Kalyan Jewellers to recalibrate expansion plans towards Tier II and beyond cities, says Ramesh Kalyanaraman 

Kalyan Jewellers recently reported a significant financial performance for the first quarter of FY25. The company saw a robust 23.6% year-on-year increase in net profit, reaching Rs.177.8 crore 

Bengaluru— Kalyan Jewellers is set to shift its strategic focus towards tier II and beyond cities in the coming years, according to Ramesh Kalyanaraman, Executive Director of the company. During a recent interaction with a news outlet, Kalyanaraman highlighted the company’s plan to capitalize on the growth opportunities in these markets, which currently lack Kalyan Jewellers’ presence. 

“We are targeting tier II cities and beyond because these markets are more open and we have limited presence there,” Kalyanaraman said. The move comes as part of a broader expansion strategy to tap into the potential of these emerging markets. 

Kalyan Jewellers recently reported a significant financial performance for the first quarter of FY25. The company saw a robust 23.6% year-on-year increase in net profit, reaching ₹177.8 crore. The company’s EBITDA rose by 16.5% to Rs.376.1 crore compared to Rs.322.8 crore in the same period last year. However, the EBITDA margin slipped to 6.8% from 7.4% due to the company’s franchisee model, known as FOCO, which involves sharing gross margins with franchise partners. 

“Our revenue growth has been excellent, with consolidated revenue up by 27% and PAT increasing by 24%,” Kalyanaraman explained. He attributed the profit rise primarily to revenue growth, although he noted that increased expenditure on advertising impacted PAT growth. 

Regarding Candere, the lifestyle jewellery brand recently acquired by Kalyan Jewellers, Kalyanaraman stated that it currently contributes marginally to profit growth. The company has recently invested in expanding Candere’s physical store presence and will launch a major branding campaign around Diwali. The goal is to establish Candere as a significant player in the lifestyle jewellery segment. 

Internationally, Kalyan Jewellers plans to open its first US store before Diwali, though the company remains predominantly focused on the Indian market, which contributes 85% of its revenue. The remaining 15% comes from the Middle East, a ratio Kalyanaraman aims to maintain. 

Kalyan Jewellers operates 230 stores in India and 35 in the Middle East. This fiscal year, the company plans to open 80 new stores, with a significant concentration in tier II and beyond cities, including 35 stores before Diwali. 

On the impact of recent custom duty cuts on gold and silver demand, Kalyanaraman noted mixed short-term effects. Increased footfalls and strong same-store sales growth were observed, but a one-time write-off of approximately ₹120 crore will affect Q2 and Q3 financials. Over the mid to long term, he believes the duty cuts will reduce the incentive for customers to turn to unorganised players. 

As Kalyan Jewellers gears up for an ambitious expansion, the company’s focus remains firmly on capturing growth in untapped markets and leveraging strategic investments in emerging brands and international ventures. 

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