Motilal Oswal in a recent report said that Kalyan's hyperlocal strategy continues to drive its success in new markets, with fast learning and better preparation for competition. The company is confident in its expansion plans, targeting 80 new stores annually through its FOCO model, enhancing store-level execution and franchise participation.

Currently, the company operates in 23 states, having 76 showrooms in South India, 48 in North and Central India, 23 in West India, 16 outlets in East India, and 33 in the Middle East.

“Leveraging local consumer preferences, KALYAN has built strong entry barriers and deep community connections. Its asset-light approach aims to reduce leverage, with plans for 80 new FOCO stores in India and six internationally by FY25. Effective localised marketing and innovations drive customer engagement, while strong financials and debt reduction efforts underpin growth,” it said in a report released in July this year.

In FY24, Kalyan repaid ₹400 crore in non-GML loans in India, reducing overall working capital loans by ₹260 crore. The company plans to allocate 40-50% of profits to debt repayment and shareholder payouts, and declared a dividend with a payout exceeding 20% for FY24, double that of FY23. Additionally, it reduced non-GML loans by ₹430 crore and also secured an additional GML limit of ₹170 crore, thereby scaling down its overall working capital.

“Management aims to reduce its total debt by ₹700 crore over the next couple years. It targets to reduce its debt by ₹300 crore in FY25,” the brokerage said in the report.

Kalyan has devised a strategy to operate through both company owned, company operated (COCO) and franchise owned, company operated (FOCO) models in Indian and international markets. This approach aims to adopt an asset-light model, reducing leverage on its balance sheet.

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