Citi Reiterates ‘Buy’ on Kalyan Jewellers Stock, Targets Massive Upside Amid Q1 Revenue Miss
Citigroup has reiterated a strong 'Buy' rating on Kalyan Jewellers, maintaining confidence in its long-term growth trajectory despite the company reporting consolidated revenue growth that fell short of brokerage expectations. The target price set by Citi suggests substantial potential for the stock, implying an upside exceeding 100% from current trading levels.Analyst Targets Signal Major Upside Potential
Citi has assigned a target price of Rs 750 per share for Kalyan Jewellers. This figure implies an approximate upside of 111 percent from Tuesday's closing rate of Rs 354.75. The brokerage view suggests that the foundation laid by the company’s operational model remains highly robust, despite recent quarterly performance setbacks.Evaluating Q1 Performance and Operational Health
Kalyan Jewellers reported consolidated revenue growth of 38 percent year-on-year in its June quarter, though this figure was below Citi's internal estimates. The India operations segment showed corresponding strength, recording 38 percent revenue growth. This domestic performance was significantly bolstered by a healthy same-store sales growth (SSSG) rate of 28 percent.Franchise Model and Digital Growth Drivers
The brokerage remains constructive on the company's sustained growth path, emphasizing its franchise-led expansion strategy as a core long-term driver. This asset-light model is crucial for scaling operations efficiently and improving return on capital employed (RoCE), requiring lower capital investment compared to fully owned stores.A key area of strength noted by Citi was the vigorous performance of Candere, Kalyan Jewellers' dedicated digital brand. The brand witnessed a remarkable 112 percent year-on-year jump in revenue during the quarter. During this period, the company expanded its omnichannel presence by adding five new Candere stores.
International Markets and Stock Market Reaction
Kalyan Jewellers’ international business segment also showed robust growth, reporting approximately 35 percent year-on-year increase. West Asia specifically contributed strong numbers with about 30 percent growth in that region. These international markets accounted for roughly 14 percent of the company's total consolidated revenue during the quarter.Despite these healthy operating metrics, investor sentiment reacted negatively to the revenue figures missing some market expectations. The stock declined by nearly 7 percent on Tuesday and closed at Rs 354.75. The company’s stock has also been under pressure, having fallen about 26 percent in 2026, trailing the Nifty 50 decline of approximately 6.7 percent over the same period.
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