Jewellers shares hit 52-week high for second day, cross Rs 700 mark; what's next?

Shares of Kalyan Jewellers Ltd hit 52-week high for the second straight session on Thursday after the firm reported its Q2 earnings on November 10. The stock also crossed the Rs 700 mark for the first time today after January 9, 2025. In that session, the jewellery stock hit an intra day high of Rs 709.55.

Kalyan Jewellers stock has gained 15% in two sessions after Q2 earnings.

In the current session, Kalyan Jewellers shares rose 6% to a high of Rs 702.30. Market cap of the firm rose to Rs 71,848 crore. Total 12.53 lakh shares of the firm changed hands amounting to a turnover of Rs 86.97 crore.

In terms of technicals, the relative strength index (RSI) of Kalyan Jewellers stock stands at 75.7, signaling it's trading in the overbought zone. The stock has a beta of 1.41, indicating very high volatility in a year.

Jefferies retained its buy call on the stock with a target price of Rs 900 (40x Dec-28e E).

In the Base Case scenario, the stock has a target of Rs 900, an upside of 47%. "In our base case, we forecast 23% annual growth in rev. over FY26-29E, with some improvement in Ebitda margins. We forecast EPS to rise at ~21% CAGR, supported by strong jewellery rev. growth. We value Kalyan at 40x Dec-28e earnings to arrive at a PT of Rs 900," said Jefferies.

In an upside scenario, the targte is Rs 1100, +80%. "In our bull case, we forecast 26% annual growth in rev. over FY26-29E, with some improvement in Ebitda margins. We forecast EPS to rise at 23% CAGR, supported by strong jewellery revenue growth. We value Kalyan at 50x Dec-28e earnings to arrive at a PT of Rs 1,100," said Jefferies.

In the downside scenario, Jefferies has price targte of Rs 550 or -10% . "In our bear case, we forecast 18% annual growth in revenue over FY26-29E, with some improvement in Ebitda margins. We forecast EPS to rise at 18% CAGR, supported by strong jewellery revenue growth. We value Kalyan at 25x Dec-28e earnings to arrive at a PT of Rs 550," added Jefferies.

Jefferies said 3Q has started strong and ahead of management's expectations, with healthy Navratri/Dhanteras & post-Navratri trends; b) despite high 2H base, medium-term c25% growth aspirations remain intact (although not a formal guidance); c) wedding demand remains encouraging, with c60% of share; d) share gains continue; e) competitive intensity remains elevated, though structural shift towards organised players remains supportive; f) non-GML India debt is fully repaid, with cash deployment focused on higher inventory in existing stores & select flagship stores; g) half collateral has been released, with balance expected soon; Rs 160 mn of land-sale proceeds expected in 3Q.

MOFSL has a price target of Rs 900 on the stock.

MOFSL, which retained 'Buy' on the stock, said consolidated revenue grew 31 per cent year-on-year (YoY) to Rs 10,323 crore compared with its estimate of Rs 9,870 crore. Profit was up 64 per cent at Rs 427 crore. Same-store sales grew 20 per cent YoY in Q2, which was in line with estimates.

Kalyan Jewellers is among largest jewellery retailers in India with a presence in the Middle East, US and the UK. It has 546 showrooms across India, USA, UK and the Middle East, with a retail area exceeding 12,99,000 square feet.