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%; strong SSG of 23% in India and ~9% in the Middle East.

• The company operates 267 showrooms in India and 36 in the Middle East as of September 2024, leveraging a hyperlocal model and expanding via franchise (FOCO) stores.

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

• Standalone and consolidated unaudited financial results for Q2 and H1 FY25 were approved by the Board on 13 November 2024, with no material misstatements reported by auditors.

• Broad-based growth across gold and studded jewelry categories, with strong festive and wedding season momentum.

Financial highlights

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

• Q2FY25 consolidated PAT was ₹1,303 mn, down 3% year-over-year; H1 consolidated PAT was ₹3,079 mn, up 11% year-over-year.

• 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 mn as of September 2024.

• Net cash from operating activities (consolidated) for H1 FY25 was ₹8,850.17 mn, up from ₹5,179.71 mn year-over-year.

Outlook and guidance

• Strong momentum expected through the wedding season and year-end, with mid to high single-digit SSG targeted.

• FY2025 store opening targets reaffirmed; FY2026 store expansion expected to exceed FY2025 levels.

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

• Incremental showroom openings to focus on non-south Indian markets and calibrated Middle East expansion.

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