Driven by a strong rally in gold prices, higher price realisation and growth in sales across all product categories, this small-cap jewellery stock posted stellar results for the first quarter of the financial year 2023-24.
The shares of Thangamayil Jewellery appreciated to the tune of 16 percent on Tuesday’s early trades to reach an intraday high of ₹ 1,164.00 apiece on the National Stock Exchange (NSE).
According to an exchange filing, the company reported its highest-ever quarterly revenue of ₹ 958.87 crores in the April to June quarter (Q1FY24), up 16.07 percent as compared to ₹ 958.87 crores in the corresponding quarter of the previous year (Q1FY23). Its profit climbed a whopping 208.80 percent to ₹ 58.61 crores in Q1FY24, as compared to ₹ 18.98 crores in Q1FY23.
“Apart from the operating profits, the company had the benefits of better realisation on gold price movement up to ₹32 crore,” the Madurai headquartered company said in its earnings release.
Thangamayil Jewellery Limited operates a chain of retail jewellery stores across several districts in Tamil Nadu, a state that has the largest share (40 percent) of India’s total gold consumption. It primarily deals with four product lines, i.e., Gold, Silver, Diamonds and Platinum; the sale of gold being a predominant source of its income.
With a market capitalization of ₹ 2,753 crores, Thangamayil Jewellery is a small-cap company. It has an ideal return on equity of 22.37 percent. Its shares were trading at a price-to-earnings ratio (P/E) of 23.06, which is lower than the industry P/E of 28.02, indicating that the stock might be undervalued as compared to its peers.
The company’s promoters hold a 67.16 percent stake in it, followed by retail investors with 21.18 percent, mutual funds with 11.46 percent and foreign institutions with 0.20 percent.
Written by Simran Bafna
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