Diwali Sparkle: Why ICICI Sees 50% Upside in This Jewellery Giant

As the festive season approaches, ICICI Securities has issued a bullish call on Kalyan Jewellers, forecasting a potential 50% upside in its stock price. The upgraded rating reflects optimism driven by robust festive demand, strategic expansion, and a strengthening financial position. This comes amid gold prices trading at multi-year highs, traditionally spurring increased jewellery purchases.

 

Festive Demand To Drive Growth Momentum

ICICI Securities expects strong same-store sales growth in FY26, fueled by vibrant festive and wedding-related spending despite elevated gold rates.

 

The onset of Navratri and Diwali is anticipated to accelerate purchases, with Kalyan introducing more affordable, lower-carat lightweight jewellery to cater to daily-wear needs.

 

Although a high base from Q2 FY25, which saw 37% revenue growth due to a customs duty cut, poses some challenge, early festive demand is likely to offset this impact.

 

Expansion Strategy Positioned For Outperformance

Kalyan’s aggressive rollout of new outlets through its asset-light Franchise Owned, Company Operated (FOCO) model gives it an edge, with 90 stores targeted in FY26 alone.

 

The omni-channel platform Candere adds a fresh growth lever, boosting reach alongside brick-and-mortar stores.

 

Over FY23–25, 152 stores were added, underscoring rapid network expansion that ICICI Securities sees as pivotal in outpacing peers.

 

Financial Health On An Upswing

Kalyan has been reducing its debt burden steadily, cutting working capital debt by Rs 520 crore in FY25 and targeting an additional reduction of Rs 350–400 crore in FY26.

 

The stock’s over 35% correction in the past year offers a margin of safety, with current valuations making the call for renewed investor interest attractive.

 

Improving balance sheet metrics and sustained revenue momentum bolster confidence in earnings growth.

 

In summary, with a compelling combination of strong festive demand, rapid store expansion, and positive financial restructuring, Kalyan Jewellers stands poised for significant stock appreciation ahead of Diwali, according to ICICI Securities.

 

Sources: Financial Express, NDTV Profit, Business Today, ICICI Securities Research Reports.