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Customs duty write-off impacts near-term profitability Alive 2, weakening 2, dead 0.
View Bear Cases →Kalyan Jewellers India Ltd — Q2 FY25
Kalyan Jewellers reported a stellar Q2 FY25 with consolidated revenue of ₹6,065 crore, up 37% YoY, driven by broad-based growth across gold and studded categories.
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Kalyan Jewellers reported a stellar Q2 FY25 with consolidated revenue of ₹6,065 crore, up 37% YoY, driven by broad-based growth across gold and studded categories. India revenue grew 39% YoY, with strong same-store sales momentum. The company opened 49 Kalyan and 34 Candere showrooms in H1, on track for 80 Kalyan and 50 Candere for the full year. Management highlighted robust Diwali season demand with SSG exceeding 20% for the Diwali-minus-30-day period. A one-time customs duty write-off of ₹70 crore impacted PBT, but adjusted PBT growth was 39%. Debt reduction is on track with ₹143 crore of non-GML repaid. Risks include further customs duty adjustments in Q3 (~₹50 crore) and slower international expansion, particularly in the Middle East and US, though a US store is expected by end of current quarter.
कल्याण ज्वैलर्स ने दूसरी तिमाही में शानदार प्रदर्शन किया। कंपनी की कुल कमाई ₹6,065 करोड़ रही, जो पिछले साल से 37% ज्यादा है। सोने और जड़ाऊ गहनों की बिक्री बढ़ने से यह मुमकिन हुआ। भारत में कमाई 39% बढ़ी और पुरानी दुकानों पर भी अच्छी बिक्री हुई। कंपनी ने इस साल 80 कल्याण और 50 कैंडेयर शोरूम खोलने का लक्ष्य रखा है। दिवाली के समय बिक्री 20% से ज्यादा बढ़ी। एक बार का कस्टम ड्यूटी खर्च ₹70 करोड़ लगा, लेकिन असली मुनाफा 39% बढ़ा। कंपनी ने ₹143 करोड़ कर्ज चुकाया। आगे कस्टम ड्यूटी में बदलाव और अमेरिका में दुकान खोलने की योजना है।
Bear Cases2 alive · 0 deadPromises0 met · 3 missedRisks4 trackedTranscriptfull text
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Customs duty write-off impact in Q3
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Read Transcript →Quarter Snapshot
Same Store Sales Growth (SSG) - Diwali minus 30 days
>20%
>20% YoY
SSG for the Diwali minus 30 day period compared to the base year, indicating strong festive demand.
India Revenue Growth
39%
+39% YoY
India business revenue grew 39% YoY in Q2, outpacing consolidated growth.
Franchisee Store Count (India)
132
+27 stores since Sep 2024
Franchisee stores in India increased to 132 as of the call date, up from 105 at end of Q2.
Candere Showroom Count
46
+34 stores in H1 FY25
Candere showrooms reached 46, with 34 opened in H1 FY25, on track for 50 by year-end.
What Changed vs Last Quarter
NEW
Debt reduction target of INR 300 crore for FY25
The company aims to reduce non-GML working capital loans in India by INR 300 crore in FY25, with INR 143 crore already achieved in H1.
NEW
Debt reduction target of INR 350-400 crore for FY26
Management guided for a higher debt reduction of INR 350-400 crore in the next financial year, supported by improved cash flows from the franchise model.
NEW
US showroom opening by end of Q3 FY25
The first US showroom, delayed earlier, is expected to open by the end of the current quarter (Q3 FY25).
UPDATED
Target 80 Kalyan and 50 Candere showrooms in FY25
Management reiterated the target to open 80 Kalyan Jewellers and 50 Candere showrooms in India for the current financial year, with 49 Kalyan and 34 Candere already opened in H1.
DROPPED
India PBT margin target of ~5% for FY25
Management aims to achieve ~5% PBT margin in India for the full year, despite Q1 margin pressure from higher ad spends.
DROPPED
First US showroom before Diwali
The company plans to launch its first showroom in the US before the Diwali festive season.
DROPPED
Convert 4 Middle East showrooms to franchise in Q2
Four company-owned showrooms in the Middle East will be converted to franchise model in Q2, with proceeds used to reduce regional debt.
NEW RISK
Customs duty write-off impact in Q3
A one-time loss of INR 120 crore from customs duty reduction will be fully recognized, with INR 70 crore in Q2 and the remaining ~INR 50 crore expected in Q3.
NEW RISK
Slower international expansion
Management acknowledged slower-than-planned expansion in the Middle East and international markets, with only four FOCO stores in Oman and a delayed US opening.
NEW RISK
Franchisee margin dilution risk
As franchisee revenue share increases (currently ~32-33%), consolidated gross margins could face pressure since franchisee stores have lower margins (~8%) compared to company-owned stores (~15.5-16%).
RISK GONE
One-time inventory loss from customs duty cut
The reduction in gold import duty will result in an inventory loss of INR 120-130 crore, impacting profitability in Q2 and Q3.
RISK GONE
Margin expansion may be delayed if competition reacts
Management admitted that if competitors increase marketing spend, Kalyan may need to respond, delaying margin improvement.
RISK GONE
Candere brand campaign may not yield immediate results
Candere's store-level throughput is currently low, and a nationwide campaign is planned only after reaching a minimum store count, posing execution risk.
🤫 Topics management stopped discussing
Mentioned in Q1 FY25, Q2 FY24, Q3 FY24, Q4 FY24
Management reiterated plans to open 80 showrooms in FY25, with 35 Kalyan and 20 Candere stores expected before Diwali.
Mentioned in Q1 FY24, Q2 FY24, Q4 FY24
Sharp gold price movements cause temporary purchase pauses; volume may decline if prices remain elevated, affecting revenue growth.
Mentioned in Q1 FY24, Q1 FY25
Four company-owned showrooms in the Middle East will be converted to franchise model in Q2, with proceeds used to reduce regional debt.
Mentioned in Q2 FY24, Q4 FY24
Shift to franchisee model reduces EBITDA margins (franchisee EBITDA ~8% vs own ~20%), though PBT margins improve.
Mentioned in Q2 FY24, Q3 FY24
Middle East PAT fell to INR 14 crore from INR 17 crore YoY, driven by a 2% interest rate hike and lower-margin franchise mix.
Fast read
Guidance and risk preview
Management reiterated the target to open 80 Kalyan Jewellers and 50 Candere showrooms in India for the current financial year, with 49 Kalyan and 3...
A one-time loss of INR 120 crore from customs duty reduction will be fully recognized, with INR 70 crore in Q2 and the remaining ~INR 50 crore expe...
View Risks →