Detailed Narrative
Strong Q4 and Full Year FY26 Performance
Kalyan Jewellers reported a robust Q4 FY26, with consolidated revenue growing 66% to INR 10,275 crores and consolidated PAT surging 118% to INR 410 crores. For the full financial year FY26, consolidated revenue reached INR 35,740 crores, a 43% increase from FY25, while consolidated PAT grew 89% to INR 1,350 crores. The India business contributed significantly with Q4 revenue of INR 8,990 crores and PAT growth of 97%.
Candere's Turnaround and Growth
The Candere business demonstrated exceptional performance in FY26, recording a 160% revenue growth. More importantly, Candere turned PAT positive from the second half of FY26, reporting a profit of INR 3 crores in Q4 FY26 compared to a loss of INR 12 crores in the prior year. For FY27, Candere plans to focus on driving Same-Store Sales Growth (SSSG) and expanding its showroom footprint, with 50-55 new showrooms planned.
Aggressive Showroom Expansion Plans
In FY26, Kalyan Jewellers launched 129 new showrooms across its Kalyan and Candere formats, including its first Kalyan showroom in the U.K. The company has ambitious plans for FY27, targeting the opening of 150 new showrooms across Kalyan, Candere, and a new regional brand. The expansion in South India will focus on metros like Bangalore, Chennai, and Hyderabad, with 13-15 new showrooms, while over 60-65 showrooms are planned for regions outside South India.
Debt Reduction and Capital Allocation Strategy
The company successfully reduced its non-GML debt in India by INR 360 crores in FY26, bringing the total non-GML debt down from INR 1,300 crores to INR 300 crores over the last three years. Management aims to be completely non-GML debt-free in FY27, potentially by H1 FY27. Approximately 50% of the cash generated will be allocated to dividends, debt reduction, and capex, with the remaining 50% earmarked for Candere and the new regional brand.
Gross Margin Dynamics and Interest Cost Outlook
Gross margins have been improving and maintained, though a slight reversal was noted in Q4 FY26, attributed to seasonal product mix and regional revenue differences. The company expects a reduction of INR 50 crores in interest costs for FY27, comprising INR 30 crores from non-GML debt reduction and INR 20 crores from a one-off📎 adjustment in Q4 FY26. India standalone PBT margin is expected to remain stable at 5.5%-5.6%.
Managing Gold Price Volatility and ROCE
Kalyan Jewellers employs a strategy to manage ROCE amidst rising gold prices. For every INR 100 increase in gold price, inventory at stores is increased by INR 30-40, while sales volume is reduced. The company also focuses on promoting studded jewelry and reducing gold purity (e.g., from 22K to 18K or 14K) to make jewelry more accessible to customers and mitigate the impact of higher gold prices.
Middle East Expansion and New Brand Delay
The company is actively pursuing a major franchisee expansion in the Middle East through Arab investors, with discussions ongoing for converting FOCO showrooms to COCO. However, the launch of the new regional brand in India is currently delayed, awaiting political stability in the target state.