Despite broader market weaknesses, Kalyan Jewellers India Ltd. has seen its stock price surge on Friday, May 9, 2025. Several factors contribute to this positive momentum, ranging from strategic financial decisions to promising expansion plans and a favorable outlook for the jewelry sector.

One significant driver is the increase in stake by the company's promoters. In August 2024, Warburg Pincus, a private equity firm, divested its 9.2% stake in Kalyan Jewellers. A portion of this stake, 2.4%, was acquired by T.S. Kalyanaraman, the company's promoter, signaling strong confidence in the company's potential. The remaining 6.8% was sold via a block deal. Market responses to such promoter actions are generally positive, as they indicate the management's belief in the company's long-term prospects. Following this transaction, the promoter and promoter group's shareholding increased from 60.6% to 63%.

Kalyan Jewellers is strategically expanding its footprint in the Indian market, particularly in the non-South Indian regions, which contribute 49% of its revenue, up from 44% the previous year. The company aims to further strengthen its presence in these markets by opening more showrooms and enhancing its product offerings. As of August 2024, plans were underway to launch new collections and campaigns for the festive season, with intentions to inaugurate 35 Kalyan and 20 Candere showrooms before Diwali. The company is also making strides with its digital-first jewelry platform, Candere, with plans to convert it into a wholly-owned subsidiary and expand its online presence. Candere had already added 13 showrooms in the financial year of 2024, with a target of 50 by the end of the year, and a nationwide campaign was planned to boost Candere's brand visibility before the festive season.

Internationally, Kalyan Jewellers is focusing on its Middle East operations and had plans to convert four showrooms into franchises to reduce debt. The launch of its first showroom in the US was expected before Diwali in 2024, marking a crucial step in expanding its global presence.

Analysts have also noted the company's strong financial performance and growth potential. HSBC, in September 2024, suggested a 'Buy' rating on Kalyan Jewellers' stock, raising the target price to Rs 810 from Rs 600. HSBC highlighted that Kalyan is still in the midway of its value creation journey, with the potential to quadruple its store count in the current decade. They also pointed out that Kalyan has emerged as an entrenched national brand, differentiating it from regional rivals.

Furthermore, Kalyan Jewellers is focused on improving profitability and strengthening its financial position. The company has demonstrated margin gains through reduced advertising costs and better control over employee expenses and aims to optimize fixed costs and drive operating efficiency by leveraging its larger store network. Debt reduction is also a priority, with the company having reduced its debt by Rs 4.5 billion over the 18 months leading up to April 2025.

The positive sentiment is also reflected in analysts' forecasts, with an average broker rating of "Strong Buy" for Kalyan Jewellers. The consensus target price from analysts is ₹656.25, suggesting a potential upside compared to the current price.

It's important to note that while the stock is currently experiencing positive momentum, it is subject to market risks and fluctuations. On May 8, 2025, the stock was trading at ₹511.30, which is 2.17% lower compared to its previous closing price. Investors should consider various factors, including economic conditions, commodity prices, and regulatory changes, before making investment decisions.