# 1. Financial Performance ## A. Key Figures * **Consolidated Revenue:** **₹10,343 Cr** Q3 (+42%) · **₹25,468 Cr** 9M (+35%) * **Consolidated PAT:** **₹416 Cr** Q3 (+90%) · **₹941 Cr** 9M (+79%) * **Consolidated PBT:** **₹560 Cr** Q3 (+90%) · **₹1,263 Cr** 9M (+78%) * **India PAT:** **₹401 Cr** Q3 (+84%) ## B. Revenue Growth * **Exceptional Quarterly Momentum:** Record performance across all segments, fueled by festive demand and **same-store sales growth exceeding 30%** during the Diwali period. * **Sustained Growth Trajectory:** Q4 maintains strong customer traction and footfalls despite volatile gold prices, indicating resilient demand. ## C. Profit Margins * **Gross Margin Expansion:** Driven by higher studded jewellery sales, particularly in the South, and sustained benefits from procurement optimizations now in stabilization phase. * **Structural Margin Improvement:** Franchisee model refinements—particularly in CAPEX and cost-sharing—are delivering tangible uplift, with new franchise revenues amplifying impact. * **Operating Leverage Gains:** Declining ad and employee cost ratios are boosting margins; silver and platinum price swings remain minor, non-recurring influences. ## D. Cash Flow * **Proactive Inventory Management:** Company actively reducing absolute inventory value by **30%–40%** to mitigate cash flow pressure amid high gold prices, without disrupting operations. * **Resilient Cash Flow Profile:** Showroom model remains capital-light at peak prices, preserving liquidity and requiring no revision to cash flow plans. --- # 2. Store & Channel Performance ## A. Key Figures * **Candere Revenue Growth:** **117%** 9M FY26 · **144%** Q3 FY26 * **FOCO Stores:** **30** in South region (vs. 8–9 prior) * **Franchisee Stores:** **~30** in South, **200+** total nationwide * **Store Conversions:** **30** stores converted in last 2–3 quarters ## B. FOCO Stores * **Inventory Discipline:** Higher gold prices prompting volume trimming to maintain healthy stock turns across FOCO and franchise network. * **Expansion with Margin Improvement:** Ongoing FOCO store rollout accompanied by improving gross margins in both South and North-South regions. * **Sales Momentum:** Constant store-level promotions, including exchange offers and seasonal campaigns, driving customer traffic and conversion. * **Strategic Model Mix:** Candere’s growth leverages both FOCO and COCO models, requiring targeted capital allocation. ## C. Franchisee Expansion * **Partner-Centric Rollout:** Franchisees capable of multi-store operations, but onboarding starts with single stores to build a strong, aligned partner base. * **Regional Imbalance, Southern Leverage:** Despite limited franchisee density in the South (~30 of 200+ total), these stores are contributing disproportionately to regional revenue growth. * **Improved Contract Economics:** New franchise agreements under revised terms are more favorable to Kalyan, though financial benefits are phased. * **Hybrid Model Drives Net Additions:** Recent store conversions and relocations (e.g., Jaipur, South Ex) under hybrid franchise model explain gap between gross and net store additions. ## D. Candere Growth * **Explosive Omnichannel Growth:** Candere delivers triple-digit revenue growth in 9M and Q3, marking a major inflection in scale and market penetration. * **Profitability Milestone:** Platform turned PAT positive in Q3, validating business model and operational efficiency gains. * **Scaled Physical Footprint:** Network expanded to **110 stores**, reinforcing omnichannel integration and brand visibility. --- # 3. Product & Karat Mix ## A. Key Figures * **Studded Jewellery Mix:** **~30%** in franchisee stores (non-South) * **Gold Savings Contribution:** **18–20%** of revenue (stable YoY) * Old Gold Exchange Contribution: ~30% of revenue (+1–2% Q3 YoY) ## B. 18-Karat Adoption * **Strategic Karat Shift:** Company is increasing 18-karat inventory exposure to manage gold working capital while sustaining sales volume, supported by strong consumer adoption in select markets. * **Regional Divergence:** Two to three states are now predominantly 18-karat markets, though **South India shows slower acceptance**, necessitating differentiated regional strategies. ## C. Studded Jewellery * **Resilient Growth Driver:** Studded jewellery is seeing organic growth despite high gold prices, fueled by younger consumers, social media engagement, and effective upselling. * **18-Karat Advantage:** 18-karat studded pieces show higher acceptance than plain 18-karat gold, prompting focused new collection launches to accelerate trial. ## D. Gold Savings & Exchange * **Stable Ancillary Streams:** Gold savings and old gold exchange remain key demand drivers, together accounting for nearly half of sales, with increased traction in high-price environments. --- # 4. Geography & Market Mix ## A. Key Figures * **India Revenue:** **₹9,048 Cr** (QoQ) (+42%) · **₹6,386 Cr** prior year * **Middle East Revenue:** **₹1,073 Cr** (+28%) · **₹838 Cr** prior year * **Middle East PBT:** **₹26 Cr** (+44%) · **₹18 Cr** prior year * **Middle East Quarterly Profit:** **₹24 Cr** (+60%) · **₹15 Cr** prior year ## B. Southern Markets * **Regional Divergence in Demand:** Consumer shift toward 18-karat gold accelerating in North India, while **22-karat preference remains entrenched in the South** due to cultural and religious norms. * **Outperformance in the South:** Southern markets delivered strong double-digit revenue growth, significantly outpacing company-owned store revenue growth, supported by **higher per-store productivity**. ## C. Middle East Growth * **Robust Regional Expansion:** Middle East revenues and profits rose sharply year-on-year, driven by **strong underlying demand** and the addition of **around 4 new stores**. * **Franchise Partnership Talks:** Active discussions with Arab investors for **Kalyan franchise expansion** could unlock faster growth, though current guidance remains cautious. ## D. International Expansion * **Controlled Overseas Rollout:** Company plans to open **six to seven overseas showrooms annually**, constrained by underdeveloped franchisee ecosystems in target markets. --- # 5. Capital Allocation & CAPEX ## A. Key Figures * **Investment Allocation:** **₹300 Cr** for Candere & international pilots · **₹300 Cr** for debt reduction & dividends * **Maintenance CAPEX (India):** **₹175 Cr** (current year) * **Regional Showroom CAPEX:** **₹4–5 Cr** per unit (5 planned) * Candere Showroom CAPEX: ₹2–2.5 Cr total (30–40 units) ## B. Store Investments * **Strategic Expansion:** Capital deployed across Candere omnichannel growth, international pilot stores (UK/U.S.), and evaluation of LGD-focused formats to capture evolving demand. * **Phased Rollout:** Five regional showrooms in India may be delayed; partial openings possible this year, with full execution likely in next fiscal. * **Future CAPEX Visibility:** No specific figures provided for 2026–2027, but expansion plans remain active across domestic and international markets. ## C. Debt & Dividends * **Capital Discipline:** Equal allocation of free cash flow to growth (Candere/pilots) and shareholder returns/deleveraging, reflecting balanced capital policy. * **Debt & Pledge Reduction:** Loan levels meaningfully reduced; pledged shares to be further cut over next six months, supporting balance sheet strength. ## D. Real Estate Sales * **Asset Monetization:** Mediators appointed to facilitate sale of real estate assets, with transaction expected to close by **H1 FY27**. --- # 6. Demand & Consumer Trends ## A. Key Figures * **Market Size:** **₹60–70 Cr** (estimated) * Stock Turn: 2x–2.5x in first three years ## B. High Gold Price Impact * **Demand Resilience:** Tonnage may be recalibrated in stores to reflect higher gold prices, but volume targets and financial planning are proactively adjusted during onboarding. * **Consumer Mitigation:** Installment and savings schemes support demand by enabling **monthly price fixation** and staggered payments, reducing upfront burden. * **Inventory Discipline:** Market absorption limits inventory expansion, with stock turns expected to remain moderate at 2x–5x over the initial three years. --- # 7. Risks & Pricing Exposure ## A. Gold Price Volatility * **No Exposure to Gold Price Swings:** GML portfolio remains stable with **no risk of write-downs** and unchanged interest costs, supported by a **fully protective hedging policy**. * **Hedging Discipline Maintained:** Company remains insulated from gold price volatility; **no margin benefit or risk** taken on gold fluctuations. ## B. Franchisee Execution * **Resilient Franchise Growth:** Franchise sign-ups continue strongly despite **near-doubling of gold prices**, underpinned by flexible capital planning and staggered investment models. ## C. Karat Acceptance Risk * **18K Growth Nuanced by Base Effect:** High reported growth in 18-karat jewellery stems from a **low base**, with **limited regional acceptance** indicating uneven market penetration versus 22-karat. --- # 8. Guidance & Outlook ## A. Key Figures * **Store Additions:** **80–90** annually targeted · **84** planned for FY26 ## B. Store Expansion * **Sustained Growth Trajectory:** Store rollout remains on track with a clear annual cadence under KJ India, signaling disciplined scaling into FY27. ## C. Revenue Momentum * **Positive Quarterly Run Rate:** Current quarter off to a strong start, with expectations for continued momentum through year-end. ## D. Strategic Launches * **Third Regional Brand Launch Imminent:** Planned for current quarter, initially confined to **one state**, marking a cautious, test-market approach.