Hi. Thank you.

Good evening, everyone, and thank you for joining us on Kalyan Jewellers India Limited Q3 and 9M FY '26 earnings conference call. We have with us Mr.

Ramesh Kalyanaraman, Executive Director; Mr. Sanjay Raghuraman, CEO; Mr.

V. Swaminathan, CFO; Mr.

Sanjay Mehrotra, Head of Strategy and Corporate Affairs; and Mr. Abraham George, Head of Investor Relations and Treasury.

I hope everyone had a chance to view our financial results and investor presentation, which were recently posted on the company's website and stock exchanges. We will begin the call with opening remarks from management, followed by an open forum for question and answers.

Before we begin, I'd like to point out that some of the statements made during today's call may be forward-looking. A disclaimer to that effect was included in the earnings presentation.

I would now like to invite Mr. Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers India Limited, to give his opening remarks.

Thank you, and over to you, sir.

Good evening. We had an excellent all-round performance during the recently concluded quarter.

Momentum on the ground remained robust for most part of the quarter, with the festive period growth meaningfully higher than the rest of the quarter. As previously communicated, same-store sales growth for the 30-day period ending Diwali was in excess of 30% on a like-for-like basis.

Over the last couple of years, we have been focused on transforming Candere into an omnichannel platform, and as you are aware, we have 110 Candere stores now. Candere recorded revenue growth of 117% for the nine months ended 31st December, and more importantly, Candere has turned PAT positive during the recently concluded quarter with revenue growth of 144 percentage.

Going forward, in addition to new showroom launches, our efforts in Candere would also be on adding more inventory in the already launched showrooms and drive higher same-store sales growth. Talking about the ongoing quarter, we have started off well despite continuing volatility in gold prices.

We are upbeat about the ongoing wedding season across the country and expect to end the financial year on a very strong note. I'll now hand over to Sanjay.

He will take you through the numbers in detail. Thank you.

Thank you, Ramesh, and good afternoon, everybody. I am really happy to be talking to you all again.

In the just concluded quarter, we reported consolidated revenue of ₹10,343 crores, a growth of 42% over the corresponding quarter of the previous year. Consolidated profit before tax was ₹560 crores versus ₹294 crores in the corresponding quarter of the previous year.

This is after the impact of changes in the labor code, an amount of ₹41.5 crores has been provided under exceptional items for the quarter. Consolidated profit after tax was ₹416 crores versus ₹219 crores in the corresponding quarter of the previous year, a growth of 90% over the corresponding quarter of the previous year.

Talking now about the numbers for the nine months ending December 2025, we recorded a revenue of ₹25,468 crores on a consolidated basis versus ₹18,860 crores in the same period of the previous year, a 35% growth. Consolidated profit before tax for the nine-month period stood at ₹1,263 crores versus ₹709 crores in the same period of the previous year, a 78% growth.

Consolidated profit after tax for the nine months was ₹941 crores versus ₹527 crores in the corresponding nine months of the previous year, a 79% growth. Out of the free cash generated from operations, nearly ₹300 crores was used for our Candere expansion and pilot showrooms in the US and the UK.

Another ₹300 crores was used for debt reduction and dividend payments. Now, I shall give you the breakup between the quarterly performance between India, the Middle East, and Candere, starting with the India numbers.

India revenue was ₹9,048 crores versus ₹6,386 crores in the corresponding quarter of the previous year. India profit before tax was ₹541 crores versus ₹292 crores in Q3 of the previous year.

India PAT was ₹401 crores compared to ₹218 crores in Q3 of the previous year, an 84% growth. Moving now to the Middle East business, revenues in the Middle East came in at ₹1,073 crores versus ₹838 crores.

Profit before tax in the Middle East was ₹26 crores versus ₹18 crores in the same period. The Middle East business posted a profit of ₹24 crores for the quarter compared to a profit of ₹15 crores for the corresponding period in the previous year.

Lastly, our e-commerce business, Candere, posted revenues of ₹135 crores versus ₹55 crores in the corresponding period of the previous year. The quarter recorded a profit of ₹3 crores versus a small loss of ₹7 crores in the corresponding previous year period.

We are now done with the summary of the financials and would like to open the floor for questions. Thank you.

Hello. Sir, am I audible?

Yeah.

Hello? Yeah.

Yeah. Sir, my first question is with regards to the volatility in the gold prices because the gold prices is almost risen by, I would say, almost near 100%.

In this context, how is this impacting the new franchisee edition for you, given that the newer guys would now almost require 80% or 90% higher amount to put up the same kind of tonnage? How are you navigating this?

Are you seeing any changes in your franchisee store edition plans because of this?

No, the franchisee sign-ups, it has been very strong. Again, the 80%-90% is one-year difference which you are talking about.

We don't sign up franchisee one year before with all the amounts finalized. We always say that the volume at the store should be in this range, and you will have to be prepared for XYZ amount.

We don't see anything majorly changing for them because everyone knows about how a jewelry store investment comes in. Next year's also everything is finalized, franchisee.

Sure. Ramesh, what I meant was that, because initially when they would have signed the agreements, last year maybe, the prices would have been lower to that extent.

Then would there be a recalibration in that tonnage that would probably be kept in the store while the value could remain the same? What are the changes that you would need to make because of this sharp rise in gold prices?

Two things here. One is that our franchisee have the financial ability to take multiple showrooms, and we give them only one store and ask them to start the journey with Kalyan, and then later we might give them a couple of stores more.

I have told you earlier that our objective is to create a good base of franchisee partners rather than only opening stores. That is point number one.

Point number two is, yes, every market has a size. If that market size is maybe ₹60 crore, ₹70 crore, with a stock turn of around two, two and a half in the first three years, the inventory amount will not change too much because then that market cannot absorb that kind of revenue.

It is a mix wherein our inventory levels 18 karat percentage we will increase a bit so that the volume does not get hurt too much. We also keep a buffer of some inventory.

When we tell the franchisee itself, we would have told them at least to keep 30% more than what is required. It is a mix of things wherein we also know that these kind of situations can surely come, no?

Sure, sure. In one more thing, you also keep a certain inventory at your end for your existing COCO stores, as well as some backup inventory that you need to keep for the upcoming franchisees as well.

Given the prices have increased, would that mean that any changes rather because of this in your debt reduction plan that you might have because of this volatility in gold price?

No, in our own showroom also, we cannot keep the same volume of jewelry when the price is going up. We will have to trim the volume, not directly to the percentage of the price increase, but to some extent to manage our inventory because our turns will also go bad otherwise.

There is no major change in our cash flow planning for the year. Those showroom do not need the level of inventory at such rates.

That is how we plan our cash flow.

Okay. Sure.

Just lastly, on the initiative that you were supposed to launch in Q4, the third brand, that is. Where are we on that?

Is it launched? If not, the planning stage is etcetera.

Some color you can give on that front?

It is yet to launch, but the region brand will be launched in the running quarter. As I had mentioned previously, it is in one state in India at a go wherein the region brand will come only in one state.

Sure. Thanks, Ramesh.

That's all from me.

Yeah.

Hi, team. Thank you for taking my question.

I hope I'm audible.

Loud and clear.

Yeah. My first question is on GML.

With all the stress going on global economy or politics and the current rally in the gold prices, are we seeing any headwind or any risk of this GML going out of books for us, or maybe the interest cost on this increasing going ahead?

No, nothing. It remains very consistent as we speak.

Got it. Got it.

Also needed one clarity for Candere, we were growing through FOCO model, right? Where we used ₹300 crores for the expansion of Candere?

Could you repeat the question again?

My understanding was for Candere we were broadly growing through FOCO model. I wanted to understand where we spent ₹300 crores on the same brand, like it was more on advertisement or COCO stores or something else?

No, no, no. Candere, it's a mix of FOCO and COCO.

It is not only FOCO. That is where this ₹300 crore investment is required.

It's not only for Candere again. If you are asking about the ₹300 crore which Sanjay was mentioning in his speech, it is including the pilot stores which we opened in UK and US.

Oh, makes sense. Makes sense.

One last clarity. With this gold price going up, our studded mix has increased.

Ideally, what our understanding was with increasing prices, there will be some headwinds on the studded mix. Are we seeing the same in the upcoming quarters or the months?

No, studded has an organic growth also these days because because of the social media and because of the campaigns which we do, because of the youngsters who do a lot of research before buying jewelry, there is an organic growth for studded jewelry. It becomes actually relatively easier for us to upsell also during high gold prices because the product looks bigger than the plain gold jewelry, and it's also comes in 18 karat.

Got it. Thank you.

That's all from my side.

Hello, sir. Good evening.

Good evening.

Yeah. My question is from last Q1, Q2, and Q3, I'm continuously following the share.

Even though it has extremely good results, then why it's still underperforming, sir?

Underperforming in the sense?

Means, actually, it's undervalue. Means the results were good and everything is good.

Even the stock was continuously downfall for past months.

Our job is to keep focused on execution and delivering numbers on the ground. Rest will not be our criteria to comment on.

Yes, yes. I understood.

It's not under our control also.

Okay. Somewhere I feel there is no proper update from management side.

That's what the investors are just panicked.

No. If there is anything relating to the company, then we give constant updates for everything, no?

Yes, sir. Yes, sir.

One more thing is if the gold prices are still more up, is there anything in buying prices or anything will be compared to a competitor? There will be anything added for the persons like employees or anyone who in the marriage season, they have a lot of plans to buy the gold for marriage seasons.

Due to the higher prices, is there any Kalyani can do anything for them? It's

a very retail question wherein we have constant promotions at the store level, which will happen dull season, off-season drivers, exchange offers, etc., which is a constant driver for revenue at stores.

Okay.

Hi, sir. Good evening.

Thanks for taking my question. Sir, a bit on a conceptual line.

In a high gold price environment, we are noticing that players are pushing on installment schemes, as well as gold exchange programs, right? I just wanted to check how are we placed there in terms of mix.

If you can share some data around the revenue from installment schemes or through gold exchange programs, what is it trending currently and how was it a year before?

Our gold savings schemes are very active over the last many years, and we still continue to see traction on gold savings scheme at the store level. It gives a customer an opportunity to fix the price on a monthly basis.

Again, it will be easier for them to purchase jewelry also because they don't feel the pinch of spending money at a go. Regarding the exchange of jewelry, old gold exchange, we have seen a bit more traction in Q3 when compared to last Q3.

That's also a constant driver for revenue. We have not done any specific activations around exchange because SSGs were strong.

We might do it in the future, but as we speak, for the full financial year for the nine months, we have not done something very specific around exchange.

That was what I was intending because we had seen players sort of marketing both these things very aggressively. Our performance has no doubt been very strong, but maybe if you could just comment our sales from these two mixed perspective, what is it trending as of now and what was it like a year before would be helpful.

Old savings with exchange gold usually is in the range of 30% plus, and it has been in that range. It has been 1% or 2% more in Q3 when compared to last year.

Again, gold savings scheme usually is in the range of 18% to 20%, which remains the same.

Understood. Understood.

Sir, secondly, I wanted to check because of this gold price increase, there is high adoption of 18 karat, 14 karat, and even 9 karat now. Wanted to check from our inventory perspective, are we at a level which rightly represent the consumer preference as of now, or we need to do some more work to sort of introduce more these lower-caratage inventories in line with the consumer preference as of now?

Some states have already accepted 18 karat, and in most of the other markets, we are gradually increasing the share of 18-karat products. Customers are accepting 18-karat jewelry as it enables them more choice within their budget.

Two, three states, which are predominantly 18-karat markets, still continue to be strong.

By when can we sort of expect that all the stores will be at this optimum level of reduced-caratage inventory?

Again, it's a process. I told you two, three states are very 18-karat friendly where we have increased our inventory for 18 karat more than last year.

There are certain states, especially South India, where 18-karat acceptance will be much slower than outside South markets where we have launched many collections in 18 karat, which is attractive so that people start trying out 18 karat. It's a process, and it cannot be done overnight.

We are doing this because customers will also be happier for 18 karat because the products can be bigger than a 22 karat. It'll be customer-friendly.

We are in that journey.

I understand that, sir, but there is some religious perspective as well, right? Are we seeing a change in consumer behavior towards more acceptability for these lower caratages or maybe if you could share some regional growth perspectives here?

Since South is more 22 karat, is it seeing relatively slower growth, maybe the other regions are performing better? If you could just share some perspective here?

No, growth numbers will be very high because the base is very low, right, 18 karat. The growth rate will be higher in 18 karat than in 22 karat.

That is because the base is very low. It will take you in a wrong direction, which is not the right way to do it.

Acceptance is slower in South. North markets, acceptance is much faster.

Studded jewelry 18-karat acceptance is much higher than plain gold jewelry. Within studded, we are now focusing on launching 14 karat as well and 9 karat.

Got it. Got it.

Lastly, sir, LGD space is seeing a lot of investments. Even some of the leading players have already announced plans and opened stores.

What is your view from investing into that space? No,

we continue to watch the space very closely, but as of now, we don't have any immediate plans for a lab-grown brand. It will not be appropriate for me to comment on what the competition which you mentioned is doing, but as of now, we don't have any immediate plans.

Fair enough. Sir, just last one.

You can avoid answering if you have already answered. I joined the call late.

Any color on how the trends have been so far in January? Have they improved or maybe because Q3 saw a very strong pick-up towards festive in October.

Has that sort of trend sustained in Q4 as well?

Q4 so far has been good. Customer traction has been strong.

Even with this volatile gold prices, the customer walk-ins, footfalls, the momentum at the store is running strong.

Hi, team. Am I audible?

Loud.

Sir, a couple of questions from my side. Firstly, just wanted some help with your current store structure.

Are we also seeing say franchisee expansion in the South market? If that is the case, then what would be the count of franchisees currently operating in the Southern market?

Southern markets the franchisee number of stores or the demand for South market franchisees when you compare to non-South, is not as big as the non-South markets. The number of South franchisees will be what, minimal when compared to the non-South markets.

Right. Why I ask this question is, if I see your YoY growth specifically on the South revenue side, specifically on this quarter, it has grown by around 34%.

However, if I see your own store growth, on a revenue side, that's only grown by 16%. That's where I was trying to understand that possibly there are some franchisees which are also in the Southern market, which is why that discrepancy in the number.

For that case, there will be 30-plus showrooms in South. I am only telling you that you cannot compare the non-South number of FOCO showrooms are much, much higher.

That's what I am trying to say.

That's right.

That's right. That's right.

Sure. South also the per-store revenue is higher than the non-South.

That's also there.

Sure, sir.

Overall, we have 200-plus franchisee showrooms. Okay?

Out of which, maybe 195, 200, out of which what 30-plus will be around 30 will be South.

Understood, sir. That's very helpful.

Secondly, sir, in terms of our gross margin construct, given the policy of hedging we operate with and also the shift mix towards your franchisee stores, what drove this gross margin expansion? Second part to this question, if you could help me understand the gross margin which accrues to Kalyan from a franchisee versus an own store?

Margins have improved. Multiple factors have contributed.

First being the encouraging improvement in our studded share across most of our markets, including South markets, during the last quarter. Then as I mentioned in my previous call, the margin improvement because of the procurement changes that we had made also have sees continuing to be benefiting on our side.

Also, you would have noticed the share of franchisee revenue. It has been improving.

More importantly, the share of revenue from the new set of FOCO showrooms have increased, which is also a contributor, and it will keep growing. Again, with this strong SSGs, maybe the operating leverage across COCO and FOCO is there.

Understood, sir. Just pressing here a bit, apologies, but you mentioned that incremental new franchisees contribution to the revenue, are they coming on a different term structure, sir?

Or they act it on the older structure?

No, it's not immediate meaning we we had changed our franchisee the the the what do you call, the the franchisee sharing the margin sharing quite different, no, a year before, if you remember.

Right. Right.

We had changed the terms on CapEx, expense sharing, etc., and the margin for Kalyan will be better in the range of 0.25 to 0.5 maybe a year before we had changed. That revenues also started coming now.

Understood. Sir, from the procurement changes part, that would be a sizable chunk in our overall procurement process now?

Or it is yet to materialize?

Procurement, meaning the pilot phase which we started, we continue. We are not adding anything, but that's also a good contributor for the gross margin growth.

The hedging policy continues to remain like it was in the past quarters?

Yeah. Gold we don't take any margin benefit.

Right, sir. Right.

We are fully protected. Yes, one more area where the margin driver, of course not significant, is some margin benefit due to the surge in silver and platinum prices in the last quarter when compared to Q3 of last year.

Okay. Not significant.

Understood. There's one last question on the cost structures.

Nine-month basis YoY, while absolute growth is more or less similar, our cost structures have become more efficient. I'm talking specifically on the A&P and the employee cost as a percentage of sales.

Sir, how should one think about as we go ahead in the upcoming quarters? How will those trend?

Exactly. The leverage on advertisement and employee and other operating expenses are really helping, and I think it should continue.

Except for the silver and platinum, which is not in our hand, otherwise all the margin growth should continue, ideally.

Hi, team. Good evening.

I had my first question on the land parcel that we were discussing that how are we progressing on the sale of that, that have we managed to liquidate some of it as we were mentioning about?

We have appointed mediators for finding out interested buyers for the real estate which we are planning to sell. Hopefully, it should happen by H1 of the next financial year.

Got it. The second question was that you mentioned that despite the increase in gold prices, you try looking at moderating the absolute inventory.

Do we still target the asset turns of 2.5x, and if that is the case, then how do we optimize the quantity of gold? Do we end up letting go say slow-moving inventory in that phase when the prices of gold has increased in the store?

No, it cannot happen overnight. The optimization happens over a period of time and not immediately.

That's why I told you when the inventory price goes up by say x%, we cannot bring down the inventory by the same x%. It'll be what, 30%-40% of that x is where we reduce immediately so that our cash flow is taken care.

It cannot happen overnight. We will keep on monitoring, and again, 18 karat is also helping us to maintain the volume of jewelry there.

These kind of things we constantly do.

Got it. Just one final question was that on the store additions, you've obviously given a target of around 84 stores for FY '26.

For FY '27, are we looking at a similar number of store ads or just what's the sense there?

Yes, the store count for the next couple of years will be in this range of 80 to 90 KJ India.

Got that. Sure.

Thank you so much.

Hi. Good evening, everyone.

Sir, my first question is for our FOCO stores. Are we still seeing the standard mix expanding for our FOCO stores?

Any sense on the gross margin side, are we still seeing gross margin expansion for our FOCO stores also, given that the standard mix is expanding in our favor? Yeah.

The studded ratio has been growing across our markets when you compare to Q3 last year, and margin has also improved in our own stores, South and non-South.

Okay. Typically to look at the franchisee stores, what are the studded mix in the franchisee store side?

What are the

What is the studded mix for franchisee stores?

It should be in the range of what, 30% in the non-South markets, as they are mostly in our own store also. There is no difference between own and franchisee, which you know.

Sure, sir. Sure.

My second question is on our Middle East business. This quarter, revenue growth is close to 28% while we added close to two stores.

How should we look at the demand side there and how should we look at the near-term trend in the Middle East side?

Middle East is also strong. If you look at our revenue growth has been strong, really strong quarter, and still continues.

Sure, sure. Sir, any plans for the store expansion for another 6 months, 12 months time frame?

That franchisee ecosystem in Middle East has not turned up the way like what we did in India. That is why we maintain overseas expansions in the range of what, six to seven showrooms a year.

That should be the target for the next couple of years. If there is anything drastically which is going to change because of franchisee demand, we will get back to you.

As

of now,

yeah, the only changes that we are in active discussions with a few Arab investors for franchise, and the interest level from Arab investors for a Kalyan franchise has now developed when compared to the recent past. If that materializes, then the growth can be much higher, but better we only target for six to seven showrooms in overseas.

Sure, sir. Sure.

That's all from my side. Thank you so much.

Yeah. Thank you, sir.

Just on the FOCO stores in South, did I heard you correctly that there are 30 30 FOCO stores of Kalyan Jewellers in South because I think till last quarter, this number was around eight, nine stores?

It is 30. We have converted a few stores in the last two, three quarters.

Got it. Then when I look at the net store addition in Q3 also, it says 18 net while the gross was 21.

What led to this three store closure in India?

It is not a closure, maybe wherein, for example, there has been stores where like Jaipur or South X where we have shifted from our old premise to a new premise in a hybrid franchisee model. That is where you see the net and gross number different.

One conversion of Kalyan to Candere also.

Got it, Ramesh. In terms of debt repayment, what was the total debt repayment in third quarter, and what is the debt balance as of December end?

There is no major change from Q2 to Q3 because usually we don't repay debt in Q1 and Q3. Predominantly, we do it in Q2 and Q4 only, it is in the same level.

Got it. Just last question is on the pledging.

If you can highlight what was the total borrowing which was taken for the purpose of pledge and in terms of the total outstanding balance?

Yeah. The pledge was done only for buyback of Kalyan shares.

Again, this might not be the right platform to discuss this, but since you asked, we have reduced our loans meaningfully over the last six months to enable us to manage situations effectively. We have also drawn up plans to reduce the pledges over the next six months.

Sure, Ramesh. Thank you.

Thank you for taking my questions again. Just on the CapEx bit, if you can highlight the CapEx bit for India for this year and the next year, and also for the Candere and the international market?

Can you repeat the question once more?

The CapEx plans, the amount of CapEx that would be spent in India as well as outside India, including the new venture also that you are planning to do.

You are talking about this year, right?

Yeah, '26 and '27 both, sir, if you can highlight.

Right. This year should be in the range of what, ₹175 crore for maintenance CapEx India.

The regional five showrooms might not come this year. It can come in the next financial year maybe, partly this year.

Candere around what, 30, 40 showrooms with around ₹2 crore, ₹2.5 crore of CapEx. That should be the ballpark number.

Sir,

Ramesh, for the regional five showrooms, how much CapEx would be required for next year?

Regional we will open only five showrooms for next 12 months, okay? CapEx should be in the range of what, ₹4 crore to ₹5 crore per store.

Sure. Thank you.

Can you hear me?

Yeah. Thank you, everyone.

Before I end the call, I just wanted to mention that this quarter has been started off very well, and we look for ending up this year on a very strong note. Thank you, everyone.