Shares of Thangamayil Jewellery saw a sharp downturn, falling almost 19% over two consecutive trading sessions. On Thursday, the stock plummeted an additional 10% to reach a low of Rs 5,815.30, bringing its two-day cumulative loss to 18.99%.
Strong Q1 FY27 Performance Year-on-Year
The recent dip in share price comes despite the jewellery retailer's robust year-on-year financial performance for the June quarter (Q1 FY27). Thangamayil Jewellery reported a consolidated net profit of Rs 85.09 crore, marking an impressive 86.15% increase compared to Rs 45.71 crore in the corresponding quarter of the previous fiscal year. Revenue from operations also surged by 71.16% year-on-year, reaching Rs 2,666.38 crore from Rs 1,557.86 crore.
Sequential Decline Drives Investor Concern
Despite the strong annual growth, the company's performance on a quarter-on-quarter (QoQ) basis showed significant weakness, which appears to be a primary driver of the stock's recent decline. Net profit for Q1 FY27 fell by 40.35% from Rs 142.66 crore reported in Q4 FY26. Similarly, revenue slipped by 6.09% from Rs 2,839.17 crore in the prior quarter.
Factors Contributing to Sequential Weakness
Thangamayil Jewellery attributed the sequential slowdown to several critical factors:
- Import Duty Hike: A substantial increase in gold import duty from 6% to 15%, effective May 13, 2026, significantly impacted sales volumes in the gold segment.
- Currency Depreciation: Significant depreciation of the Indian Rupee (INR) against the US dollar also contributed to customers postponing purchases, anticipating future drops in gold prices internationally.
- Geopolitical Uncertainty: The ongoing conflict in West Asia and its consequential slowdown in expatriate remittances in key operating regions further dampened customer demand.
The company noted that no visible improvement in sales had been observed in the first 28 days of the second quarter of FY27, citing continued uncertainty from the conflict and customer expectations of moderate international gold price falls. However, Thangamayil Jewellery expressed optimism that this postponed demand would return as the geopolitical and price situations improve, anticipating a recovery in the second half of FY27.
For the three months ending June 30, 2026, the company's Same Store Sales (SSS) growth stood at 44.40%, a decline from the 72.31% recorded on a QoQ basis. Despite the recent sharp decline, Thangamayil Jewellery's stock has been a multibagger, rallying over 203% in the past year.