Kalyan Jewellers regional-brand pilot targets organised value-jewellery growth across key Indian markets

Investment View and Valuation

In its August 23, 2026 company update, ICICI Securities maintains a positive view on Kalyan Jewellers India following the launch of Akshaya Thanga Maligai (ATM), the company’s first regional jewellery brand. The broker believes the initiative is strategically aimed at serving value-conscious consumers moving from unorganised jewellers to organised retail while continuing to prefer regional designs and economical price points.

ICICI Securities reiterates its BUY recommendation and retains its DCF-based target price of Rs 680, compared with the current market price of Rs 604.

Akshaya Thanga Maligai: Tamil-First Value Proposition

ATM launched its first store in T. Nagar, Chennai, a major jewellery hub with more than 15 prominent players. The approximately 20,000 sq ft, three-level store is organised by product category:

• The basement houses studded and silver jewellery.
• The ground floor offers everyday-wear jewellery.
• The upper level is dedicated to wedding jewellery.

ATM is positioned as a Tamil-first, value-oriented proposition. Its name, staffing, communications and entire inventory are designed around local preferences. Inventory is predominantly 22-carat gold jewellery, while studded jewellery represents approximately 10 per cent of inventory. Making charges range from 1 per cent to 10 per cent.

Management has appointed Tamil actor Sivakarthikeyan as brand ambassador to support awareness and engagement.

Regionalisation Strategy and Store Expansion

Management regards Tamil Nadu as the starting point for Kalyan Jewellers’ regionalisation strategy because the state represents approximately 15 per cent of India’s jewellery demand and Kalyan has a long operating history there.

The company plans four additional ATM stores in Tamil Nadu through the FOCO model, including one in Chennai and the others elsewhere in the state. These forthcoming stores are expected to have retail space of approximately 7,000 sq ft each.

Management aims to establish five regional jewellery brands, including ATM, organically over the next seven to eight years. It expects regional brands to require lower marketing expenditure than national brands through a cost-efficient marketing model.

Operating Model and Customer Cross-Sell Potential

Management expects ATM to operate at a lower gross margin than Kalyan stores, but with potentially higher inventory velocity. The format is targeting inventory turns of approximately four to five times.

ATM is also intended to serve as an entry format for acquiring value-conscious customers and potentially moving them into other Kalyan brands as their jewellery requirements and spending power increase.

Strategic Rationale and Pilot Economics

ICICI Securities considers the House of Regional Brands strategy a calibrated way to broaden Kalyan Jewellers’ reach without diluting or altering the flagship Kalyan brand’s positioning. The broker believes an ATM-to-Kalyan customer progression could be more effective than relying on migration from external regional brands.

ATM is viewed as a controlled pilot. If customer acquisition and unit economics demonstrate traction, the model could be replicated in other large regional markets. If the format underperforms, ICICI Securities believes downside is contained because fixtures and furniture can be written down at a nominal cost, while unsold finished-jewellery inventory can be reallocated to existing Kalyan stores.

The broker believes success could create a meaningful medium-term revenue contributor that is not yet fully reflected in consensus expectations.

Financial Outlook

ICICI Securities forecasts FY26-FY28E revenue, EBITDA and PAT CAGRs of 19 per cent, 16 per cent and 26 per cent, respectively.

Key Risks

• Weaker discretionary demand.
• Delays in FOCO store additions.
• Higher competitive intensity in Kalyan Jewellers’ core South Indian markets.