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In this festive season its time to explore ornament companies.

Thangamayil Jewellery Limited principally deals with four product categories, namely gold, silver, diamonds, and platinum, and has a chain of retail jewellery stores across numerous districts in Tamil Nadu, a state that accounts for 40% of total gold consumption in India.

Current market price on the date of publishing this report- : 1319

Thangamayil Jewellery Ltd


The stock was up over 6% in the previous trading session and it seems we are a bit late to the party. However we believe that adding 1-3% of this stock to the portfolio is not going to make a big difference. That is why we are presenting this stock now. However risk averse investors can wait a while of make provision of adding this stock more when It corrects.


Thangamayil Jewellery is in the business since 1984. It was only in 2000 when the company was incorporated as Thangamayil Jewellery Pvt Ltd. Prior to the formation, the business was carried on by the promoters of the company in the name of Balu Jewellery as a partnership concern

Thangamayil Jewellery Ltd is a well-known jeweller in Madurai, Tamil Nadu. The company deals in gold jewellery, diamond jewellery, and platinum jewellery. They sell a range of ornaments such as gold chains, necklaces, bracelets, bangles, ear studs, nose rings, waist belts, Kasu Malai, finger rings, bracelets, and other goods to suit the customers’ tastes. The company is one of the oldest retailers, with a customer base of over 100,000 people.

The ornaments are produced to order based on the customer’s specifications and are manufactured at the company’s facility in Madurai. Furthermore, the gold jewels are purchased readymade from various dealers in the states of Andhra Pradesh, Gujarat, Kerala, and West Bengal, based on the designs, models, current styles, and market demand for sale at the counters.

The company obtained the Gold Assaying Machine in May 2001 to ensure the quality of gold ornaments using laser technology. They started their private shop for diamonds and other precious stones in Madurai in June 2001. They got a BIS hallmarking licence in August 2001.

All of the company’s jewellery showrooms are located solely in the state of Tamil Nadu. It has 47 branches, all of which are located in Tamil Nadu districts. As of currently, it has no plans to expand to other states.

Business Products

Gold Ornaments



Gift products

What’s Different?

Thangamayil identifies itself as value retailer as its majority of business operations are focused towards Tier 2 / Tier 3 cities and rural areas, where there is relatively less competition from organised jewelers.

Furthermore, Thangamayil significantly expanded its commercial operations in Western / Southern Tamil Nadu following its IPO, from 7 stores in FY10 to 31 stores in FY14. Due to increased regulatory involvement and a deteriorating macroeconomic climate, shop openings were delayed until FY19. Before resuming store expansion, which will result in 38 large format stores in FY22.

Company set up 13 small format stores (150-200 sq. ft) with name “TMJL Plus” over the past 3 years, with prime intention of acting as (A) collection center for Schemes; (B) displaying range of silver / MRP based jewellery; and (C) displaying catalogue with respect to range of items available in large format stores

At last company believes focusing on improving asset turns which has led to more emphasis on selling Gold jewellery (90% of sales), which although low margin, has been fast moving in nature.

TMJL has a very balanced approach in gold procurement using the mix of low cost and stable sourcing options, given historically there has been lot of flip- flop’s as far regulation are concerned

TMJL again has diversified sales mix, with decent amount of sales coming from old gold exchange programme, monthly collection schemes and spot purchases. 


TMJL had embraced the contemporary e-commerce movement, earning a foothold in what is now considered a modern trend for retail operations around the world. A fast, safe, and easily accessible web portal now acts as a doorway to the thousands of products available in their retail stores, translating the excellent in-store customer service into an elegant and visually appealing online user experience. TMJL has adapted to the growth of e-commerce by developing and displaying massive technical achievements, allowing clients to purchase jewellery 24 hours a day, seven days a week from the comforts of their own homes.


For the year ended March 2022

  • Net Sales stood at Rs 2193 crore in March 2022 down 20% from Rs. 1819 crore in March 2021.
  • Quarterly Net Profit stood at Rs. 39 crore in March 2022 down 55% from Rs. 87 crore in March 2021.
  • EBITDA stood at Rs. 86 crore in March 2022 down 70% from Rs. 147 crore in March 2021.
  • Thangamayil EPS has decreased to Rs. 28 in March 2022 from Rs. 63 in March 2021.
  • Apart from the gold price escalation contributing to value terms in turnover, the volume of gold ornaments sold also increased from 3,433 kgs to 4,054 kgs registering an increase of 15%. 
  • Top line growth increased over a five-year period at a compounded annual growth rate (CAGR) of 12% 
  • The other than gold ornaments products portfolio registered a sales growth of 41% from Rs 16,536 lakhs in 20- 21 to Rs 23,258 lakhs in 21-22. 
  • The overall stock turnover ratio also increased from 2.80 times to 3.13 times due to continuous monitoring on the inventory with the help of technology support. 
  • The secured working capital outstanding borrowing of the company as at 31st March 2022 stood at Rs 25,377 lakhs as against Rs 20,690 lakhs of the previous year. The aggregate working capital facilities from member’s bankers are at Rs  33,600 lakhs. 

For Q1 FY23

  • Net Sales stood at Rs 826.12 crore in June 2022 up 230.82% from Rs. 249.72 crore in June 2021.
  • Quarterly Net Profit stood at Rs. 18.98 crore in June 2022 up 354.45% from Rs. 7.46 crore in June 2021.
  • EBITDA stood at Rs. 36.14 crore in June 2022 up 1528.46% from Rs. 2.53 crore in June 2021.
  • Thangamayil EPS has increased to Rs. 13.84 in June 2022 from Rs. 5.44 in June 2021.


Company has earmarked up to Rs 1,000 lakhs for capex spends and proposed an incremental working capital outlay of Rs 12,000 lakhs to get the benefits out of existing successful outlets. As per approved plan of implementation by board at least two or three outlets will be upgraded in every quarter in 22-23. The funds for the same will be generated in the form of cash accretions, customer advances, fixed deposits from public and use of unutilised working capital limits.

Managements comments and key steps taken by the company

The company after a period of consolidation opened four retail outlets in this year (2022) namely, Nagercoil on 15th October 2021, Surandai on 27th October, Kalavasal Madurai on 14th November 2021 and Pudukottai on 11th February 2022. The company opened its 52nd branch at Trichy, on its own premises on 14th April 2022.

Going forward management expects to maintain gross profit margin around the current level even on elevated top line growth. Additionally it plans to Improve operating leverage going forward and spend optimum amount on “Brand spend” as well as efficient management with regards to converting it into revenue accretion by extended operations.

TMJL is converging from promoter run organization to professionally run organization. It has beefed up its professional team, so that the company is in position to handle enhanced scale of operations

Sectorial Outlook

Diamond and platinum jewellery has become a fashion statement among India’s rich people to set them apart from others who wear traditional jewellery. India is the world’s largest gold and silver consumer. India is also one of the world’s major silver importers and the world’s largest diamond cutting and polishing center. In India, there is a growing demand for diamond and platinum jewellery due to increased awareness of new exquisite designs and branded items 

Demand for gold jewellery has remained steady at 700-800 tonnes over CY2017-2021, as people buy gold to mark new beginnings, birth, festivals and weddings. Majority of gold demand in India is linked to weddings, as buying gold jewellery for an Indian bride is based on the concept of Streedhan. 

South India constitutes c40% of gold demand (Source: WGC), with a majority of the jewelry market being captured via value conscious customers / economy products .

Rural population prefers to invest in gold post their harvest season, since it is highly liquid and lack of trust towards financial products. Demand trends for jewellery remain skewed with specific months, it being driven via marriage / festival season and crop harvest.

Drivers of Demand

  • Increase in share of Urbanization to 35% now has resulted in shift in demand to more organized brands that provide authenticity, purity and innovative designs 
  • Increasing share of women’s workforce, who have more say in purchase decisions rather than relying on family. 
  • Higher disposable income – which gives boost to discretionary consumption.
  • Mandatory implementation of Hallmarking to put unorganized players in spot, as they will have to increase making charges, thereby reducing competitive edge of under-karatage


Thangamayil Jewellery Limited, which is primarily engaged in the business of oraments and precious metals, has been operating a chain of retail stores mostly serving tier 2 and tier 3 metropolitan populations. The company believes in opening outlets in areas with low competition from organised players. Furthermore, management has been conservative in expanding the outlets while also laying out a carefully constructed plan to transition the company from a promoter-driven company to a professional-driven one. This is a significant deal in and of itself. People have been excitedly anticipating the current festive season shopping season and the next wedding season after two years of restricted ceremonies. And it has also been seen that people have been purchasing for anything and everything that they desire. Thus, driven by consumption, this company has the potential to generate a significant amount of revenue in the near future if everything goes as planned.

Because the stock price has risen significantly in the near term, investors are cautioned to be careful before getting in. Significant exposure to the company or a specific sector is not recommended. We would add this company with a 1% exposure to the overall portfolio. This is more of a diversity hedge than a capital appreciation wager.

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