Global brokerage HSBC said Kalyan Jewellers India Ltd.’s stock has risen 8x in the past two years and it is still midway into its value creation journey.

The brokerage retained its Buy call on the jewelry retailer and raised the stock target price to 810 rupees from 600 rupees per share. Kalyan ended at 656.80 rupees on the National Stock Exchange in Mumbai trading yesterday.

HSBC said the Thrissur, Kerala-based Kalyan’s stock price has risen 8x in the past two years as the business model successfully transformed through the capital light franchise model, leading to three-year revenue CAGR of 30% and net profit CAGR of 58%, unlocking the structural high growth.

It added that now Kalyan trades at an FY26E PE of around 56x, a 10% discount to market leader Titan Company Ltd., the question for many is: can Kalyan still rise?

“We think Kalyan is still in the midway of its value creation journey,” HSBC’s India Equity Strategist, Consumer & Retail Analyst Amit Sachdeva said in an investor note.

The brokerage is upbeat on Kalyan due to the following factors:

Exponential Growth Continues

Kalyan has 217 stores (less than half of Titan’s) and there is clear potential to quadruple this count in this decade. Therefore, HSBC sees industry leading revenue growth continuing making Kalyan an appealing compounding opportunity.

Entrenched National Brand

Kalyan emerged as an entrenched national brand (like Titan), differentiating the company from other regional rivals and gives it a natural right for the pan-India capital light expansion.

Aspirational Yet Value Positioning

The “aspirational yet value” positioning makes the company less prone to disruptive competition and to an extent, Kalyan is somewhat of a disruptor itself that is reshaping value proposition in the organized jewelry segment.

Candere Format (Studded Oriented Jewelry)

Having scaled up the Kalyan format through the franchise route, HSBC sees opportunity to scale up Candere (studded jewelry) emulating Caratlane of Titan. The brokerage thinks a successful scale up would act as a catalyst for the stock performance.

Long-Range Margin Tailwinds

Having achieved large scale, there is clear incentive for Kalyan to capture larger value by opening owned stores (instead of allocating to franchise partners) in lucrative micro markets. This would trigger the cycle of gradual long-range margin expansion, which should be a very sensitive lever for value creation

With a successful track-record, the terms of trade such as gold loan interest may start to come down as well.

Valuation Looks Appealing

The valuation looks appealing if pitted against the high growth of other consumer opportunities. At FY26 PE of 56x, Kalyan still looks attractively valued, relative to other structural high growth companies of equivalent economics such as Avenue Supermarts Ltd. (DMart) and Titan.

Growing Investor Base

A growing investor base has led to a fall in the hurdle rate for Kalyan as return on equity has risen consistently and growth appears structural.

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India Watch List For Thursday - March 30