KALYANKJIL - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.6

📊 Core Financials

• Quarterly PAT improved slightly from ₹256 Cr. to ₹262 Cr. (stable growth).
• ROCE at 15.7% and ROE at 15.5% indicate decent efficiency.
• Debt-to-equity ratio at 0.62 shows moderate leverage, higher than ideal.
• Cash flows supported by consistent profitability, though debt levels need monitoring.

💹 Valuation Indicators

• P/E Ratio: 54.4 (significantly higher than industry PE of 26.2, suggesting overvaluation).
• P/B Ratio: ~9.5 (CMP ₹485 / Book Value ₹51.1).
• PEG Ratio: 1.14 (reasonable, but valuations remain stretched).
• Intrinsic Value: Lower than CMP, limited margin of safety.

🏢 Business Model & Competitive Advantage

• Kalyan Jewellers operates in retail jewellery with strong brand presence across India.
• Competitive advantage lies in brand trust, wide retail network, and diversified product offerings.
• Strong consumer demand in festive seasons and wedding markets supports growth.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive near ₹400–₹440 (closer to 52-week low ₹399).
• Long-Term Holding: Suitable for investors seeking exposure to jewellery retail growth, but current valuations are expensive.

✅ Positive

• Quarterly PAT growth remains stable at ₹262 Cr.
• ROE and ROCE both above 15%, showing efficiency.
• DII holdings increased (+1.22%), reflecting domestic confidence.

⚠️ Limitation

• High P/E (54.4) and P/B (~9.5) indicate stretched valuations.
• Debt-to-equity ratio at 0.62 is relatively high.
• EPS at ₹8.94 is modest compared to valuation multiples.

📉 Company Negative News

• FII holdings reduced significantly (-2.71%), showing weak foreign sentiment.
• Stock trading below DMA 50 & DMA 200, reflecting bearish momentum.

📈 Company Positive News

• Quarterly PAT improved slightly, showing resilience.
• Strong festive and wedding demand continues to support sales growth.

🏭 Industry

• Jewellery retail industry benefits from cultural demand and rising disposable incomes.
• Industry PE at 26.2, indicating sector valuations are moderate compared to Kalyan’s premium.

🔎 Conclusion

Kalyan Jewellers shows stable profitability and strong brand presence, but valuations are stretched with high P/E and P/B ratios. Debt levels are moderate but need monitoring. Entry is advisable closer to ₹400–₹440 for better risk-reward. Long-term investors may benefit from jewellery retail growth, though current valuations limit near-term upside.