Kalyan Jewellers India Ltd Management Discussions

ECONOMIC REVIEW Global Economy

According to the April 2025 World Economic Outlook (WEO) released by the International Monetary Fund (IMF), the global economy is projected to grow by 2.8% in 2025, a moderation from the 3.2% growth recorded in both 2023 and 2024. This moderation reflects a more cautious global investment climate amid persistent geopolitical tensions and policy uncertainties. While labour markets have remained resilient and inflation continues to ease, global growth remains below its historical average of 3.8% (2000-2019).

World Economic Outlook	2023	2024	2025
Projections (GDP Growth)	3.2	3.2	2.8

In 2024, the global economy demonstrated resilience amid tight monetary conditions, elevated debt levels, and ongoing supply chain adjustments. However, disruptions from ongoing conflicts in Ukraine and the Middle East to Red Sea shipping route interruptions have contributed to periodic spikes in energy and commodity markets.

Gold has once again emerged as a key safe-haven asset, with sustained price increases reflecting heightened investor caution. However, for jewellery retailers, sharp gold price spikes present operational challenges. Discretionary gold demand—typically influenced by gifting, fashion, or investment sentiment of ten pauses in volatile pricing environments, deferring purchases to subsequent quarters. In contrast, wedding-related demand remains largely inelastic and time-bound, providing some stability.

Retailers must maintain inventory agility to serve demand across ticket sizes and carat preferences. Ensuring a strong presence of SKUs within high- traction price bands tailored to each micro-market is key to staying relevant despite gold price volatility. Flexibility in design and grammage, along with transparent pricing, is crucial for managing customer expectations during periods of price fluctuation.

Outlook

Looking ahead, global growth is expected to remain moderate at 2.8% in 2025, with advanced economies beginning to cautiously lower interest rates in the second half of the year, driven by improving inflation dynamics. However, fiscal consolidation, geopolitical risks, and divergent recovery paths across regions could limit upside momentum.

For the jewellery industry, continued global uncertainty is expected to support long-term interest in gold as a stable store of value. This reaffirms the importance of maintaining operational flexibility, strengthening brand trust, and offering designs that align with both evolving consumer preferences and macroeconomic realities.

Indian Economy

Amidst a challenging global macroeconomic environment, India remained a bright spot in FY25, maintaining its growth momentum. According to provisional estimates released by the National Statistical Office (NSO), Indias real GDP grew by 6.5% in FY25, supported by sustained government capital expenditure, resilient urban consumption, a gradual rebound in rural demand, and steady industrial activity. Notably, GDP growth in Q4 FY25 stood at 7.4%, underscoring the economys broad- based resilience.

Inflation remained largely within the Reserve Bank of Indias (RBI) tolerance band for most of the year. Headline CPI inflation averaged 5.4% in FY24 and is projected to moderate further to 4.5% in FY25, assuming a normal monsoon and continued supply- side interventions. Core inflation also trended downward, reflecting easing input costs and declining price pressures across goods and services.

Despite the encouraging macroeconomic backdrop, some challenges persist. Volatility in food prices and a relatively high services inflation remain watchpoints. Additionally, the Indian rupee depreciated modestly against the US Dollar, influenced by global risk aversion and interest rate differentials. This impacted the landed cost of imported gold, which combined with fluctuations in global gold prices contributed to higher price points for end consumers. Such inflationary pressures may temporarily affect discretionary spending patterns, particularly in price- sensitive rural segments.

Outlook

India continuesto lead among major emerging market economies in terms of growth momentum. The IMF projects India to remain one of the fastest-growing large economies, and estimates place the country on track to become the third-largest economy in the world by 2027 (at market exchange rates). Strong fundamentals ranging from favourable demographics to formalisation trends, digital infrastructure, and sustained public capex are expected to underpin medium-term growth.

The RBI has projected Indias real GDP growth for FY26 forecast at 6.5%, with growth seen as "evenly balanced," supported by strong domestic consumption, rising investment, and vibrant services activity. The ongoing focus on fiscal prudence, infrastructure investment, and ease of doing business is expected to foster a more enabling environment for consumer-led sectors like jewellery retail.

The Global Jewellery Industry Overview

The global jewellery industry continued its upward trajectory in FY25, driven by increasing disposable incomes, a growing preference for luxury goods, and the enduring appeal of gold as both adornment and investment. Jewellery is increasingly seen as a symbol of status and personal style, particularly among affluent consumers.

The demand for contemporary designs and the entry of new-age designers are expanding market reach. Additionally, higher GDP per capita in key economies, coupled with steady growth in consumer spending, is expected to sustain momentum in the global gold jewellery market over the coming years.

Market Size

The global jewellery market was valued at USD 232.94 Bn in 2024 and is projected to reach USD 242.79 Bn by 2032, reflecting a CAGR of approximately 5.1% during the forecast period. The sustained demand for gold jewellery, rising affluence, and increasing fashion- consciousness continue to support this growth.

The market continues to evolve with a shift toward branded, certified products and growing adoption of omnichannel retail models particularly in markets like India, the Middle East and North America.

THE INDIAN GOLD MARKET OVERVIEW

Overview

Indias cultural and emotional connection with gold remains deeply embedded in its social fabric, with the precious metal continuing to serve as both ornament and asset. Gold retains its multifaceted value as a store of wealth, a hedge against inflation, and as security for loans cementing its role in Indias financial and social systems. As of 2025, India remains the fifth-largest importer of gold and one of the largest gold reserve holders globally.

The market has witnessed evolving consumer preferences, with younger buyers gravitating towards lightweight, minimalist, and fusion jewellery, while traditional motifs remain popular for weddings and festivals. Celebratory occasions such as Akshaya Tritiya, Dhanteras, Durga Puja, and

Karva Chauth continue to anchor seasonal demand. Bridal jewellery remains the dominant category, accounting for nearly 50-55% of overall demand. With expanding middle-class incomes and digital discovery, Indias gold jewellery segment remains robust across both urban and rural markets.

Evolving Landscape

Indias jewellery retail landscape is undergoing a significant transformation, shaped by formalisation, rising brand awareness, and shifting consumer expectations. What was once a largely unorganised and fragmented space is now steadily segmenting into five clear formats. First are the national brands with widespread customer recall and pan-India presence, delivering standardised quality, service, and trust. Alongside these are regional brands with deep-rooted appeal in specific states or communities, catering to local tastes and traditions. A third segment includes omnichannel brands focused on lightweight, everyday, and office-wear jewellery, particularly appealing to younger, digitally native consumers. The fourth emerging format comprises premium Indian jewellery brands, offering a more elevated, design- forward shopping experience. Finally, international luxury brands have carved out a niche among affluent urban buyers drawn to global aesthetics and craftsmanship.

Our Strategic Response

In response to this evolving landscape, Kalyan Jewellers is building a future-ready, multi-brand platform to serve each of these emerging segments. Our flagship Kalyan brand anchors our national strategy, offering trust, transparency, and cultural relevance across regions — a proposition we plan to scale further in FY26. To deepen our local connect, we are preparing to launch a new regional brand in FY26, focused on affordable regional jewellery crafted to reflect local traditions. Our Candere platform continues to capture the omni-channel and youth-driven segment, with plans to expand its digital and offline footprint. Together, these initiatives position us to lead across all key customer segments in a rapidly formalising market.

Market Size

Indias jewellery market was valued at USD 89.65 Bn in 2024 and is projected to grow to USD 124.7 Bn by 2030, with a consistent CAGR of 6.3% through 2025-33. India accounts for approximately 24% of the global jewellery market, with gold jewellery contributing over 77% of this share.

While gold prices remained elevated in FY25, consumer demand showed resilience, particularly during the wedding and festive seasons. While the industry saw revenue growth in terms of value, volume growth moderated in 2025 due to price sensitivity as customers usually have a budget range for their jewellery purchase. Organised players witnessed higher growth when compared to the unorganised players as customers increasingly preferred to align with organised brands.

Gold prices in India continued their upward trend, reaching an average of Rs92,550 per 10 grams (24K) in FY25 up from Rs77,913 in 2024, Rs65,330 in 2023, and Rs52,670 in 2022. The rise was driven by global geopolitical uncertainty, tightening by major central banks, and persistent inflation across key economies.

Despite price fluctuations, festive demand remained resilient making it one of the strongest seasons in recent years. South India continues to lead in gold jewellery consumption, accounting for nearly 40% of national demand. Overall, domestic consumption is expected to remain elevated, driven by rising incomes, expanding wealth, and the enduring strength of Indias wedding economy.

India, the second-largest consumer of gold jewellery globally, continues to India, the second-largest consumer of gold jewellery globally, continues to witness structural shifts that are shaping long-term demand. Younger consumers increasingly seek brands that reflect their personality, offer a superior retail experience, and are accessible nationwide- placing greater value on service, merchandise, and ambience over just pricing. Middle-aged buyers, too, are showing a marked shift toward branded jewellery, with organised players gaining steady conversions each year.

At the same time, regulatory measures such as mandatory hallmarking and reduced import duties are narrowing the cost gap between organised and unorganised retailers. These developments— combined with rising expectations around transparency, quality, and customer experience—are accelerating the formalisation of the jewellery market and reinforcing the long-term competitiveness of organised brands like Kalyan Jewellers.

Key Growth Driver

Jewellery demand in India is highly seasonal and culturally driven, closely tied to weddings, festivals, and rural harvest cycles. These demand peaks vary regionally and are influenced by local customs, traditions, and income patterns making India a truly diverse and complex jewellery market.

The Hyperlocal Approach

Indias jewellery preferences are deeply regional, with each zone reflecting distinct design aesthetics, budget expectations, and purchase behaviours. As a result, the most effective growth strategy is a hyperlocal approach combining a strong community presence with the scale and trust of a national brand.

In the South, gold continues to dominate preferences, with the region accounting for nearly 40% of national demand. Even in studded jewellery, there is a clear inclination towards pieces with higher gold content.

The East (15%) demonstrates a broad appreciation for both gold and intricate craftsmanship. The North (20%) and West (25%) offer a balance of traditional and modern jewellery, including growing interest in diamond-studded and lightweight styles.

South Constitutes Largest Pin in the Indian Jewellery Market

This fragmentation explains why few local jewellers have successfully expanded beyond their home regions. Establishing pan-India leadership requires a nuanced mix of localised product strategies, regional marketing, grassroots outreach, and supply chain agility.

As organised players continue to adopt this model, backed by deep consumer insight and operational scale, they are well-positioned to tap into Indias vast and varied jewellery demand across urban and rural markets.

OUR RESPONSE

At Kalyan Jewellers, our hyperlocal strategy enables us to connect meaningfully with diverse customer segments across India. We run region-specific campaigns with local ambassadors, offer culturally relevant designs through 15 procurement centres, and staff showrooms with local talent. Our grassroots ‘My Kalyan network, with 1,037 stores and 3,926 personnel, strengthens outreach across urban and rural markets reinforcing our position as a trusted, community-focused jeweller.

Our robust supply chain infrastructure plays a pivotal role in enabling this hyperlocal execution at scale. With 15 procurement centres strategically located across India, we ensure agile sourcing of region-specific designs and seamless inventory flow to our showrooms. This decentralised model not only shortens lead times but also enhances responsiveness to local demand patterns allowing us to keep pace with evolving customer preferences across micro-markets.

E-commerce Transforms Jewellery Market

E-commerce is reshaping the jewellery landscape in India, expanding accessibility and redefining consumer behaviour. With the rise of digital adoption, jewellery brands are leveraging online platforms to reach newer audiences especially younger and convenience-driven buyers driving innovation and competition in the sector.

Our Response

At Kalyan Jewellers, we continue to strengthen our digital capabilities to stay ahead in the evolving retail environment. Our acquisition of Candere, a leading online jewellery brand, has played a pivotal role in building an integrated omni-channel experience. In FY25, Candere recorded revenue of Rs1,638 Mn, reinforcing its growing relevance as part of our broader strategy. It also represents one of the four distinct formats through which we aim to serve specific consumer segments with differentiated offerings.

Indias Jewellery Market Formalities

Indias jewellery industry has undergone a visible shift towards formalisation over the past decade, driven by regulatory reforms like GST, hallmarking mandates, and growing consumer preference for transparency, billing, and quality assurance. Despite this progress, the unorganised segment still accounts for a majority share, particularly in smaller cities and towns.

Our Response

As an early mover in the organised jewellery space, Kalyan Jewellers has built its business around trust, transparency, and compliance. From billing and certification to showroom design and staff training, our processes reflect a structured, customer-centric approach. We continue to lead the transition towards formalisation by offering a consistent, high-quality experience across our expanding showroom network.

Focus on Rural/Semi-Urban Markets

Rural and semi-urban India account for over 60% of the countrys gold jewellery demand, driven by deep- rooted cultural traditions and rising incomes. However, organised retail penetration in these markets remains limited due to infrastructure and cost challenges, leaving significant headroom for growth.

Gold Jewellery Demand and Ownership is Higher in Rural India and Rises with Income Levels

Our Response

Kalyan Jewellers continues to deepen its presence in Tier 2 and Tier 3 cities, supported by a localised approach and our My Kalyan network, which enables efficient outreach and cost optimisation. By tailoring offerings to regional preferences and building trust at the grassroots level, we are steadily unlocking the long-term potential of these high-growth markets. To deepen our connect, we are also working on launching a new regionalised jewellery brand that caters to staple, community-specific designs mirroring successful formats seen in regional leaders like PNG, Senco, and Thangamayil.

Performance in FY25

FY25 was a strong year for Indias organised jewellery retail industry, despite external challenges such as fluctuating gold prices and global macroeconomic uncertainties. The sector benefitted from rising disposable incomes, a resilient festive and wedding season, and increased traction in Tier 2 and Tier 3 cities.

Organised players capitalised on brand equity, digital engagement, and consumer trust to drive double-digit growth. Kalyan Jewellers, in particular, witnessed record footfalls during key demand periods such as Akshaya Tritiya and the festive season. Marketing campaigns with strong regional connect and increased store-level activation helped improve showroom walk-ins.

A notable trend was the continued shift especially among younger consumers moving towards certified jewellery, transparent pricing, and reliable aftersales service.

Our Response

At Kalyan Jewellers, FY25markedayearofaccelerated expansion and operational strength. We launched 76 Kalyan showrooms and 60 Candere outlets in India, along with our first store in the United States, taking our global showroom count to 388. Our consistent focus on capital-efficient growth, localisation, and customer-centric service helped us surpass Rs2,50,000 million in consolidated revenue and achieve a PAT of Rs7,142 million. With strong fundamentals and a clear strategic direction, we are well-positioned towards becoming a multi-brand platform.

COMPANY OVERVIEW

Founded in 1993 by Mr. T.S. Kalyanaraman, Kalyan Jewellers has grown into one of Indias most trusted and admired jewellery brands. Built on a foundation of integrity, family legacy, and decades of industry expertise, Kalyan is known for pioneering consumer- first practices and transparency in jewellery retail.

With a 7+% share of Indias organised jewellery market, we offer a comprehensive portfolio that includes gold, diamond-studded, and other jewellery products designed to suit diverse occasions, styles, and budgets. Our presence spans India, the Middle East, and the United States, reflecting a growing global footprint backed by deep local insight.

Share of Organised Jewellery Market

At the heart of our strategy is a hyperlocal business model. Every aspect of our operations product design, marketing communication, showroom staffing, and customer engagement is tailored to reflect local tastes and cultural preferences. From language to craftsmanship, our showrooms are built to feel familiar and welcoming to the communities they serve.

Through this blend of scale and localisation, Kalyan Jewellers continues to deliver excellence in quality, service, and design reinforcing our position as Indias trusted jeweller, committed to creating long-term value for customers across generations.

SWOT ANALYSIS

Strengths

1. Strong Brand Recognition

Kalyan Jewellers is a trusted and established name with a legacy of transparency and quality, earning deep consumer loyalty across India.

2. Diverse Product Portfolio

From traditional bridal collections to contemporary and lightweight designs, our offerings cater to a wide range of customer preferences and price points.

3. Extensive Retail Network

With a presence across metros, Tier 2/3 cities, and rural markets, our robust showroom footprint ensures reach and accessibility.

4. Hyperlocal Marketing Strategy

State and city-level campaigns featuring national and regional ambassadors strengthen our connect with local audiences.

5. Integrated Digital Ecosystem

Our omni-channel platform, enhanced by Candere, allows customers to engage with the brand both online and offline, ensuring convenience and continuity.

6. Pan-India Leadership

Among Indias largest organised jewellery players, Kalyan continues to expand its reach across regions with consistency in quality and service.

7. Strong Governance

A well-diversified and experienced Board, led by an Independent Chairman, ensures sound governance, strategic oversight, and long-term value creation.

Weaknesses

1. High Dependence on the Indian Market

A significant share of Kalyan Jewellers revenue is generated from India, making the business susceptible to domestic economic cycles, regulatory changes, and gold price volatility.

2. Limited Penetration in Rural Areas

Despite efforts through the My Kalyan network, the cost and complexity of scaling physical showrooms in rural regions remain a constraint to deeper market penetration.

3. Inventory-Intensive Business Model

While the FOCO model helps reduce the capital burden on Kalyan Jewellers, the inherent nature of jewellery retail still demands high working capital and inventory investment, which can impact agility and operational efficiency.

4. E-commerce Still Scaling

While Candere has strengthened the brands digital presence, the online channel is still in the growth phase and contributes a smaller share of total revenue compared to physical retail.

Opportunities

1. Expansion in Rural and Semi-Urban Markets

Rising incomes and aspirations in Tier 2, Tier 3, and rural India present significant growth potential through deeper penetration and customised offerings.

2. Growth in Online and Omni-Channel Sales

The shift toward digital shopping enables us to enhance our omni-channel model, combining the trust of physical showrooms with the convenience of e-commerce via platforms like Candere.

3. Category Diversification

Expanding into high-potential segments such as lightweight, everyday wear, and personalised jewellery can attract new customer segments and drive repeat purchases.

4. Rising Shift to Organised Retail

Consumer preference is steadily shifting toward organised players, driven by demand for certified products, transparent pricing, and consistent retail experiences—creating strong growth tailwinds for trusted jewellery brands.

5. International Market Expansion

Entering new geographies particularly those with a strong Indian diaspora offers an opportunity to diversify revenue and reduce overdependence on the Indian market.

Threats

1. Economic Downturns

Gold exchange, which contributes nearly a third of industry revenue, offers customers an affordable upgrade path without significant new outlay. This cushions the impact of economic slowdowns, which can otherwise dampen discretionary jewellery purchases.

2. Intense Industry Competition

The Indian jewellery market remains highly fragmented, with both national chains and regional players competing on price, design, and customer experience—posing a constant challenge to market share.

3. Gold Price Volatility

Frequent fluctuations in global gold prices can influence consumer purchase timing, affect inventory valuation, and impact margins.

4. Regulatory Changes

Changes in government policies around gold imports, taxation, hallmarking, or KYC norms could affect operational costs and compliance requirements.

Operational Performance

Kalyan Jewellers delivered a strong operational performance in FY25, driven by sustained growth in footfalls, showroom expansion, and enhanced profitability across geographies. The Company continued to execute on its strategy of expanding its physical footprint, deepening its digital presence, and improving capital efficiency leading to higher return ratios and market share gains.

In India, standalone revenue grew from Rs1,57,582 Mn in FY24 to Rs2,16,386 Mn in FY25, reflecting robust consumer demand across both metro and non-metro markets. This growth was supported by a continued focus on localised offerings and strategic marketing during key demand occasions such as weddings and festivals.

Consolidated EBITDA increased to Rs15,172 Mn in FY25, compared to Rs12,799 Mn in FY24, supported by scale efficiencies and improved margins. Profit after tax (PAT) stood at Rs7,142 Mn, as compared to Rs5,963 Mn in the previous year.

The Company also continued its strong momentum in physical expansion. As of March 31, 2025, Kalyan Jewellers operated:

• 278 Kalyan showrooms in India

• 36 showrooms in the Middle East

• 1 showroom in the United States

In addition, the Candere brand continued to scale its omni-channel presence. As of FY25-end, Candere had 73 showrooms (up from 13 in FY24), comprising a mix of FOCO and COCO models. This rapid expansion was supported by a sharpened merchandising strategy and ongoing investments in brand building. Candere recorded 1,638 Mn in revenue for FY25 and is on track to achieve PAT-level profitability in FY26.

This expansion strategy both in physical stores and digital integration has strengthened Kalyans operational agility and widened its customer base, positioning the brand for continued growth across all markets.

FINANCIAL PERFORMANCE Summary of Consolidated Profit and Loss

Particulars	FY25	FY24	Change (Rs Mn)	Change (%)
Revenue	250,451	185,156	65,295	35.3%
Gross Profit	32,843	26,810	6,033	22.5%
Gross Profit Margin (%)	13.1%	14.5%	(1.4%)
Total Operational Expenses	17,671	14,010	3,660	26.1%
Advertisement and Promotion Expenses	4,734	3,553	1,181	33.2%
Other Operational Expenses	12,937	10,458	2,480	23.7%
EBITDA	15,172	12,799	2,373	18.5%
EBITDA Margin (%)	6.1%	6.9%	(0.9%)
Depreciation	3,427	2,743	684	24.9%
EBIT	11,745	10,056	1,688	16.8%
EBIT Margin (%)	4.7%	5.4%	(0.7%)
Finance Costs	3,595	3,232	362	11.2%
Other Income	1,446	1,064	382	35.8%
PBT	9,596	7,888	1,708	21.6%
PBT Margin (%)	3.8%	4.3%	(0.4%)
Profit After Tax (PAT)	7,142	5,963	1,179	19.8%
PAT Margin (%)	2.9%	3.2%	(0.4%)

Liabilities

Particulars	FY25	FY24
Equity Share Capital	10,314	10,301
Other Equity	37,721	31,590
Non-controlling Interests	-	(13)
Non-current Liabilities	15,117	10,689
Current Liabilities	88,107	75,610
Total	1,51,259	128,177

Assets

Particulars	FY25	FY24
Non-current assets	37,266	28,687
Current Assets	1,13,993	98,151
Assets held-for-sale	-	1,339
Total	1,51,259	1,28,177

Key Ratios

Particulars	FY25	FY24
Inventory Turnover (Times)	2.42	2.07
Interest Coverage Ratio (Times)	4.22	3.96
Current Ratio (Times)	1.29	1.30
Net Debt to Equity Ratio (Times)	0.47	0.56
ROE (%)	15.9	15.2
ROCE (%)	19.8	19.1

Gross profit margin = Gross profit/Revenue from operations

EBITDA Margin = Earnings before interest, tax, depreciation and amortisation (EBITDA)/Revenue from operations EBIT Margin = Earnings before interest and tax (EBIT)/Revenue from operations Profit before tax margin = Profit before tax (PBT)/Revenue from operations Profit after tax margin = Profit after tax (PAT)/Revenue from operations

Inventory turnover = (Cost of materials consumed + Changes in inventories of finished goods and work-in progress)/Average Inventory

Interest coverage ratio = Earnings before interest, tax, depreciation and amortisation (EBITDA)/Finance cost

Current ratio = Current Assets/Current Liabilities

Net debt to equity ratio = Net Debt (including GML)/Total Equity

Return on equity = Net Profit after tax/Average Total Equity

Return on capital employed = Earnings before Interest and tax (EBIT) / (Total Equity + Non-current liabilities).