Whalesbook
Thangamayil Jewellery reported a 76% revenue jump to Rs 279 crore during Akshaya Tritiya, driven by 15% volume growth. While a shift to old gold exchanges is helping manage import costs and margin pressure, investors are closely watching the stock's premium valuation and competitive expansion in the Chennai market.
What Happened
Thangamayil Jewellery Ltd (TMJL) has reported a strong performance during the recent Akshaya Tritiya festival, a key event for gold retailers in India. The company announced revenues of Rs 279 crore, marking a significant 76% increase compared to the same period last year. This growth was supported by a 15% rise in sales volume, indicating that consumer demand remained resilient despite the rising price of gold and a recent increase in customs duty on the yellow metal implemented in mid-May 2026.
The Old Gold Strategy
One of the most important aspects of the company’s current business model is its strategic pivot toward old gold exchanges. The share of old gold in the company's total revenue has climbed significantly, now accounting for 50% of its intake. This is a crucial shift for investors to understand. By encouraging customers to exchange their old gold for new items, the company reduces its need to purchase fresh, imported gold. This helps the business manage its capital more efficiently and provides a buffer against the higher customs duties that can pressure profit margins for jewellers.
Network Expansion Plans
Thangamayil Jewellery is aggressively expanding its physical presence. The company plans to open 9 new showrooms in the current fiscal year, which will grow its footprint beyond its existing 66 stores. A core focus of this expansion is the Chennai market. Since its entry into the region in February 2025, the company has successfully scaled its presence to 8 stores. These stores have become a vital part of the business, currently contributing approximately 20% to the total revenue.
How Investors May Read This
While the growth in revenue and volume is a positive signal, investors are balancing this against several factors. The jewellery sector is currently facing pressure from high raw material prices and intense competition from both regional and national players. While TMJL expects its focus on non-gold products and operating efficiency—where higher sales help cover fixed costs—to keep margins stable, these assumptions will be tested in the coming quarters.
Furthermore, the stock is currently trading at a price-to-earnings (P/E) ratio of 27 times its FY28 earnings projections. This valuation reflects a premium compared to its historical average and when compared to some regional peers like PN Gadgil Jewellers. A higher valuation often implies that the market has high expectations for future growth, which leaves less room for error if the company fails to meet these projections.
What Investors Should Track
Going forward, the key monitorable for investors will be whether the company can maintain these margins in a high-price gold environment. The success of the 9 new store launches, particularly in the competitive Chennai region, will also be critical. Investors may also want to watch management commentary regarding the impact of competitive pricing on profit margins and whether the old gold exchange strategy continues to provide the expected relief from import-related cost pressures.