Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Kalyan Jewellers India Ltd (BOM:543278, Financial) reported a consolidated revenue growth of 37% for Q2, with a 39% growth in India.
- The company successfully launched 49 Kalyan showrooms and 34 K showrooms in India, with plans to open 80 Kalyan and 50 K showrooms by the end of the financial year.
- Debt reduction is on track, with a significant reduction in non-GML working capital loans by approximately 143 crores.
- The company has witnessed strong demand during the wedding season, with a robust revenue growth of over 20% in the value minus 30 days period.
- International expansion plans are progressing, with a focus on entering the US and UK markets, leveraging the brand's recognition among the Indian diaspora.
Negative Points
- There has been a delay in the launch of the first showroom in the US, now expected to open by the end of the current quarter.
- The company faced a one-time write-off of around 70 crores due to customs duty, impacting margins.
- Franchise revenue share is lower than expected, contributing only about 32-33% instead of the anticipated 50%.
- The company is experiencing challenges in expanding in the Middle East and South India due to lower margins compared to non-South markets.
- There is no significant demand for lab-grown diamonds at the store level, which could limit growth in certain segments.
Q & A Highlights
Q: Can you explain the difference in demand for studded jewelry between Kalyan Jewellers and Titan, given Titan's reported decline?
A: (Executive Director) Our strong performance in studded jewelry is due to our focus on markets where diamonds are not just seen as investments but as wearable pieces. This approach has kept us unaffected by the pressures Titan faces, as our high-carat solitaire sales are low, and we cater to customers who use jewelry rather than store it.
Q: With the recent correction in gold prices, have you noticed any changes in consumer demand?
A: (Executive Director) Even before the gold price correction, our revenue growth was robust. The recent drop in gold prices has encouraged some customers who were waiting for lower prices to make purchases, but demand was already strong.
Q: How is the demand for lab-grown diamonds (LGD) in your stores, especially with competitors entering this market?
A: (Executive Director) We currently see no demand for lab-grown diamonds at our stores. The prices for LGDs are not stable, and major brands are not promoting them. We will consider offering LGDs if demand arises, but for now, they are treated as fashion accessories by some players.
Q: What are the plans for expanding the Candere brand, and how is it performing?
A: (Executive Director) We are focusing on expanding Candere's footprint and plan to start campaigns before the end of the financial year. We have opened 46 showrooms and aim for 50 by year-end. The brand is performing well, and we are on track with our expansion plans.
Q: Can you provide an update on your international expansion, particularly in the Middle East and new markets like the US and UK?
A: (Executive Director) Our expansion in the Middle East has been slower than planned, but we are working on a strategy to categorize markets by margin potential. This will help us scale up in international markets, including the US and UK, where we see potential for growth among the Indian diaspora.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
