Shares of Thangamayil Jewellery Ltd plummeted 10% in Wednesday's trading session, hitting a day low of Rs 6,461.40. This significant drop occurred despite the jewellery retailer reporting a robust year-on-year performance for the first quarter of fiscal year 2027 (Q1 FY27).
The company announced an 86.15% surge in consolidated net profit, reaching Rs 85.09 crore for Q1 FY27, up from Rs 45.71 crore in the corresponding period last year. Revenue from operations also saw a substantial increase of 71.16% year-on-year, rising to Rs 2,666.38 crore from Rs 1,557.86 crore.
Sequential Weakness Drives Investor Concern
Despite strong year-on-year growth, the market reacted negatively to the company's quarter-on-quarter (QoQ) performance, which showed considerable weakness. Net profit declined 40.35% from Rs 142.66 crore reported in Q4 FY26, and revenue slipped 6.09% from Rs 2,839.17 crore in the preceding quarter.
Thangamayil Jewellery attributed this sequential downturn to several factors. The company noted that while international gold prices were benign during the quarter, the volume of gold sales was relatively lower. This was primarily due to a steep increase in import duty, which rose from 6% to 15% effective May 13, 2026. Additionally, significant Indian Rupee depreciation led customers to postpone purchases, anticipating future falls in gold prices in US dollar terms.
The company also cited the ongoing uncertainty from the West Asia conflict and a consequential slowdown in expatriate remittances, which impacted virgin gold purchases in its operating regions, contributing to sluggish demand on a QoQ basis.
Same Store Sales and Expert Outlook
The company's Same Store Sales (SSS) growth for the three months ending June 30, 2026, stood at 44.40%, a notable decrease from the 72.31% reported on a QoQ basis.
Despite the recent decline, Thangamayil Jewellery shares have been a multibagger, rallying 249.03% over the past year. Market veteran Arun Kejriwal highlighted the company's inventory turnover as a key to its success, suggesting investors employ a trailing stop loss to protect profits. Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, recommended a 'buy-on-dips' and 'sell-on-rallies' approach for investors with a high-risk appetite.