Kalyan Jewellers India Limited Q3 FY26 Earnings Call Summary

Summary

Kalyan Jewellers India Limited - Q3 FY 2026 Earnings Call Summary Thursday, February 06, 2026, 4:00 PM IST

Event Participants

Executives 5 Abraham George (Head - IR and Treasury), Ramesh Kalyanaraman (Executive Director), Sanjay Mehrottra (Head - Strategy and Corp Affairs), Sanjay Raghuraman (CEO), V. Swaminathan (CFO)

Analysts 6 Ashish Kanodia (Citigroup), Awais Bakshi (Sundaram Mutual Fund), Devanshu Bansal (Emkay Global), Gaurav Jogani (JM Financial), Nihal Mahesh Jham (HSBC), Yash Sonthaliya (Edelweiss)

Financials & KPIs

Geographic & Segment Commentary

• India: Revenue grew 42% YoY to ₹9,048 crores with PAT reaching ₹401 crores. Performance was bolstered by a 30% like-for-like growth during the 30-day Diwali period. The company continues to shift toward a FOCO (Franchisee Owned Company Operated) model, now including approximately 30 stores in the South.
• Middle East: Recorded revenue of ₹1,073 crores and a PAT of ₹24 crores. Growth remains stable at 28% YoY. Management is exploring franchise opportunities with Arab investors to potentially accelerate expansion beyond the current target of 6-7 new showrooms annually.
• Candere (E-commerce): Achieved a major milestone by turning PAT positive (₹3 crores) on the back of 144% revenue growth. The segment now operates 110 showrooms. Future focus is on inventory optimization in existing stores to drive higher same-store sales.

Company-Specific & Strategic Commentary

• Franchise Expansion: The company added 21 gross showrooms (18 net) in India during Q3. Management targets adding 80-90 Kalyan India stores annually for the next two years, primarily through the capital-light FOCO model.
• New Brand Launch: A new “Regional Brand” is slated for launch in Q4 FY26, targeting a specific state in India with an initial plan for five showrooms in the next 12 months (CAPEX: ₹4-5 cr per store).
• Inventory & Product Mix: Studded jewellery mix is increasing due to organic demand and upselling during high gold price cycles. Management is also introducing 14-karat and 9-karat options to maintain volume and offer budget-friendly choices.
• Digital Transformation: Candere has successfully transitioned into an omnichannel platform with 110 stores, significantly contributing to the top-line growth with a ₹300 crore investment in expansion and international pilots (UK/US).

Guidance & Outlook

Risks & Constraints

Q&A Highlights

Gold Price & Franchisee Viability

• Question: How does 80-90% higher gold pricing impact new franchise sign-ups and tonnage? (Gaurav Jogani)
• Answer: Franchisees have strong financial backings. We manage this by increasing 18-karat inventory mix and ensuring franchisees keep a 30% capital buffer above requirements (Ramesh Kalyanaraman).

Margin Drivers

• Question: What drove the gross margin expansion this quarter? (Awais Bakshi)
• Answer: Key drivers include improved studded share, procurement changes made previously, and the increasing share of revenue from the newer, higher-margin FOCO showroom contracts (Ramesh Kalyanaraman).

Debt & Pledging

• Question: What is the status of promoter share pledging and debt? (Ashish Kanodia)
• Answer: Pledges were specifically for share buybacks. We have reduced loans over the last six months and have a clear 6-month plan to further reduce pledges (Ramesh Kalyanaraman).

Inventory Optimization

• Question: How are you managing inventory volume given the price surge? (Nihal Jham)
• Answer: We optimize over time rather than overnight. We trim volume slightly (30-40% of the price tax) to manage cash flow and turns, supported by a shift to 18-karat products (Ramesh Kalyanaraman).

Key Takeaway

Kalyan Jewellers delivered a robust Q3 FY2026, with consolidated revenue growing 42% YoY to ₹10,343 crores and PAT surging 90% to ₹416 crores. The quarter was highlighted by 30%+ same-store sales growth during the festive period and the e-commerce brand, Candere, turning PAT positive for the first time. Strategically, the company is successfully pivoting to a capital-light FOCO model, now operating approximately 200 franchise stores, while maintaining a aggressive expansion target of 80-90 new India stores annually. Despite the headwind of volatile gold prices, management remains upbeat about the ongoing wedding season and expects to end the year strongly. Key watch-points include the successful launch of a new regional brand in Q4 and the liquidation of non-core land assets by H1 FY2027 to further de-leverage the balance sheet.