Thangamayil Jewellery sheds 19% in two days on cautious Q2 commentary

Thangamayil Jewellery extended its losses for a second straight session, falling 10% to Rs 5,807 on Thursday after plunging 10% in the previous session, taking its two-day decline to 18.99%.

The sell-off followed the company's Q1 FY27 results announced on 29 July 2026. Management warned that demand remained weak in the first 28 days of Q2 FY27 as customers deferred gold purchases amid geopolitical uncertainty and expectations of lower international gold prices.

Despite the recent correction, the stock remains up 46.66% over the past three months and 203.23% over the past one year.

The company's profit after tax jumped 86.2% year-on-year to Rs 85.1 crore in Q1 FY27 from Rs 45.7 crore in Q1 FY26. On a sequential basis, profit declined 40.4% from Rs 142.7 crore in Q4 FY26.

Revenue from operations rose 71.2% YoY to Rs 2,662.5 crore in Q1 FY27 from Rs 1,555.3 crore in the corresponding quarter last year. Revenue declined 6.2% QoQ from Rs 2,838.2 crore in Q4 FY26.

Gross profit increased 48.1% YoY to Rs 247 crore in Q1 FY27 from Rs 167 crore in Q1 FY26. Gross margin, as a percentage of retail sales, declined to 9.81% from 11.10% a year ago and 11.39% in Q4 FY26.

Profit before tax stood at Rs 115.5 crore in Q1 FY27, down 36.6% QoQ and up 77.3% YoY.

Reported EBITDA rose 66.7% YoY to Rs 145 crore in Q1 FY27 from Rs 87 crore in Q1 FY26. EBITDA margin as a percentage of retail sales was 5.76% compared with 5.78% a year ago.

Employee benefits expense increased 25.1% YoY to Rs 40.5 crore. Interest and finance costs rose 17.8% YoY to Rs 17.7 crore, while depreciation and amortisation expense increased 68.2% YoY to Rs 11.5 crore. Advertisement and publicity expenses declined 2.3% YoY to Rs 23.9 crore.

The company reported a total tax expense of Rs 30.4 crore in Q1 FY27, up 56.5% YoY from Rs 19.4 crore in Q1 FY26.

Retail sales grew 67% YoY to Rs 2,517 crore, while wholesale sales surged 190% to Rs 145 crore. Gold jewellery sales increased 65% to Rs 2,273 crore, while non-gold sales, comprising silver, diamonds and other products, rose 88% to Rs 244 crore. The contribution of non-gold products to retail sales improved to 9.69% from 8.64% a year ago.

Gold ornament volumes increased 9% YoY to 1,620 kg, while diamond volumes rose 23% to 4,987 carats. Silver product volumes declined 6% to 5,727 kg. Inventory turnover improved to 3.20 times from 2.92 times, while interest coverage strengthened to 8.18 times from 5.79 times.

Management said gold volumes softened sequentially despite relatively benign international gold prices. The company attributed the slowdown to the increase in import duty to 15% from 6% effective 13 May 2026, rupee depreciation and uncertainty arising from the West Asia conflict, which prompted customers to defer purchases in anticipation of lower gold prices.

The company said exchange gold schemes, DIGI GOLD and customer advances accounted for 53% of gold revenue, up from 47% a year ago, weighing on gross margins. It added that realised inventory gains of Rs 31 crore contributed around 13% of the reported gross profit of Rs 247 crore during the quarter.

Same-store sales growth stood at 44.4% in Q1 FY27. The company opened two stores in Chennai during June 2026 and plans to add four more in the Chennai region by September 2026.

Gold hedging stood at 96% and silver hedging at 43% as of 30 June 2026. Overall liquidity stood at Rs 389 crore, including eligible undrawn bank facilities.

Management said no visible improvement in sales was seen during the first 28 days of Q2 FY27. It expects deferred demand to return once geopolitical tensions ease and gold prices stabilise, and remains optimistic about a recovery in the second half of FY27.

Thangamayil Jewellery is engaged in the manufacturing and retailing of gold ornaments, silver articles, and diamond products. The company operates through a robust network of 66 retail outlets spread across Tamil Nadu.

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