20% Upper Circuit: Jewellery stock jumps after ₹16 Cr sales on opening day of Chennai showroom

The shares of this small-cap stock, operating a chain of retail jewellery stores across the state of Tamil Nadu hit upper circuit in Tuesday’s trading session after receiving 7,250 footfall and sales of Rs 16 crore on the opening day of their new showroom in Chennai.

Stock Performance

With a market capitalization of Rs 5,789.93 crore, Thangamayil Jewellery Ltd hit an upper circuit of 20 percent in Tuesday’s trading session at Rs 1861.85 per share compared to its previous closing price of Rs 1551.55 per share.

Company Overview

Thangamayil Jewellery Ltd, engaged in the business of manufacture and sale of gold, diamond and silver articles. The company has an established manufacturing unit in Madurai and an operating area of around 78,000 square feet across 54 showrooms. The company has branches in southern and western districts including Madurai, Sivakasi, Ramnad and Tuticorin among many others. 

Financial Performance

In the latest quarter, Thangamayil Jewellery reported a 26 percent YoY increase in total sales from Rs 895 crore to Rs 1,131 crore. On a quarterly basis however, there was a 4 percent decrease from Rs 1,178 crore in Q2 FY25. 

The net profits increased remarkably by 72 percent YoY from Rs 28 crore to Rs 48 crore. On a quarterly basis, the loss of Rs 17 crore in Q2 FY25 was converted into profit in the subsequent quarter. 

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Store Expansion

Currently, the stores are largely in the southern and western districts of Tamil Nadu and have limited presence in Chennai. The company is trying to combat this by opening 3 more stores in the city in the upcoming quarter, Q4 FY25.

Further, Thangamayil will raise Rs 510 crore through the approved rights issue by the end of March, with the proceeds going to the company’s store expansion.

Management Commentary

SM Lakshmanan, Vice President of Finance and Accounts, stated that the company expects to close the current year with over 24 percent revenue growth. Thangamayil’s performance by the end of FY25 is anticipated to surpass its 9MFY25 results. Further, they are confident of maintaining EBITDA margin above 6 percent levels going forward. 

Industry Outlook

India’s gems and jewellery sector will be driven by large retailers and established brands, boosting the organised market. Greater penetration of organised players offers diverse products and designs, while relaxed gold import restrictions further support the industry. 

Improved availability, low-cost gold metal loans, and stable gold prices are expected to aid volume growth in the short to medium term. The industry itself is projected to reach USD 100 billion by 2027.

Written by Shwetha Sairam

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