- Our view
- Buy
- Price at our call
- ₹ 742.50
- Target
- ₹ 928.00
- Since our call
- −2.09%
- Status
- Open
- Market cap then
- INR 1,837 Cr.
Khazanchi Jewellers Ltd sells gold, diamond and fusion jewellery through retail, wholesale and bullion channels. Minerva Capital Research Solutions sets a target price of INR 928 from a CMP of INR 742.50/- and cites ~25% upside, but the note does not state a Buy, Hold or Sell rating. The growth case rests on a planned flagship showroom, new product lines and projected earnings growth; execution and working-capital needs are key risks.
About Khazanchi Jewellers
Khazanchi Jewellers Ltd. was founded in 1971 and incorporated in 1996 in Chennai, Tamil Nadu. It sells jewellery and bullion through retail, wholesale and bullion channels; its retail showroom is in Sowcarpet, Chennai, while its wholesale business serves 2,000+ clients. The company has a 5 Lakh + design library across gold, diamond and fusion jewellery, spanning 25+ product categories. It holds a BIS Hallmark certificate and is certified for bullion transactions on India International Bullion Exchange (IIBX).
Investment Rationale for Khazanchi Jewellers
- Retail expansion: The company plans a 10,000 sq.ft. flagship showroom in Sowcarpet, Chennai. It expects the store to contribute INR 550 Cr. annually, with retail operating margins potentially reaching ~11% to 13% compared with the current ~9% to 10%.
- New product lines: Vajraa Diamonds by Khazanchi is a premium natural diamond jewellery line. Management expects diamond jewellery sales to contribute 5% to 10% of total topline sales over 2-3 years; fine silver jewellery is another initiative.
- Established presence and experience: Minerva highlights the company’s 51+ years of experience, Tamil Nadu brand presence and craftsmanship. Promoter and Managing Director Mr. Tarachand Mehta has over five decades of experience in the jewellery industry.
- Wholesale customer base: The report notes 2,000 active B2B customers, pointing to acceptance of the company’s designs, fulfilment and customer service.
- Improving H1-FY26 margins: The report attributes the margin improvement to higher inventory efficiency and a greater contribution from premium categories. H1-FY26 EBITDA margin was 5.6% and PAT margin was 4.1%.
- Market and listing developments: The note cites expected Indian jewellery market growth of 16% CAGR from FY24 to FY28 and says the company will be eligible to migrate to the mainboard in Aug’26 after completing 3 years of listing.
Khazanchi Jewellers Key Financials
| Particulars | FY23 | FY24 | FY25 | H1-FY26 | FY26 (P) | FY27 (P) | FY28 (P) |
|---|---|---|---|---|---|---|---|
| Op. Revenues | 481 | 821 | 1,772 | 952 | 2,091 | 2,614 | 3,267 |
| Rev. Growth % | 87% | 71% | 116% | 26% | 18% | 25% | 25% |
| EBITDA | 16 | 41 | 64 | 53 | 98 | 141 | 185 |
| EBITDA % | 3.2% | 5.0% | 3.6% | 5.6% | 4.7% | 5.4% | 5.7% |
| PAT | 8 | 27 | 45 | 39 | 68 | 95 | 127 |
| PAT % | 1.6% | 3.3% | 2.5% | 4.1% | 3.3% | 3.6% | 3.9% |
FY26, FY27 and FY28 figures are marked (P) in the report.
The report projects revenues of 2,614 in FY27 and PAT of 95 in FY27. Its valuation table uses INR 95.1 Cr. as the FY27 base-case PAT.
Valuation and Target Price
Minerva values Khazanchi Jewellers at ~24.15x FY27 PAT, described as a ~15% discount to the industry PE of ~28.5x. The base case assumes FY27 PAT of INR 95.1 Cr. and gives a target price of INR 928, with stated upside of ~25% from the CMP of INR 742.50/-. The report does not state a Buy, Hold or Sell recommendation.
- INR 742.50/-
- CMP (05-Dec’25)
- INR 928
- Target price
- ~25%
- Stated upside
- INR 1,837 Cr.
- Market capitalisation
Key Risks
- Outsourced manufacturing: The company relies on outsourced manufacturing and its relationships with artisans to introduce new designs.
- Showroom execution: Topline growth and margin expansion depend on the new flagship store, which has experienced delays compared with timelines previously indicated by management.
- Working capital: The upcoming store will require inventory of INR 150 Cr. as indicated by management, making optimal working-capital utilisation important.
- Related-party transactions: Purchase and sales of goods to Pathik Sales Pvt. Ltd., a related party with common directors and relatives of Directors, represented ~48% of FY25 annual turnover.
- Industry demand and competition: Demand could decline amid rising gold prices, or larger players could adjust making charges amid high competitive intensity.
Business and Growth Initiatives
The company’s FY25 retail sales were INR 88.59 Cr., or 5% of total sales. The planned showroom’s puja was scheduled for 12-Dec’25, with a grand launch planned for mid-January’26 around the Pongal festival. The company expects total retail sales to account for ~20% to 25% of total sales after the expansion. The report also cites management’s expected diamond jewellery margins of 10% to 12% for B2B and 16% to 18% for retail.
Industry Context
The report expects the Indian jewellery market to grow by 16% CAGR from FY24 to FY28, supported by a rising share of organised jewellery retail. It notes that southern states contribute ~40% of the Indian gold jewellery market.
Our View
The report’s valuation case links earnings growth to the new showroom, improved margins and newer product categories, and sets a target of INR 928. Delivery depends on the flagship store and working-capital management, while related-party transactions are also a material stated risk. The note does not print a Buy, Hold or Sell rating.
Standard disclosures
- Research Analyst has served as an officer, director or employee of subject company(ies): No
- We or our associates have received compensation from the subject company(ies) in the past 12 months: No
- We or our associates have managed or co-managed public offering of securities for the subject company(ies) in the past12 months: No
- We or our associates may have received compensation for investment banking or merchant banking or brokerage services from the subject company(ies) in the past 12 months –No
- We or our associates may have received compensation or other benefits from the subject company(ies) or third party in connection with the research report –No
- We or our associates or Research Analyst or his/her relative's financial interest in the subject company(ies)- No
- Nature of financial interest in subject company, if any –Nil
- We, our associates or Research Analyst have actual/beneficial ownership of 1% or more securities of the subject company (ies) at the end of the month immediately preceding the date of publication of Research Report – No
- Subject company (ies) may have been client during twelve months preceding the date of distribution of the research report-No.
- We or our Associates or Research Analyst are engaged in market making of subject company – No
- By referring to any particular sector, Minerva Capital Research Solutions does not provide any promise or assurance of favorable view for a particular industry or sector or business group in any manner. The investor is requested to take into consideration all the risk factors including their financial condition, suitability to risk return profile and take professional advice before investing. Such representations are not indicative of future results.
- There are either no material conflict of interests or all existing and potential conflict of interest are disclosed herein.
Regulatory disclosures
Minerva Capital Research Solutions is an independent investment advisory firm founded by Nishant Gupta(SEBI registration no. INH000018896).
Registration granted by SEBI and certification from NISM in no way promise or guarantee that the research recommendation will provide any assured, minimum or risk-free return to the investors.
The research report serves as general information and does not account for individual investment goals, financial situations, or needs. Minerva Capital Research Solutions strives to provide reliable and comprehensive information, sourced from what are believed to be trustworthy channels. However, this information has not been independently verified by Minerva Capital Research Solutions or its analysts, and no guarantees are made regarding its accuracy or completeness.
The opinions expressed in this report reflect the views of the research analyst at the time of publication and may change over time. Minerva Capital Research Solutions and its affiliates as on date of publication of this report may or may not hold any positions in the securities discussed. The views presented are general and do not consider individual risk tolerance or investment objectives; therefore, readers should seek independent professional advice before making investment decisions.
Minerva Capital Research Solutions does not guarantee a favorable outlook for any specific industry or sector and urges investors to consider all relevant risk factors, including their financial circumstances, before investing. The analyst certifies that their views accurately represent their personal opinions on the companies discussed and that no part of their compensation is tied to specific recommendations made in this report.
This material should not be interpreted as an offer or solicitation to buy or sell securities in jurisdictions where such offers would be illegal. Consequently, brokerage and investment services described herein are not available to Canadian or U.S. persons. Distribution outside India requires prior written consent.
This Research Report assumes that the recipient will assume all risks associated with its contents. If there are any disagreements or dissatisfaction with this report or its disclaimer, the only recourse is to cease using it. Minerva Capital Research Solutions and its affiliates will not be liable for any direct or indirect losses resulting from the use of this report. Recipients are required to adhere to these restrictions. The material is for the personal use of authorized individuals and does not constitute a solicitation or offer to buy or sell any securities in jurisdictions where such actions would be illegal.
For any queries or grievances: Mr. Nishant Gupta | Email: nishant.gupta@mcapital.in or guptanishant.iimi@gmail.com| Contact Number: 8171433387 | Website: www.mcapital.in | Twitter: @Mcapital_In
Rating rationale
Minerva Capital Research Solutions endeavors to provide objective opinions and recommendations. Ratings are assigned to stocks according to their fair value vs current market price and then categorizes them as Buy, Hold, Reduce, Sell. The performance horizon is one year unless specified and fair value is defined as analyst’s valuation for a stock.
- Buy:> 15%
- Hold: -5% to 15%
- Reduce: -15% to -5%
- Sell: <-15%