SEC/44 /2024-2025 August 05, 2024

1. National Stock Exchange of India Ltd. 2. BSE Limited

Exchange Plaza Corporate Relationship Dept.
Plot No. C/1, G Block Phiroze Jeejeebhoy Towers, Dalal Street
Bandra –Kurla Complex Bandra (E), Mumbai 400001
Mumbai 400 051 Maharashtra, India
Symbol: KALYANKJIL Scrip Code: 543278

Dear Sir/Madam,

Sub: Earnings Call Transcripts

Pursuant to Regulation 46(2) (oa) of the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, we hereby inform the exchanges that the transcript of audio call recording of the
Company’s Analyst Call to discuss the unaudited Financial Results (standalone and consolidated) for
the quarter ended on 30th June, 2024 is attached herewith.

Kindly take the same into your records.

Thanking You
For Kalyan Jewellers India Limited
Digitally signed by
RETNAVILASAM RETNAVILASAM
GOPINATHAN GOPINATHAN
JISHNU
NAIR

NAIR JISHNU Date: 2024.08.05

12:13:08 +05'30'
Jishnu RG
Company Secretary & Compliance Officer

Kalyan Jewellers India Limited

Corporate Office -TC-32/204/2, Sitaram Mill Road, Punkunnam, Thrissur, Kerala – 680 002
CIN - L36911KL2009PLC024641
T -0487 2437333 Email – cs@kalyanjewellers.net
WWW.KALYANJEWELLERS.NET
 “Kalyan Jewellers Limited
Q1 FY '25 Earnings Conference Call”
August 01, 2024

“E&OE - This transcript is edited for factual errors. In case of discrepancy, the audio recordings uploaded on the
stock exchange on 1st August 2024 will prevail.”

MANAGEMENT: MR. RAMESH KALYANARAMAN – EXECUTIVE

DIRECTOR – KALYAN JEWELLERS LIMITED
MR. SANJAY RAGHURAMAN– CHIEF EXECUTIVE
OFFICER – KALYAN JEWELLERS LIMITED
MR. V. SWAMINATHAN – CHIEF FINANCIAL OFFICER –
KALYAN JEWELLERS LIMITED
MR. SANJAY MEHROTTRA – HEAD OF STRATEGY AND
CORPORATE AFFAIRS – KALYAN JEWELLERS LIMITED
MR. ABRAHAM GEORGE -- HEAD OF INVESTOR
RELATIONS AND TREASURY – KALYAN JEWELLERS
LIMITED

MODERATOR: MR. RAHUL AGARWAL – STRATEGIC GROWTH

ADVISORS

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 Kalyan Jewellers Limited
August 01, 2024

Moderator: Ladies and gentlemen, good day, and welcome to Q1 FY '25 Earnings Conference Call of Kalyan
Jewellers India Limited. This conference call may contain forward-looking statements about the
company, which are based on the beliefs, opinions and expectations of the company as on date
of this call. These statements are not the guarantees of future performance and involve risks and
uncertainties that are difficult to predict.

As a reminder, all participant lines will be in the listen-only mode, and there will be an
opportunity for you to ask questions after the presentation concludes. Should you need assistance
during the conference call, please signal an operator by pressing star then zero on your touchtone
phone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Rahul Agarwal. Thank you, and over to you, sir.

Rahul Agarwal: Thank you. Good evening, everyone, and thank you for dialing us on Kalyan Jewellers India
Limited Q1 FY '25 Earnings Conference Call. On the call, we have with us Mr. Ramesh
Kalyanaraman, Executive Director; Mr. Sanjay Raghuraman, CEO; Mr. V. Swaminathan, CFO;
Mr. Sanjay Mehrottra, Head of Strategy and Corporate affairs; and Mr. Abraham George, Head
of Investor Relations and Treasury.

I hope everyone got an opportunity to go through our financial results and investor presentation
uploaded on company's website and stock exchange. We will begin the call with opening
remarks from management, following which we will open the forum for question-and-answer
session. Before we start, I would like to point out that some statements made in today's call
may be forward-looking in nature and a disclaimer to this effect has been included in the earnings
presentation shared with you earlier.

I would now like to invite Mr. Ramesh Kalyanaraman, Executive Director of Kalyan Jewellers
India Limited to give you the opening remarks. Thank you, and over to you, sir.

Ramesh Kalyanaraman: Thank you. Good afternoon, and let me welcome everyone to the call. There could be some
disruption in the phone because Kerala is raining heavily and you know about the Kerala floods.

The quarter was a fantastic one, and we recorded consolidated revenue growth of around 27%
and stand-alone India revenue grew by around 29%. The SSSGs were also very strong. We
witnessed robust operating performance across all our markets in India and Middle East despite
extreme volatility in gold prices and a strong base quarter.

We continue to see encouraging trends around the share of new customers, which was in excess
of 35% for the recently concluded quarter. Our share of revenue from the non-South market is
now at 49%, up from 44% in the prior year. Gross margins at the showroom level improved
marginally, driven largely by higher share of studded jewelry in both South and non-South
market.

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 Kalyan Jewellers Limited
August 01, 2024

Advertisement spends during the recently-concluded quarter has been higher to mitigate the
impact of volatile gold prices and to drive market share in certain new markets. Our digital-first
jewelry platform, Candere, recorded robust revenue growth in the recently concluded quarter.

We have signed documentation to increase our stake in the business and convert Candere to a
wholly-owned subsidiary of Kalyan Jewellers India Limited. Candere has added 13 showrooms
in the financial year so far out of the targeted 50 showrooms during the year. We are putting
together a brand strategy for Candere, centered around communication and positioning and
expect to launch a nationwide campaign before the upcoming festive season.

Let me give you an update about our international markets. Middle East recorded healthy SSSGs
during the recently concluded quarter. We plan to convert four showrooms in the region to
franchise once during the ongoing quarter and utilize the proceeds to reduce the debt in the
region. The first showroom in the U.S. is expected to be launched before Diwali.

Talking about the ongoing quarter, we began the quarter on a very strong note and the recent
reduction in customs duty on gold has provided further fillip to demand on the ground. We are
updated about the upcoming festive season across the country and are gearing up for the launch
of fresh collections and campaigns. During the month of July, we opened five Kalyan and two
Candere showrooms and are on track to launch another 35 Kalyan and 20 Candere showrooms
before Diwali.

Now I would invite Sanjay to give you Q1 financial update. Over to you, Sanjay.

Sanjay Raghuraman: Thank you, Ramesh. Hello, everybody, and good afternoon. I'm really happy to be talking to
you all after a great set of quarterly numbers. In the just concluded quarter, the company reported
a consolidated revenue of INR 5,535 crores, a 27% growth over the corresponding quarter in the
previous years. Consolidated EBITDA came in at INR 376 crores versus INR 323 crores in the
corresponding quarter of the previous year. And consolidated PAT, profit after tax came in at
INR 178 crores versus INR 144 crores in the corresponding quarter of the previous year.

Moving now to talk of the breakup of the numbers between India and the Middle East of the just
concluded Q1. Our India revenue was INR 4,687 crores versus INR 3,641 crores when compared
to the corresponding quarter of the previous year. And India Q1 EBITDA came in at INR 315
crores versus INR 269 crores when compared to the corresponding quarter of the previous years.
India Q1 PAT came in at INR 165 crores compared to a PAT of INR 129 crores in the
corresponding quarter of the previous year.

Moving on now to talk about the Middle East business. Revenue in the Middle East for the just-
concluded quarter came in at about INR 811 crores versus INR 700 crores when compared to
the corresponding quarter of the previous yearand EBITDA in the Middle East came in about
INR 64 crores versus INR 55 crores for the same period in the previous year. Middle East
business reported a profit of INR 19 crores for the quarter, compared to INR 17 crores in the
corresponding quarter of the previous year.

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August 01, 2024

Lastly, talking about our e-commerce business, Candere, we posted a revenue of INR 49 crores
in the quarter versus INR 34 crores in the corresponding quarter of the previous year. And this
quarter recorded a loss of INR2.2 crores, which is the same as what it was for the corresponding
quarter of the previous year.

With this, I'm done with the summary of the financials. We'll now open the floor for questions.
Thank you.

Moderator: We will now begin the question-and-answer-session. The first question is from the line of
Gaurav Jogani from Axis Capital. Please go ahead.

Gaurav Jogani: Thank you for the opportunity, sir. Congrats on a good set of numbers. Sir, my first question is
actually a clarification. You said you opened five Kalyan stores in the month of July and you
expect to open 35 more showrooms before the quarter end. Did I hear that right?

Ramesh Kalyanaraman: Before Diwali I meant.

Gaurav Jogani: 35 before Diwali, okay. And Candere, how many have you opened in July and how many more
are expected going ahead?

Ramesh Kalyanaraman: So Candere, July, we opened, as we speak, 2, and we will open 20 more before Diwali.

Gaurav Jogani: Okay, 20 more before Diwali. And sir, with regards to this custom duty cut, I actually have two
questions. One, how much of this has given you an advantage in terms of the footfalls. So for
example, post 23rd of July, how much of an increase have you seen in footfall in our showrooms?
And second question, related to custom duty is, what is the impact that you will see on your own
inventory that is on gold on lease because of this custom duty cut.

Ramesh Kalyanaraman: First coming to footfalls, July itself started off very well. The first 2, 2.5 weeks was good. SSSGs
were very similar to what it was in Q1. But post the duty cut, again, when the price comes down
by 7%, 8% customers who were waiting would have come in immediately. So the last 10 days
have been very good, especially weekends. And it is stronger than Q1 in terms of SSG.

Gaurav Jogani: And sir, what's the impact on the inventory because of this custom duty cut?

Ramesh Kalyanaraman: Approximately, we have -- it will be in the range of INR 120 crores, INR 130 crores.

Gaurav Jogani: Overall, the impact. Okay.

Ramesh Kalyanaraman: Overall impact, yes. It should come out, meaning in Q2 plus Q3.

Gaurav Jogani: Beautiful. But sir, this would be at your level impact, right? I mean your -- even the stocks that
will be lying at the franchisee level also. I mean, that impact will not be accounted in this one,
right?

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August 01, 2024

Ramesh Kalyanaraman: No, no, that does not come, because we have already sold it, no? and priced in. So that will be
only for them. And they are basically hedging their cash flow. So it's not an impact for us.

Gaurav Jogani: Got it, sir. Sir, and my second question also is with regards to -- if you look at the revenue per
showroom in the India business, I mean the revenue per showroom has actually gone down to
around -- for the quarter, I am saying, is around INR 22 odd-crores versus INR 23.8 odd crores
in the base quarter.

Now I understand that because we're opening a lot more franchising the showrooms, and that
has been a smaller size that will be impacting this. But any other reason that you can help us to
quantify this? And how should we look at the revenue cost for going ahead? If anything you can
help us out with that?

Ramesh Kalyanaraman: Yes. You yourself told the answer. Our own showrooms are at INR 90 crores plus when it comes
to per showroom revenue. But when you come to franchisee new stores, the revenue will be only
in the range of INR50 crores. So the more number of new showrooms you open, the revenue per
showroom will come down. It will keep coming down.

Gaurav Jogani: Sure. So it's expected to impact at least for this year, I think because in the next year onwards,
you will have a decent size of franchise stores already in the base and so that should not impact
going ahead. Is that the right understanding?

Ramesh Kalyanaraman: So, once you have a good number of own showrooms where your revenue per showroom is INR
90 crores. All the additional new showrooms are coming at INR 50 crores. So, since that own
store level is at INR 90 crores, the more number of showrooms you open, the per showroom
revenue will keep coming down.

Gaurav Jogani: Got it. Got it.

Ramesh Kalyanaraman: Even if we have a number of -- even if you add a number of showrooms, that own stores is at
INR 90 crores INR 100 crores, no. So that will be still there.

Gaurav Jogani: Sure, sure. And sir, third is -- the last question is with regard to the interest cost. So, if you look
at the interest cost both at the stand-alone and the consolidated level, it seems to have gone up
marginally. Ideally because your debt is coming down, we were expecting this number to come
down. So, any reason for this to increase?

Ramesh Kalyanaraman: Yes, Swaminathan?

V. Swaminathan: Hello. So with regard to interest cost, the number includes lease interest, which definitely will
go up as we increase number of showrooms, if you remove lease interest, you can say Q-o-Q it
has come down by INR 3 crores to INR 4 crores. And year-on-year, it has come down by INR
11 crores.

Gaurav Jogani: You mean to say that the interest on the debt, basically largely because of the...

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August 01, 2024

V. Swaminathan: Increase in number of showroom and the impact of Ind AS 116. So notional interest, it is not
bank loan interest.

Gaurav Jogani: Yes. But sir, because you are opening stores on franchise, but because and the lease is here and
that is why it is coming here, right? Is that the right understanding?

V. Swaminathan: Yes. So own showrooms -- I mean, franchisee showrooms also coming under Ind AS 116. And
there will be some setup because of franchisee owning the shop. But net to net, there will be
increase in Ind AS 116 impact.

Gaurav Jogani: Sure. And sir, the last question actually is with regards to the newest showroom that you're going
to open a franchise basis. I think in those showrooms, you will be -- the capex will also be
incurred by the franchise partner only. Also, is there any change in the terms of the margin or
anything that will be accruing to you because of this new arrangement?

Ramesh Kalyanaraman: Yes. So, out of the 80 showrooms, which we are opening for the financial year. The first 30, 35
showrooms will be in our old model wherein the capex will be put by Kalyan. The rest of the
showrooms, the franchisee partners will put the capex fit out also. So, that is the plan. And
margin, as I indicated in the past, there will be an increment of, say, 0.25% on the gross level.

Gaurav Jogani: On the gross level?

Ramesh Kalyanaraman: So, 0.25% margin growth will be there.

Gaurav Jogani: Okay. Okay. Okay. Got it. That's all for me. Thank you.

Ramesh Kalyanaraman: Yeah.

Moderator: The next question is from the line of Manoj Menon from ICICI Securities. Please go ahead.

Manoj Menon: Hi, Ramesh and team. Great performance, must say, in whichever context we look at it. Just one
thing, I just wanted to understand from you and team is when I look at your same-store growth
performance, which has been absolutely top of the street versus being listed -- other listed
players. So if you could just elaborate a bit about -- and in fact, the inflationary gap has
accelerated, right, which is actually a very good sign. Can you just tell us about, let's say, what
has been driving this? What are the interventions you would have done, let's say, versus
competition in terms of the faster share gain for you versus income -- other income? Thank you.

Ramesh Kalyanaraman: So, SSSG as you are aware, we have been expanding our store network across the country for
the last two or three years okay? And usually, year two and three have higher SSSG and
therefore, with every passing year, we should see an uptick on our SSSG. Secondly, in SSSG of
our existing stores, the reason according to us is very simple. More number of showrooms, more
expansion, thereby meaning more visibility for Kalyan and thereby helping generate more
footfalls and revenue.

Manoj Menon: Understood. Network effect. Understood. Understood Yes.

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August 01, 2024

Ramesh Kalyanaraman: And one more thing. While the above reasons help us to have a healthy SSSG, can you compare
with existing players in that, there will be naturally a bigger difference since we would have
gained market share from the existing players. So just to highlight our SSSG in south are
marginally better than north.

Manoj Menon: Understood. Is there anything to do with any changes in assortment or marketing strategy?
Anything sure of that, which is -- I mean, which is something which is already there in the
market, if you could talk about?

Ramesh Kalyanaraman: So we were very active, especially because the prices were very volatile. So the campaigns were
very active. And now the digital marketing also helps us to keep the noise level high in market
where we require and we can also check whether the competition is active in that region in terms
of marketing. So we increase our marketing spend in the so called store or region.

So all together, we have been active. Our team also have been doing a good job. So all put
together the numbers are good. And in South, in certain states, I just want to tell you that we are
experiencing higher than usual SSSG. And that I have told you before also majorly we feel that
there has been a strategic misstep taken by two players in South, especially in Tamil Nadu where
we actually are getting higher than usual SSSG.

Manoj Menon: Interesting, interesting, thank you.

Moderator: Thank you. The next question is from the line of Darshan Jhaveri from Crown Capital. Please
go ahead.

Darshan Jhaveri: Thank you so much for taking my question. Congratulations on such a great set of results, sir.
So, I just wanted to know like we've been growing at such a great rate right now, both on SSSG
and new front, like consolidated we're doing 27%, 30% growth. So will we be able to sustain
this for a longer period of time? What kind of revenue guidance would you have maybe FY '25-
'26?

Ramesh Kalyanaraman: Yes. So I will not be able to give a guidance, but what we will say is that you know the store
expansion plan, which we have 80 showrooms. SSSG for the year 2, year three are usually higher
than insurance. And again, July if you see, the SSSGs are even stronger than in Q1, okay? So all
put together, I think this will be the range where we need to target for our SSSG and for our
revenue growth.

Darshan Jhaveri: Okay. Fair enough, sir. And sir, I just wanted to also know like now as we maybe add more
studded, we are growing, so some margins like PBT margins, could we reach the 5% PBT margin
that we are maybe trying?

Sanjay Raghuraman: Yes, ideally, we should. But Q1 also we missed because as I mentioned now, the marketing
spend was a bit on a higher note than it should have been, especially because of the high gold
prices and competition in the local -- by the local players. Regional players were very high in
certain markets, so we do not want to lose market share.

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August 01, 2024

So again, the operating leverage we thought would come from marketing, did not come. And
that is why the PBT did not grow more than our revenue. But Q2, I think we should because the
revenue growth which we see now on ground, I think roughly it will happen. So the competition
-- if competition reacts then we'll have to react in terms of marketing. That's why we are not able
to do it. But I think on a yearly basis, the objective will be achieved. In India, we are already at
4.8% PBT, just to – in our view.

Ramesh Kalyanaraman: Yes. So for the full year, maybe we can see the PBT target plus, yes.

Darshan Jhaveri: That's great to hear, sir. And I just wanted to know on a more broad base just like maybe
questions have already been repeated in the past. So like do we see some competition from fast
jewelry or like how now then the lab-grown diamonds or something. Will that overall impact in
longer term? Or how are we just seeing these to be two different markets, some colour on that?

Ramesh Kalyanaraman: Yes, lab-grown, we have not seen any demand so far in the store level. There is no -- it's like
literally 0 demand at our store level. Customer inquiry is very minimalistic and we are surely
looking into what is happening on ground. And once there is demand we supply, so that we are
retailers, if there is demand then we should supply. But why we are not promoting lab-grown
diamonds because the price has not been stabilized. So, if the price crashes for the lab-grown
diamonds, customer is buying those diamonds because they trust Kalyan as a brand. So if the
price goes down, they will feel very offended. So that's why we are not encouraging lab
diamonds, but we are closely watching.

Darshan Jhaveri: Okay. Okay. Fair enough, sir. And just my last question, sir, with -- I just want to clarify, like
the impact of the duty cut you're seeing, it would be around INR 120 crores, INR 130 crores,
that would be the impact on profitability?

Sanjay Raghuraman: Yes, that will be the range.

Darshan Jhaveri: Yes, okay, okay. Fair enough, sir. Yes, I think that answers all my question, sir. All the best.
Thank you so much, sir.

Sanjay Raghuraman: Thanks.

Moderator: The next question is from the line of Vikrant Kashyap from Asian Markets Securities. Please go
ahead.

Vikrant Kashyap: Good evening, sir. Congrats on a very good set of numbers. First question is on the performance
of Middle East businesses, so your revenue growth has been 16% but PAT growth has been
11%.

Ramesh Kalyanaraman: We have already received that. I think it was summarized this. Because I told you that we've got
some disturbance in the line because of the flood. Can you repeat the question?

Vikrant Kashyap: Okay. Yes, yes, I will repeat again. So my question is pertaining to the Middle East performance.
Our revenue growth has been very strong at 16%, SSSG at 10%, but PAT growth is 11%. You

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August 01, 2024

have highlighted two points so far that FOCO showroom, expense has impacted some of the
gross margin and also on the pricing and finance cost. Sir, my question is how are you going to
address this? Because if you continue to grow at a higher level, but bottom line is not expanding
related to the top line, it will going to impact your overall performance? So, what are the steps
you are taking to improve the bottom line in the businesses

Sanjay Raghuraman: Finance costs will be taken care because we told you when we convert stores, that money is
going to reduce our debt. Okay. And again, FOCO, when you do FOCO showrooms, the margins
will come down. And surely, that will have an impact on the gross margin. Okay. And interest,
if you look at actually, the interest rates have been going up last year. So next year, that will be
the base, right? So then again, we will not have this kind of issue is what we feel. So interest
rates have been going up over the past year, one year, in that region.

And we are also beginning to repay loans now because of conversion. So all put together, interest
part will be taken care but other area where FOCO showrooms will surely reduce our margin.
We cannot have the own store margin. So that should be the way we should look at it.

Vikrant Kashyap: Have you -- are you able to reduce any debt in quarter one in Middle East and India?

Ramesh Kalyanaraman: So India, we are not reduced, but the cash balance has been increased to around INR75 crores,
but we have not reduced any debt in Q1 in India and Middle East because Middle East we have
not converted any showroom in Q1.

Vikrant Kashyap: Yes. Okay. And your presentation also mentioned that you have converted three showrooms in
South markets. So could you please discuss the model and how we are dealing with franchise. I
mean is it similar to non-South? Or it is different from non-South markets?

Ramesh Kalyanaraman: Yes. I told you, South itself each state behaves differently. We are still doing a pilot. So very
tough for us to give a clarity on the numbers and the workings. But we know that the margins
are lesser in South. (inaudible)are a bit more than North-South. And the expectation for the brand
is also lesser than non-south in terms of margin. Franchise partner also expects lesser than a non-
South. So that is the model where we are looking at. And maybe in a couple of quarters, we can
give you an idea of the model.

Vikrant Kashyap: Okay. One question on competitive intensity. So, in the recent, the last week event one of the
big players given a signal that they are entering into a jewelry retailing business and they have
given a guidance of investing INR 5,000 crores. And most of the showrooms that they're
targeting non-south markets, where you have been also expanding there. So given this increasing
competitive intensity, how do you place Kalyan going ahead?

Ramesh Kalyanaraman: It has to be -- even now we are talking the 35%, 40% of organized segment. So there are -- there
is an easy vacuum or easy space for at least three or four more players in the sector. That is the
first thing which we have to understand.

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Second thing is that if a good player comes, it is good for all organized players and market is
also big enough. And if you look at your comment on one particular brand it is too early to
comment because each brand will have their own strategy. And the strategy has not been
revealed yet because it's too early for us to understand the strategy of the brand, which launched
recently.

But Kalyan, it's a very unique kind of strategy which we have where it's a hyper-local brand. In
each region, we behave in such a way that it's a part of the region. So it takes time even for a
new brand to come and do the same, it takes good number of years to do the same if they intend
to replica. So we don't see any immediate competition coming in. But of course, there will be
new stores of the brands coming near to us, and they will also be catering a different segment of
customers.

Vikrant Kashyap: Okay. Great. I have one last question on -- related to a recent increase foot-fall in duty cut. So
sir, could you allude this? Are we seeing wedding buying because of the price cuts? Or do you
see that it is only a daily wear products have been selling at a much higher pace?

Ramesh Kalyanaraman: Both are there. But again, one thing I will tell you this demand increase, which we see over the
past 10 days is not going to stay very long. So it might end up any time as we speak. Because
people would have been waiting for many reasons because they would have thought that the
gold price were high according to their estimates.

Suddenly, when 7% to 8% came down, people came in and bought. It can be a wedding purchase
again, they would have preponed their purchase. A lot of discretionary purchase, which was
pending because of the high gold prices would have come back immediately? So both are there.
And we also believe that it cannot last too long. It can be maybe one week, 10 days or 15 days.
That is what we also think will be the case.

Vikrant Kashyap: Okay, great sir. Thank you for answering my question. And wish you the best of luck.

Moderator: The next question is from the line of Ashish Kanodia from Citibank. Please go ahead.

Ashish Kanodia: Hi, team. Congrats on a good set of numbers. Ramesh the first question was on the operating
leverage. So I understand that ad spend was higher because of the volatility in gold price. But if
I just look at the employee cost and other expenses, I think that has also increased on a Y-o-Y
basis. So, is it more to do with the fact that some of the expenses have been front loaded because
we plan to bring 35 stores over the next 2 months or so. So -- and maybe in the second half, we
will see a much higher operating leverage, Is that the right way to look at the employee cost and
other expenses?

Ramesh Kalyanaraman: Yeah, that's what I told you before, because we are -- employee cost, we are, of course, adding
a lot of employees or showrooms, which has to come in the Q2 because we want to add as many
as showrooms possible before the festive Diwali. So there are some front-end expenses. And
advertisement, it is related to the local competition activity about -- meaning their noise level,
we all put together.

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So it can vary, wherein, in Q2 as we speak, we think that this is going to come out, because of
the revenue growth, which we have. And expenses about employees surely, there are some front-
ended expenses. As we are very, very simple is that our SSGs are in the range of 20% to 30%,
but our ad spend increased – are in the range of 20%. So that is the gap, which we are seeing
mainly focusing.

Ashish Kanodia: Sure, sure. And the second question is on the MyKalyan front. So has there been any change in
strategy, because when I look at the number of employees under MyKalyan, that has declined
for the first time in the last few quarters. So has there been any change in that?

Ramesh Kalyanaraman: No. So what will happen usually MyKalyan also use a lot of front-ended staff, because we keep
on growing the MyKalyan network, okay? But now it is the franchisees call whether they need
a MyKalyan or local marketing. So we give them two options, whether they want local marketing
to be done in that region, or they want MyKalyan infrastructure. So as we speak now, people
have started coming back because it's all one year, 1.5 year showroom, almost a year done. So
now they are enough of local marketing, and they want us to open MyKalyan. So now you should
ideally see ramp up of MyKalyan and employees also.

Ashish Kanodia: Sure, sure. Sir, lastly, on the procurement center addition, you have added two new procurement
centers. So where are these located, and maybe if you can also just help us understand some of
procurement center facility. What is the kind of capex, which was done for these two centers?

Ramesh Kalyanaraman: Yes. The capex will be very minimal. So it's not about capex. It's more about networking of local
artisans and what you call vendor ecosystem, more than a capex. So majorly, the new offices
were started in regions where we expanded heavily like Bihar and UP.

Ashish Kanodia: Sure, sure. Okay. That’s all from my side. Thank you and all the best.

Moderator: Thank you. The next question is from the line of Karan Mera from Mehta Investments. Please
go ahead.

Karan Mera: Hello sir. Thank you for the opportunity. A couple of questions. Sir, what is the update on
Candere expansion? And how many store openings can we expect before Diwali?

Ramesh Kalyanaraman: Candere this year, we opened 11 in Q1, two in July. We should open 20 more before Diwali. 50
was our target for the year.

Karan Mera: Sorry.

Ramesh Kalyanaraman: 50 is the target for the year.

Karan Mera: Understood. Sir, the non-south share in overall revenue has increased to 49%, whereas, the
studded share inched up to 30%. Where do you see the studded mix going ahead given that now
even consumer behaviour in the southern market is increasing in studded jewelry?

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August 01, 2024

Ramesh Kalyanaraman: So I think this will settle down in this level for some time because the expansion now, the 80
showrooms which we are opening in this financial year are predominantly in non-South tier two,
tier three markets where studded ratio cannot be like tier 1 or Metro. Major showroom network
expansion is happening in that area. So I think mid to late 20s, studded ratio will be the ideal
number for maybe in the next couple of years -- next couple of quarters sorry.

Karan Mera: Understood. That answers my question. Thank you and all the very best.

Moderator: Next question is from the line of Jainam Doshi from Kriis Portfolio. Please go ahead.

Jainam Doshi: Yes. My questions have been answered. Thank you so much.

Moderator: Thank you. The next question is from the line of Pulkit Singhal from Dalmus Capital
Management. Please go ahead.

Pulkit Singhal: Thank you for the opportunity and congrats on the good set of performance. Just the first
question is really on the margins, which seems to have been elusive. I mean looking at the
company for the last two years, we seem to be executing quite well in terms of store expansions
and revenue growth and clearly delivering higher than expected there. But margin expansion
just has been completely elusive.

And I find it surprising your comment that while growing at 30% growth and 12% SSSG, I
mean, which is quite healthy, you're still talking about high competitive intensity kind of quite
contradictory that with such high growth rates, we have to invest so high. So can you talk about
this a bit more? I mean we don't expect with lower revenue growth rates that you would not have
to invest in the business. And it's only during a higher revenue growth that you expect margin
expansion.

Ramesh Kalyanaraman: Yes. So you're right. We are -- meaning somewhere we have missed out on the operating
leverage for advertisements that's why I told you that even Q1, it was a miss. And regarding
competition, I will tell you where in new markets, where we assume that we will not spend too
much because the brand is already aware and the location is the only thing which has to be
communicated.

When you see the local players, regional players or the micro market players there becoming
extremely active because of our showroom launch then we will have to increase the noise level
there. Otherwise, we will lose our market share. And existing local players they increase their
activity around our launch time. So that is where we also put more money so that we don't end
up losing the market share or we don't end up taking out lesser from the competition.

Pulkit Singhal: Okay. So how do you see this play out on -- so I mean, to that extent, you have to keep investing
in the business to just continue the revenue growth momentum, which is a great strategy. But I
think -- is that the thought process that let's keep margins stable and grow revenue growth at a
healthy way?

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Ramesh Kalyanaraman: I think we should take the business after a couple of quarters because with the time, we should
be able to optimize this, especially when it comes to as we speak, Q2, which we see it's going to
happen. And maybe a couple of quarters we'll decide.

Pulkit Singhal: Okay. Secondly, I mean, on this custom--

Ramesh Kalyanaraman: If you ask me, I am still confident of margin expansion for the financial year, that's why I'm
asking for a two quarter wait to decide whether we should forecast numbers.

Pulkit Singhal: So just knowing what your strategy is? I mean either strategy, I mean, long-term so if you're
deciding on market share, that's your call, but it will be good to just know as to how you think
about things. And sir just secondly is on terms of custom duty cut. I mean given the kind of
competition you face, do you think this gives you an edge now, therefore, going ahead? That
where your ability to compete gets a lot higher?

Ramesh Kalyanaraman: Yes two ways we think that customs duty deduction is going to help us. First thing is that if we
push the unorganized players to buy with invoice. If they buy with invoice, then they like to sell
it with invoice. That is one advantage. Second is that, if you look at the last two, three years, the
unorganized segment because they do a cash flow hedge usually, okay? They don't reduce their
volume inventory even if the price goes up.

But we -- because we are not a cash flow hedge, we are a P&L hedged company, we will have
to decrease the volume of inventory, not exactly by the way of gold price increase, if gold
increase, let's say 15%, we would at least bring down the inventory by volume by around 10%,
right?

So this has been the case over the last two, three years. But now if you see, we are on the other
side, wherein they will maintain the same volume at the store. We will be able to increase the
volume at the store, meaning inventory level by volume can be increased without in further
investment, which we think that is going to help to gain more market share for an organized
player. So, it's a two way help secondly.

Pulkit Singhal: So actually, the question like was -- that's interesting to know. The question also was to try to
see if the people are competing with are actually having that custom duty arbitrage, which was
allowing them to be profitable, et cetera. And now that arbitrage goes away from them.

Ramesh Kalyanaraman: So because of this custom duty, high customs duty, it is always an incentive to do -- without
invoice and buying without invoice and stuff for unorganized players, right? That can be an
incentive for the customer also, because they can tell the customer that the price can be lesser or
GST will not be paid and stuff. But now, things are becoming more transparent because the
margins are lesser, no. Hope you understood.

Pulkit Singhal: Yes. Yes. So as they get to do, I mean, if the customer has to invoice, then he doesn't necessarily
need to now deal with them. I mean you might have a deal with a branded player.

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August 01, 2024

Ramesh Kalyanaraman: Yes. Correct. That's right.

Pulkit Singhal: Now understood. Great. Thank you and all the best.

Ramesh Kalyanaraman: Thanks.

Moderator: Thank you. The next question is from the line of Shirish Pardeshi from Centrum Broking. Please
go ahead.

Shirish Pardeshi: Yes. Hi Ramesh. Good evening. I joined the call late. Maybe if you can share your thoughts on
Candere, the thought process. Do you stick to the store guidance and as well for us store?

Ramesh Kalyanaraman: Yes. So, I'm not able to hear you. I don't know whether my line…

Moderator: Mr. Pardeshi, I request you to come a bit close to your handset and ask the question.

Shirish Pardeshi: What I was asking on the Candere, if you have already covered, I just joined the call.

Ramesh Kalyanaraman: Yes. Candere, the number of showrooms, right?

Shirish Pardeshi: Yes. And what is the throughput you're getting now? What is the run rate we are happening,
what's happening now?

Ramesh Kalyanaraman: Okay. Candere, what I will tell you about store expansion wherein we opened 11 showrooms in
Q1 and two in July. We will be opening 20 more before Diwali. And now Candere the throughput
at the store level is not great, because we have not started campaigning around Candere. We are
waiting for Candere to have a minimal number of stores so that we can start our campaigns on
an actual level. So, that is what we think we are going to do for -- meaning that's what our plan
is for Candere.

Shirish Pardeshi: Okay. Thank you, and all the best.

Moderator: Thank you. Ladies and gentlemen, as there are no further questions, we have reached the end of
our question-and-answer session. I would now like to hand the conference over to Mr. Ramesh
Kalyanaraman for closing comments.

Ramesh Kalyanaraman: Thank you very much, everyone, and hope to see you all soon. Thank you.

Moderator: Thank you. On behalf of Kalyan Jewellers Limited, that concludes this conference. Thank you
for joining us. You may now disconnect your lines.

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