Kalyan Jewellers India Limited (KALYANKJIL.NS) fair value

ACCE thesis

Kalyan Jewellers makes and retails gold, diamond and studded jewellery through its own showroom network across India and the Gulf, with a much smaller brand-licensed and digital presence layered on top. Its edge is scale and a brand that lets it keep taking share from unorganised local jewellers, a segment still a large majority of Indian gold jewellery sales. The main growth driver is store expansion in tier-2 and tier-3 cities, where organised players are gaining ground as customers shift toward hallmarked, certified product. Revenue growth of 45.7% is well ahead of most of the sector, but the 4.9% operating margin and 12.7% gross margin mean the business is thin-margin and sensitive to gold price swings, which deserves a close look. At 38.2x trailing and 27.3x forward earnings, the market is already paying for a sizeable earnings recovery, so the depth of margin expansion is the question to test.