Why Thangamayil Jewellery Share Price is Rising
Thangamayil Jewellery, one of the top jewellery companies in India by growth, has seen a spectacular rise in the past two months. Shares of the company have witnessed a bullish breakout and are trading at their all-time high levels. Let’s find out why.
Last week, Thangamayil Jewellery posted its highest ever quarterly revenue of ₹9.6 billion (bn) for the quarter ended June 2023. This was on the back of higher gold prices. Rising prices of the safe haven metal resulted in higher price realisation while the company also registered strong growth in sales across product categories.
As a result, net profit shot up more than three times to ₹590 million (m) compared to ₹190 m in the same period last year. In an exchange filing, the company said that it enjoyed benefits of better realisation on gold price movement up to ₹320 m. The company posted these record quarterly numbers on top of a strong FY23 performance where profit doubled to ₹1.1 bn while revenue grew more than 50% to ₹31.5 bn.
In the last five years, the company's revenue and profits have grown at a double digit CAGR driven by an uptick in gold prices and a revival of demand. In the quarter under review, Thangamayil opened a retail outlet in Kumbakonam in Tamil Nadu, taking the total number of retail outlets to 54. The company is actively expanding retail presence in Tamil Nadu, a state with the largest share of India's gold consumption.
It commands a strong market presence in the Tier II and Tier III cities of Tamil Nadu. It also has a dominant position in the Madurai micro market. Opening a store requires heavy investment and then too, there’s no guarantee the company can turn that outlet profitable soon.
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