Kalyan Jewellers India Limited

Kalyan Jewellers reported a strong Q2 FY26 with consolidated revenue growing 30% YoY to ₹7,856 crores. Consolidated EBITDA increased by 55.8% to ₹497 crores, and PAT surged 100% to ₹261 crores. For the first half of FY26, consolidated revenue reached ₹15,125 crores, up 31% YoY, with PAT growing 70% to ₹525 crores. The company noted an exceptional 9 days of Navratri sales and a same-store sales growth exceeding 30% for the 30-day period ending Diwali, with momentum continuing into the current quarter.

The company made significant progress in debt reduction, repaying ₹130 crores in Q2 FY26, bringing non-GML debt to ₹550 crores as of September 30, 2025. This puts them on track to achieve the annual debt reduction target of ₹300 crores. Management aims to reduce non-GML debt to ₹400 crores by March 31, FY26, and become debt-free by the next financial year. Additionally, steps have been initiated to monetize ₹150-200 crores of non-core real estate assets, with liquidation expected by H2 of the next financial year.

Kalyan Jewellers opened 32 stores in Q2 FY26, comprising 15 Kalyan India stores, 2 Middle East stores, and 15 Candere stores. The full-year target is 84 Kalyan India stores, 6 international stores, and 80 Candere stores. While Candere is behind schedule with 30 openings so far, management remains optimistic about meeting the target. The Candere segment, however, reported a loss of ₹9 crores in Q2, but is targeted to achieve PAT neutral or positive status with ₹500 crores revenue by the end of FY26. Middle East operations showed modest growth with revenues of ₹866 crores and PAT of ₹15 crores.

The company's gross margins saw a slight increase of 0.2-0.3% due to a pilot project. Management expects Q3 gross margins to be better than Q2, and overall H2 PBT margins to be higher than H1 due to Q3 seasonality and interest savings from debt repayment. The pilot for backward integration, focused on negotiating with vendors for leaner credit periods to improve gross margins, is on track. A new regional brand, targeting non-aspirational, 100% local customers, is planned for launch in Q4 FY26 with an initial year ROCE target of 16-18%.

Despite strong SSG in COCO stores (15-16%), their revenue growth showed a 1% degrowth in Q2. This was clarified to be a result of strategic conversions from COCO to FOCO stores, rather than a decline in performance or market share. The company also addressed a high employee attrition rate of 52% overall and 85-86% for females, attributing it primarily to the My Kalyan marketing fieldwork division, which is considered an industry norm for such roles.