Kalyan Jewellers Share Price Up 2%; UBS Retains Buy Citing H2 Growth; Fresh Target Implies 56% Upside

Shares of Kalyan Jewellers India gained on Tuesday, September 29, after global brokerage UBS retained its Buy rating on the jewellery company and set a target price of 900 per share.

At the time of writing, the Kalyan Jewellers share price was trading around Rs. 577.50, up Rs. 13.50 or 2.39% during the session. UBS's target price of ₹900 implies an upside of nearly 56% from Tuesday's trading level.

UBS on Kalyan Jewellers

UBS is positive on Kalyan Jewellers and has pointed to a better growth outlook in the second half of the year despite a high base.
The brokerage has mentioned many factors supporting its view, including the company's continued store expansion, gold savings schemes and the ongoing gold exchange activity.

According to UBS, the impact of rising gold prices on jewellery demand and ticket sizes can vary across different segments of the business which means that higher gold prices may not affect all parts of Kalyan Jewellers' operations in the same manner.

One of the top factors pointed out by UBS is Kalyan Jewellers' aggressive store and network expansion.

The company has been on a rollout spree of its stores and is expected to help in its growth as it expands its retail footprint across markets. UBS also said that the visibility provided by gold savings schemes, which can support same-store growth (SSG).

Gold exchange activity is another area being watched by the brokerage. UBS expects exchange activity to surge, while the company manages margins accordingly.

Kalyan Jewellers Share Price Performance

Kalyan jeweller share today opened at Rs. 566 apiece on the NSE and surged to an intraday high of Rs. 580. The latest gains come after a weaker start to the week for the stock. On Monday, Kalyan Jewellers shares declined 1.62% to close at Rs. 563.70.

Despite the recent weakness, the stock has delivered a strong return over the longer term. Kalyan Jewellers shares have gained approximately 53.50% over the past six months.

The stock's 52-week range is Rs. 327.05 to Rs. 648.95, putting the current price roughly 12% below its 52-week high.

Kalyan Jewellers Valuation

At current levels, Kalyan Jewellers trades at a price-to-earnings (P/E) ratio of around 41x, compared with an industry P/E of approximately 63x, according to data by Trendlyne.

"The company's return on equity (ROE) is around 24%, showing its profitability relative to shareholder equity"

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