Kalyan Jewellers India (KALYANKJIL) Investor Update summary

Clarifications on rumors and governance

• No plans to purchase aircraft; previous business jets sold, only a helicopter remains with no sale plans.

• No IT raids or auditor issues; regular audits ongoing and high standards in governance and disclosures maintained.

• No FIRs against the company or promoters; a summons received relates to a civil dispute with a franchisee.

• Allegations of bribery or regulatory inquiries are denied, emphasizing integrity and transparency.

Franchisee model updates and expansion

• Franchisee agreement revised for new stores: franchisees now invest in both CapEx and inventory, reducing ROSI from ~17% to ~15%.

• Changes apply only to new agreements; existing franchisees remain on old terms.

• 50 new showrooms opened this year, 30 more planned, and 75+ for next year, all under the new model.

• Franchisee closures are minimal (3-4 out of 100+), mainly due to contract breaches; terminated stores are converted to company-owned.

Financial and operational updates

• Free cash flow used to reduce debt and release real estate collateral; buyback may be considered post-debt repayment.

• One-time inventory loss from gold duty cut fully absorbed in Q2 and Q3; no further impact expected in Q4.

• Store-level gross margins and franchisee margins remain stable; no margin hikes to offset one-time losses.

• Gold inventory is fully hedged, with 40% via gold metal loans and the rest through exchanges.