Target: ₹138
CMP: ₹120.90
Kalyan Jewellers, in its exchange fillings today said that in Q3FY23 it witnessed robust momentum in both footfalls and revenue across India as well as in Middle East. Consolidated revenue is expected to grow over 13 per cent in Q3-FY23, whereas India business to report +12 per cent growth YoY despite on high base.
Management said that company witnessed strong operating momentum across India business led by the resilience of category business. Non-south market recorded higher revenue growth largely due to sales from new showroom.
Management stated that gross margin expected to improve on QoQ largely driven by improvement in studded share and increase revenue share from non-south markets. In addition, the recently concluded quarter it was benefited from big-ticket weddings deferred in Jan’22 early this year, however online jewelry format, Candere recorded slight de-growth.
In the middle east operation, it is expected to grow by over 24 per cent y-o-y. Management expects to open 11 new franchised showrooms across non-south markets for next 3 months to launch of 52 new showrooms during CY 2023.
We remain positive on the business momentum and retain Buy with a DCF based Target Price of ₹138 (implying 21.9x avg. FY24/25E EPS).