Kalyan Jewellers shares jump 10% post Q2 results; 'Buy' stock, says MOFSL

The Thrissur-headquartered Kalyan Jewellers India Ltd shares climbed 10 per cent in Wednesday's trade following the jeweller's strong set of September quarter results. 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.
Following the development, the stock rose 10 per cent to hit a high of Rs 672.10 apiece, taking its six-month rise to 73.87 per cent.

MOFSL said there was a one-time gain of Rs 52 crore due to the increase in customs duty from 6 per cent to 15 per cent. Besides, there was a one-time inventory loss of Rs 8.3 crore due to open positions in Silver and Platinum against Rs 21.20 crore in gains in Q2.

Adjusted for these inventory gains/losses, gross margin contracted 80 basis points to YoY to 11.9 per cent, which was higher than MOFSL's estimate of 11.2 per cent.

Adjusted Ebitda grew 26 per cent YoY to about Rs 600 crore against MOFSL's estimate of Rs 580 crore, with adjusted Ebitda margin contracting 20 bps YoY to 5.8 per cent against estimate of 5.9 per cent.

Post its quarter results, Kalyan Jewellers' Executive Director Ramesh Kalyanaraman said: “The ongoing festive quarter has started off very well and we are very encouraged by the growth on the ground, especially during Navratri and Dhanteras. We are upbeat about the wedding season and look forward to ending the quarter on a strong note."

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.