Thangamayil Jewellery Hits 20% Upper Circuit After ₹16 Cr Sales on Chennai Showroom’s Opening Day
The stock of Thangamayil Jewellery Ltd soared to its 20% upper circuit on Tuesday after the company reported a massive ₹16 crore in sales on the first day of operations at its newly opened showroom in Chennai. The surge in demand, along with increasing footfalls, has boosted investor confidence, leading to a sharp rally in the stock price.
Stock Performance: A Strong Surge
Thangamayil Jewellery Ltd, a small-cap company with a market capitalization of ₹5,789.93 crore, witnessed a significant jump in its stock price. The stock hit ₹1,861.85 per share, marking a 20% upper circuit compared to its previous closing of ₹1,551.55 per share.
The sharp increase reflects the strong demand for the company’s products and its expansion strategy, which is expected to further fuel growth in the coming months.
Company Overview: Expanding Footprint in Tamil Nadu
Thangamayil Jewellery Ltd specializes in the manufacture and sale of gold, diamond, and silver jewellery. With an established manufacturing unit in Madurai, the company operates through a vast network of 54 showrooms, covering an area of 78,000 square feet across Tamil Nadu.
Currently, its retail presence is concentrated in southern and western districts such as Madurai, Sivakasi, Ramnad, and Tuticorin. However, with its latest expansion into Chennai, the company aims to strengthen its foothold in the urban jewellery market.
Strong Financial Performance: Impressive Growth Trends
The company has demonstrated remarkable financial performance in the recent quarter:
- Revenue Growth: Thangamayil Jewellery recorded a 26% YoY increase in sales, rising from ₹895 crore to ₹1,131 crore. However, on a quarterly basis, revenue saw a slight 4% dip from ₹1,178 crore in Q2 FY25.
- Profit Growth: Net profit jumped 72% YoY, from ₹28 crore to ₹48 crore. Importantly, the company turned profitable after reporting a ₹17 crore loss in Q2 FY25.
This strong turnaround in profitability highlights the company’s robust demand and effective cost management.
Store Expansion: Strengthening Market Position
Despite its strong presence in Tamil Nadu, Thangamayil has a relatively limited presence in Chennai. To bridge this gap, the company plans to open three additional stores in the city by Q4 FY25.
Additionally, to finance its aggressive expansion strategy, the company has approved a rights issue to raise ₹510 crore by March. These funds will be primarily used to scale operations and strengthen its retail network.
Management Commentary: Positive Outlook
SM Lakshmanan, Vice President of Finance and Accounts at Thangamayil, expressed confidence in the company’s growth trajectory. He stated that the company expects to close the year with over 24% revenue growth.
Additionally, he assured investors that EBITDA margins would remain above 6%, reflecting the company’s strong operational efficiency and pricing power in the jewellery industry.
Industry Outlook: A Booming Sector
The Indian gems and jewellery industry is witnessing strong momentum, driven by the rising dominance of large retailers and established brands.
- The industry is expected to reach USD 100 billion by 2027.
- Greater penetration of organized players is offering consumers a wider range of products and designs.
- Government policies, such as relaxed gold import restrictions, are further supporting growth.
- Increased availability of low-cost gold metal loans is helping businesses manage their working capital efficiently.
Given these favorable industry trends, Thangamayil Jewellery is well-positioned to capitalize on the booming demand for gold and diamond jewellery in India.
Key Financial Ratios & Market Data
Below is a snapshot of Thangamayil Jewellery’s key financial metrics:
| Metric | Value |
|---|---|
| Market Cap | ₹5,791 Cr. |
| Current Price | ₹1,862 |
| 52-Week High/Low | ₹2,567 / ₹1,104 |
| Stock P/E | 50.1 |
| Book Value | ₹166 |
| Dividend Yield | 0.54% |
| ROCE (Return on Capital Employed) | 20.3% |
| ROE (Return on Equity) | 28.0% |
| Face Value | ₹10.0 |
| Promoter Holding | 61.3% |
| Debt-to-Equity Ratio | 1.55 |
| Price-to-Earnings Ratio | 50.1 |
| Pledged Percentage | 1.87% |
| QoQ Profit Growth | 376% |
| Quarterly Profit Variation | 72.1% |
| Industry P/E | 33.4 |
| Graham Number | ₹372 |
| Intrinsic Value | ₹673 |
| RSI (Relative Strength Index) | 55.7 |
| EPS (Earnings Per Share) | ₹37.2 |
| No. of Equity Shares | 3.11 Cr. |
| PEG Ratio | 1.55 |
| 200 DMA (Days Moving Average) | ₹1,784 |
| Free Cash Flow (3-Year) | ₹177 Cr. |
| Free Cash Flow (Current Year) | ₹293 Cr. |
| Total Debt | ₹800 Cr. |
Final Thoughts: A Stock to Watch?
Thangamayil Jewellery’s strong financial performance, aggressive expansion strategy, and improving profitability make it an attractive bet in the jewellery sector.
With three more stores planned in Chennai and a fundraising initiative to support expansion, the company is well-positioned for long-term growth. Additionally, the robust demand for gold jewellery and favorable industry trends further strengthen its outlook.
As the company continues to expand, investors will closely watch its ability to sustain revenue growth and improve margins. With positive investor sentiment driving the stock to an upper circuit, Thangamayil Jewellery remains a stock to watch in the coming months.
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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.