The Welsh pack gave as good as they got against the reigning World Under 20 champions France in Vannes last weekend before finally going down 32-10. Meanwhile, the Italians opened up with a 32-22 triumph in Scotland to make it three wins in a row in the Six Nations.
That run began with their 18-7 victory over Wales last season and they backed that up with a 45-31 home triumph over the Scots. Now they are looking to make it back-to-back wins over Wales for the first time.
"We know Italy are going to challenge us at the scrum and with their driving line-out. They scored with a drive against Scotland and we know that's going to be a huge threat of theirs that we are going to have to match," said Kelly.
"The players have genuinely improved day on the day over the past few weeks and we can see the difference in them. If they carry that on it's going to be exciting to see where we end up as a team.
"They will be self-motivated for this weekend. They will want to put some of the wrongs of the game in France right in Italy and it's another great opportunity for them.
"There is the potential for a lot of these players to kick on and play regional rugby and we are excited about giving them a platform to showcase their talent."
Lock Jac Price is sweating on a citing heading this week, while team selection is subject to the normal injury assessment. But there were enough encouraging signs for the Welsh coaches against a very experienced French side in round one.
"We were disappointed because there were some key moments in the game when, if we'd done things slightly differently, we could have really pushed them. That's what rugby is all about at this level," added Kelly.
"From an effort perspective, the boys couldn't have given any more and we are really proud of them. The front five couldn't have worked any harder for each other and they put in some big hits on some big men - they really fronted up.
"Our scrum was pretty solid and we took away the threat of their drive. There are one or two errors we need to tidy up on, but there were a lot of positives there."