Kalyan Jewellers India (KALYANKJIL) Q2 24/25 earnings summary

Executive summary

• Consolidated revenue grew 37% year-over-year in Q2FY25, with India revenue up 39% and Middle East revenue up 27%; the company operates 267 showrooms in India and 36 in the Middle East as of September 2024.

• The company leverages a hyperlocal business model, a strong grassroots network, and a diversified product portfolio to address varied customer segments.

• Strategic priorities include capital-light expansion via franchise (FOCO) stores, focus on higher-margin studded jewellery, and deepening customer outreach.

• Standalone and consolidated unaudited financial results for the quarter and half year ended 30 September 2024 were approved by the Board on 13 November 2024.

• The review reports from statutory auditors confirm no material misstatements in the financial disclosures.

Financial highlights

• Q2FY25 consolidated revenue was ₹60,655 million, up 37% year-over-year; H1 consolidated revenue was ₹116,010 million, up 32% YoY.

• Q2FY25 consolidated PAT was ₹1,303 million, down 3% YoY; H1 consolidated PAT was ₹3,079 million, up from ₹2,784 million YoY.

• EBITDA margin for Q2FY25 was 5.4% (vs 7.1% Q2FY24); gross profit margin declined to 12.6% from 14.3% due to higher franchise share and a one-time customs duty loss.

• Dividend payout in FY24 exceeded 20%; significant debt reduction achieved, with non-GML loans in India at ₹7,464 million as of September 2024.

• Net cash from operating activities (consolidated) for H1 FY25 was ₹8,850 million, up from ₹5,180 million YoY.

Outlook and guidance

• Management is optimistic about the ongoing wedding season and expects to end the calendar year strongly.

• FY2025 store opening target: 80 Kalyan and 50 Candere showrooms; expansion plans for FY2026 may exceed FY2025 levels.

• Targeting mid to high single-digit same-store sales growth and further expansion via capital-efficient franchise strategy.

• Continued focus on deleveraging, free cash flow generation, and rewarding shareholders through dividends.

• Management continues to focus on core jewellery business and has disposed of non-core assets, including the sale of one aircraft during the period.