Kalyan Jewellers India shares up 9% today; Buy stock, 42% upside ahead, says MOFSL

Shares of Kalyan Jewellers India Ltd climbed over 9 per cent in Friday's trade, following the jeweller's December quarter results. MOFSL has maintained its 'Buy' rating on the stock with a target that suggests 42 per cent upside ahead for the jewellery stock over Thursday's closing price.

With the successful scale-up of its new franchise businesses (40 per cent revenue contribution) and sustained success in non-southern markets, Kalyan Jewellers has established itself as a leading brand in the industry, MOFSL said.

"Its non-south expansion has improved the studded jewelry mix, while asset-light expansion supports cash flow generation for debt repayment and enhances profitability by lowering interest costs. It is also gaining momentum in the Middle East and the US," it noted.

However, with a slowdown in urban markets, there is a possibility of pressure on discretionary categories in FY26. Due to this, MOFSL said it has normalised its target multiple to 50 times December 2026 EPS and suggested a target price of Rs 625.

The Kalyan Jewellers India stock rose 9.31 per cent to hit a high of Rs 481.30. Despite this, the scrip still is down 38.47 per cent in January so far. MOFSL's subsidiary Motilal Oswal Asset Management Company recently denied rumours suggesting its money managers were bribed to invest in Kalyan Jewellers. It called the allegations baseless, malicious and defamatory allegations.

"These baseless accusations are a deliberate attempt by individuals with vested interests to malign the good reputation that our firm and leadership have built over decades. Such baseless attacks on our integrity are completely unacceptable to us. Motilal Oswal Financial Services (MOFSL) has a legacy of nearly four decades of working with ethical practices and transparency," it said earlier.

Kalyan Jewellers’ Q3 consolidated revenue grew 40 per cent, which was in line with MOFSL estimates. Gross margin for the Indian business contracted 170 bps YoY to 12.8 per cent after adjusting the inventory loss. The margin contraction was likely due to the rising mix from franchised stores, the brokerage said.