The shares of this largecap company surged around 4 percent in Thursday’s trading session after a target price raise by brokerage firm HSBC. The stock has delivered more than 190 percent return to its shareholders in one year.
Price Movement:
With a market capitalization of Rs. 69,634 crores, the shares of Kalyan Jewellers (NS:KALN) India Ltd started Thursday’s trading session on a higher note at Rs. 664.25 compared to its previous close of Rs. 656.80.
During the trading session, the shares hit a high of Rs. 683.15, gaining around 4 percent, also recorded as the company’s fresh 52-week high and are currently trading at Rs.
Is Kalyan Jewellers a buy or sell? What is its Fair Value? What are the company's health parameters? What are the positive and negative factors driving the company -- ProTips? Know all the answers on the company's overview page here.
What Happened:
Such a positive movement in the share price was observed after global brokerage firm HSBC maintained its positive stance on the stock.
HSBC has maintained a ‘Buy’ recommendation on Kalyan Jewellers, and revised upward its stock price target to Rs. 810 from Rs. 600 per share earlier, implying a potential upside of 20% compared to the current market price.
Despite the stock’s significant eightfold increase over the past two years, HSBC remains optimistic about the jewellery maker. The global brokerage firm believes the stock is still in the midst of its value-creation phase and projects further growth.
Furthermore, HSBC sees clear potential for Kalyan Jewellers to quadruple its store count by the end of the decade, driven by their capital-light expansion strategy. The ongoing exponential growth is expected to prevent any de-rating of the stock’s valuation multiple.
Additionally, HSBC also highlighted several long-term growth catalysts, noting that Titan’s expansion journey is a useful guide for tracking long-term growth catalysts.
Moreover, Kalyan Jewellers is currently trading at an estimated FY26 PE ratio of 56x, roughly 10 percent below Titan’s, making it a more appealing investment compared to other options in the consumer sector.
Financials:
Looking at the company’s financial performance, the revenue surged by 22 percent from Rs. 4,535 crores during the March quarter to Rs. 5,535 crores in the June quarter. In addition, the net profits zoomed by 30 percent from Rs. 137 crores to Rs. 178 crores during the same period.
Market Expansion:
The proportion of revenue from non-South markets has risen to 49 percent, up from 44 percent last year. Additionally, the company plans to inaugurate 35 new Kalyan showrooms and 20 Candere showrooms before Diwali.
Moreover, Kalyan Jewellers is positioned to benefit significantly from the projected growth in the jewellery retail sector, with revenue expected to increase by 22-25 percent annually for the current fiscal year, as reported by Crisil Ratings.
This is an improvement from earlier estimates of 17-19 percent growth. The anticipated surge in revenue is largely attributed to a decline in retail gold prices, following a substantial duty cut from 15 percent to 6 percent announced in the Union Budget, which is expected to drive higher sales volumes.
Important Financial Ratios:
In terms of key financial metrics, the company reported a Return on Equity (RoE) of 14.25 percent and a return on capital employed (RoCE) of 21.24 percent for the period spanning FY23-24. Further, the net profit margin stood at 3.21 percent during the same timeframe.
Written By Vaibhav PatilDisclaimer
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