Should You Invest in Kalyan Jewellers Ltd?

Kalyan Jewellers, one of India's largest jewellery retailers, has grown sales and profits strongly at ~30%+ CAGR over the last 3 years. Its stock has delivered an exceptional ~100%+ CAGR returns in the last 3 years. 

Finology Research Desk has analysed the company this week, providing a clear verdict on whether Kalyan Jewellers India Ltd. is a good long-term stock or not. Find out in this article. 

What makes the jewellery industry special?

The gems and jewellery industry is one of the oldest and most significant sectors in India, contributing 7% to the country’s GDP and 15% to its total merchandise exports. It was valued at USD 87.82 billion in FY24 and isexpected to reach USD 195.35 billion by FY32, growing at a CAGR of ~10.51%over this period, driven by rising disposable income, urbanisation, technological advancements, rise of flexible payment options and import duty reductions (from 15% to 6% in Budget 2024)With a share of 24.2% of the global jewellery market in 2024, India is expected to be a global leader by 2030 in terms of revenue.

 

Source: Markets and Data, Finology Research Desk

The industry mainly includes jewellery made from gold, silver, platinum, diamonds, and other precious stones. Gold jewellery continues to dominate, accounting for around ~78% of the industry’s revenue in 2023, primarily because of its cultural significance and popularity in India.

India became the world’s largest consumer of gold jewellery with 563.4 tons consumed in 2025. Thus, beating China’s consumption, which stood at 511.4 tons. Higher gold consumption was mainly driven by increased demand and higher consumption, particularly. As per the ICRA forecast, the domestic gold consumption is expected to increase by 12 to 14% in value by 2026.

With increasing awareness, the demand for lab-grown diamonds is also rising rapidly, driven by their affordability, sustainability, and identical physical and chemical properties to natural diamonds. The market was valued at USD 0.45 billion in 2023 and is expected to reach USD 1.2 billion by 2030, growing at a CAGR of 14.8%. Sensing the opportunity, the Indian government has announced a 5-year research grant to IIT Madras to set up the Indian Centre for Lab-Grown Diamonds and boost innovation in the sector. With a 25% global market share, India is the second-largest player in this industry after China which leads with over 50%..

The overall jewellery industry is still largely unorganised, consisting of local jewellers holding 60% market share as of 2025. However, the organised players are rapidly increasing their presence in the industry and are expected to capture 50% market share by 2029, driven by changing customer preferences for trusted brands, enhanced shopping experience, wider product variety and increasing awareness about hallmarking.

 

Source: Annual Report FY24, Finology Research Desk

Kalyan Jewellers Business Model:

Founded in 1996 by T S Kalyanaraman, Kalyan Jewellers is engaged in the business of designing, manufacturing, and selling a wide range of gold, diamond, studded, and other jewellery products, from wedding jewellery to daily wear. It is the second-largest player in the organised jewellery segment with a 7% market share, just behind Titan, the market leader with 8%. The company has a global presence across six countries, including India, the Middle East, and the USA.

In India, Kalyan Jewellers operates ~278 stores under the Kalyan brand. It also owns Candere, its online-first jewellery platform, which has also expanded into offline retail with 73 physical stores. Together, Kalyan and Candere offer a blend of online convenience and in-store experience, catering to evolving customer preferences.

 

Source: Investors Presentation Q4 FY25, Finology Research Desk

Kalyan Jewellers Revenue Mix:

 

Source: Investors Presentation FY25, Finology Research Desk

Kalyan Jewellers reported revenue of Rs 25,045 crore in FY25, with around 86% coming from the Indian market. Within its domestic operations, the revenue split was fairly balanced, with 48% from southern states and 52% from non-southern regions. The International business (Middle East and USA) contributed the remaining 14%, showing that while global presence is growing, India remains the core market.

 

Source: Investors Presentation FY25, Finology Research Desk

Within the Indian operations, gold jewellery contributed 69% of the revenue, while studded jewellery, which includes diamonds and precious stones, accounted for 31%. The rising share of this higher-margin studded category has supported the overall improvement in profitability, reflecting a steady shift in the product mix towards more premium offerings.

Kalyan Jewellers Unit Economics:

 

 

Source: Financial Results FY25, Finology Research Desk

Cost of goods sold (COGS) remains the largest component of Kalyan Jewellers' operating expenses, increasing by 37% YoY to Rs 21,760 crore in FY25 from Rs 18,584 crore in FY24. This substantial increase is largely in line with the growth in the company's revenue of about 34.7%. Since gold and precious stones make up most of the raw materials in the jewellery business, COGS consistently accounts for a significant portion of total income, ranging around 82 to 87% of the total income.

Finance costs increased by 11% to Rs 360 crore in FY25 from Rs 323 crore in FY24, primarily reflecting a substantial 42% rise in lease liabilities. This increase was largely due to the addition of new retail showrooms and outlets, which contributed to higher interest expenses. Despite this, finance costs as a percentage of total income have steadily declined from 4.4% in FY21 to just 1.4% in FY25.

Depreciation and amortisation expenses increased to Rs 343 crore in FY25 from Rs 274 crore in FY24, reflecting the company’s continued investment in new retail showrooms and infrastructure. Despite the rise in absolute terms, depreciation and amortisation have shown a slight decline as a proportion of total income (from 2.6% in 2021 to 1.4% in FY25, indicating that the growth in fixed assets was balanced with overall revenue growth.

Other expenses, including employee benefit expenses, advertising and sales promotion, repairs and maintenance, and logistics, increased to Rs 1,766 crore in FY25 from Rs 1,401 crore in FY24. These expenses represent approximately 7-9% of total income, with a major portion attributable to employee expenses and advertising and sales promotion.

Tax expenses increased by 27% to Rs 245 crore in FY25 from Rs 193 crore in FY24. The effective tax rate remained steady at around 25%, in line with prevailing corporate tax norms, indicating consistent tax compliance.

Net profit margin contracted slightly to 2.8% in FY25 from 3.2% in FY24. This slight dip was mainly due to the 37% increase in COGS, which outpaced the company’s 35% revenue growth, leading to a moderate compression in operating margins. Over the five years, net profit margins have ranged between 2.1% and 3.2%, highlighting relatively stable profitability despite variations in raw material prices.

Porter’s Five Forces Analysis of Kalyan Jewellers:

 

 

Source: Finology Research Desk

1. High Bargaining Power of Buyers: Customers in India’s jewellery market are highly price sensitive and have a wide range of options, from large retailers like Tanishq, Kalyan to numerous local jewellers. This gives buyers considerable negotiating power, forcing Kalyan to compete on brand differentiation, better offerings. Loyalty programs and other promotional schemes can help mitigate this force for a while, but competitive pricing pressure remains a persistent threat

2. Moderate Bargaining Power of Suppliers: For large brands like Kalyan Jewellers, the bargaining power of suppliers is generally low. While gold price volatility affects all players equally, larger companies are better positioned to manage this risk due to bulk purchasing and strong supplier relationships, which give them greater control over the supply terms. In contrast, smaller retailers have little to no negotiation power and are more vulnerable to supply disruptions and price fluctuations.

3. High Competition in the Market: The Indian jewellery industry is largely unorganised (60%) and intensely competitive, with thousands of local retailers alongside large brands fighting for market share. In a market worth over USD 87 billion, Kalyan Jewellers must maintain its strong brand image, innovation, and extensive distribution to stay ahead.

4. Moderate Threat of Substitutes: While traditional jewellery remains culturally significant in India, there is a rising threat from alternatives such as imitation or artificial jewellery, with 36% brides opting for it in 2023, driven by affordability and various trendy options. Overall, the unique value and social importance of precious jewellery limit this threat but do not eliminate it entirely.

5. Moderate Threat of New Entrants: The jewellery market is relatively open to new entrants due to a lack of major regulatory barriers and rising demand. However, large capital requirements, regulatory compliance, and the strong brand reputation of established players like Kalyan create significant barriers to entry. A pan-India footprint, diversified product mix, and strong marketing network further protect Kalyan Jewellers from new competitors.

What led us to reject Kalyan Jewellers Ltd. for Finology 30?

1. High promoter pledging - Promoter share pledging in Kalyan Jewellers increased significantly from 0% in June 2024 to 24.89% in June 2025. Such a high level of pledging raises financial risk, increases stock price volatility and raises serious concerns around corporate governance and promoter discipline.

 

 

Source: Finology Ticker

2. Intense Competition: The jewellery industry is witnessing intense competition with the entry and expansion of major players. Aditya Birla Group entered the market in 2024 with its new brand, Indriya, launched under Novel Jewels. Backed by a Rs 5,000 crore investment, it is pursuing an aggressive strategy to become one of India’s top three jewellery retailers within five years. It has already opened large-format stores in 27 states, including Delhi, Hyderabad, Mumbai, and Pune, and aims to scale up to 100 stores by FY26. Reliance is also preparing to launch a luxury jewellery line led by Isha Ambani, utilising Reliance Retail’s capital strength and distribution networks, further intensifying industry competition.

Meanwhile, Tata-backed Tanishq remains the market leader. Including Mia by Tanishq, Zoya, and CaratLane, it had over 1,000 stores as of December 2024 and holds an 8% share of the organised market, supported by strong brand reputation, consumer trust, and rapid store expansion. Kalyan Jewellers, though well established, is now facing much tougher competition. Unlike its peers who are backed by large conglomerates and have access to deep financial resources, according to us Kalyan lacks the scale, retail footprint, and financial strength that players like Tata, Reliance and Aditya Birla can bring to the market.

The Bottom Line

For Finology 30, our ideology has been to focus on business models with a strong moat and strong management pedigree. For now, Kalyan Jewellers Ltd. failed to pass our investment checklist. So, for now we decided not to go ahead with Kalyan Jewellers Ltd.

However, there are very few stocks that made it to Finology 30. Check them out here.