Kalyan Jewellers vs PN Gadgil
Kalyan Jewellers vs PN Gadgil – India’s jewellery market is home to several iconic brands, with Kalyan Jewellers and PN Gadgil being two of the most prominent names. Both companies have strong brand equity, a loyal customer base, and significant market presence. But when it comes to investing, which stock stands out? This article compares Kalyan Jewellers and PN Gadgil across financial metrics, market performance, and key business fundamentals.
Company Overview
Kalyan Jewellers
Founded in 1993, Kalyan Jewellers is one of India’s largest jewellery retailers, known for its vast showroom network and diverse product offerings. The company operates over 150 showrooms across India and the Middle East, targeting a broad customer base with traditional and contemporary jewellery.
PN Gadgil
PN Gadgil, also known as PNG Jewellers, has a rich history spanning over 190 years. The company has built a strong reputation for quality and craftsmanship, primarily catering to the Indian market. While its store network is smaller compared to Kalyan Jewellers, PN Gadgil has a loyal customer base and strong financials.
Stock Market Performance
Both Kalyan Jewellers and PN Gadgil have delivered strong performances in the stock market, but they cater to different investment profiles.
- Market Cap: Kalyan Jewellers leads with ₹44,527 Cr, whereas PN Gadgil has a market cap of ₹7,307 Cr.
- Stock Price: Kalyan Jewellers trades at ₹432, while PN Gadgil is at ₹538.
- 52-Week High/Low: Kalyan Jewellers’ stock has ranged between ₹795 and ₹336, whereas PN Gadgil has fluctuated between ₹848 and ₹495.
Valuation and Growth Metrics
| Metric | Kalyan Jewellers | PN Gadgil |
|---|---|---|
| Stock P/E | 67.0 | 35.3 |
| Industry P/E | 34.4 | 34.4 |
| Book Value (₹) | 42.3 | 105 |
| Price to Book Value | 10.2 | 5.14 |
| Graham Number | ₹78.3 | ₹196 |
| Intrinsic Value | ₹120 | ₹456 |
| PEG Ratio | 0.38 | 0.80 |
From a valuation standpoint, PN Gadgil appears more attractively priced, with a lower P/E ratio and a reasonable price-to-book value compared to Kalyan Jewellers. However, Kalyan’s PEG ratio of 0.38 suggests strong growth potential relative to its price.
Profitability and Returns
| Metric | Kalyan Jewellers | PN Gadgil |
|---|---|---|
| ROCE (Return on Capital Employed) | 14.0% | 30.8% |
| ROE (Return on Equity) | 15.2% | 32.4% |
| Return on Assets | 5.06% | 12.3% |
PN Gadgil outperforms Kalyan Jewellers in all return metrics, reflecting stronger profitability and efficient capital utilization. A higher ROCE and ROE indicate that PN Gadgil is generating better returns on its investments.
Debt and Financial Strength
| Metric | Kalyan Jewellers | PN Gadgil |
|---|---|---|
| Debt to Equity | 1.04 | 0.16 |
| Total Debt | ₹4,550 Cr | ₹233 Cr |
| Pledged Percentage | 19.3% | 0.00% |
| Dividend Yield | 0.28% | 0.00% |
Kalyan Jewellers carries significantly higher debt than PN Gadgil, with a debt-to-equity ratio of 1.04 compared to just 0.16 for PNG. This indicates a higher financial risk for Kalyan. Moreover, PN Gadgil has zero pledged shares, making it a more stable investment.
Cash Flow and Liquidity
| Metric | Kalyan Jewellers | PN Gadgil |
|---|---|---|
| Free Cash Flow (Last 3 Years) | ₹2,061 Cr | ₹242 Cr |
| Free Cash Flow (Last 5 Years) | ₹2,855 Cr | ₹364 Cr |
| Current Free Cash Flow | ₹1,061 Cr | ₹106 Cr |
Kalyan Jewellers has a much stronger free cash flow position compared to PN Gadgil, which suggests better financial flexibility.
Which Stock is a Better Investment?
Why Invest in Kalyan Jewellers?
- Larger market cap and broader geographical presence.
- Strong free cash flow generation.
- Higher growth potential (low PEG ratio).
Why Invest in PN Gadgil?
- Higher profitability and return metrics.
- Lower debt and zero pledged shares, making it a safer bet.
- More attractive valuation (lower P/E and price-to-book ratio).
Final Verdict
For growth-oriented investors, Kalyan Jewellers offers strong revenue expansion, a larger market share, and better liquidity. However, PN Gadgil appears financially stronger, with higher profitability, lower debt, and a better valuation.
Ultimately, your investment choice depends on risk tolerance—PN Gadgil is a safer, value-oriented stock, while Kalyan Jewellers offers higher growth potential but with more risk.
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Disclaimer: This blog post is for informational purposes only and should not be considered financial advice. Investors should conduct thorough research and consult with a qualified financial advisor before making any investment decisions.