Kalyan Jewellers: A Sparkling Q2 and H1 FY26 Performance

Kalyan Jewellers India Limited, a prominent name in the Indian jewellery sector, has reported a robust financial performance for the second quarter and first half of fiscal year 2026. The company's consolidated revenue for Q2 FY26 surged by 30% year-on-year, reaching INR 7,856 crore. This strong growth was mirrored in the first half, with consolidated revenue climbing 31% to INR 15,125 crore. Profit After Tax (PAT) for Q2 FY26 doubled to INR 261 crore, while H1 FY26 PAT increased by 70% to INR 525 crore, underscoring significant profitability improvements.

The momentum was particularly strong during the festive season, with same-store sales growth (SSSG) exceeding 30% in the 30-day period leading up to Diwali. India operations were a key driver, with revenue growing 31% to INR 6,843 crore in Q2 FY26, supported by a healthy 16% SSSG. The Middle East segment also contributed positively, with Q2 FY26 revenue increasing by 8% to INR 866 crore, despite a sequential decline from Q1 FY26, and a 7% SSSG. Studded jewellery continues to be a significant contributor, accounting for 31% of India's revenue and 18% of the Middle East's revenue in Q2 FY26.

Strategic Pillars Driving Growth

Kalyan Jewellers' impressive performance is underpinned by several strategic initiatives. The company's shift towards a capital-light Franchisee Owned Company Operated (FOCO) model is central to its expansion strategy. This model allows for rapid network growth without significant capital deployment by the company, with franchisees bearing inventory and most showroom expenses. In FY26, Kalyan plans to launch 84 FOCO showrooms in India, with 40 already operational by September 2025. This approach is enhancing the company's Return on Capital Employed (ROCE), which stood at 23.4% for the last twelve months.

Another strategic focus is debt reduction and balance sheet strengthening. The company successfully reduced INR 130 crore of debt in Q2 FY26, bringing its non-Gold Metal Loan (GML) debt to INR 550 crore. Management is committed to an annual debt reduction target of INR 300 crore and aims to be debt-free in the next fiscal year. Furthermore, Kalyan is actively monetizing non-core real estate assets, expecting to release INR 200 crore worth of collateral in FY26 and an additional INR 200 crore in FY27, further bolstering its financial position.

Diversification and Operational Excellence

Kalyan Jewellers is also diversifying its offerings and enhancing operational efficiency. The company is set to launch new regional brands in Q4 FY26, which will feature exclusively localized designs. These brands aim to cater to a broader customer base, including those who prefer local/unorganized players, complementing Kalyan's existing aspirational brand positioning. A pilot project for backward integration is underway for these new regional brands, focusing on negotiating with vendors for leaner credit periods to improve gross margins.

While the e-commerce segment, Candere, reported a loss of INR 9 crore in Q2 FY26, management is optimistic about achieving PAT neutral to positive status by the end of FY26, with a revenue target of INR 500 crore. The company acknowledges the high attrition rate in its 'My Kalyan' grassroots network, attributing it to the nature of fieldwork in the industry. Despite this, the network remains a crucial component of its deep customer outreach strategy.

Outlook and Investor Confidence

Kalyan Jewellers' Q2 and H1 FY26 results demonstrate strategic clarity and disciplined execution. The management's focus on capital-light expansion, debt reduction, and market diversification positions the company for sustained growth. With strong festive demand, improving profitability, and a clear roadmap for financial strengthening, Kalyan Jewellers continues to build investor confidence and reinforce its leadership in the Indian jewellery market.