Shares of Thangamayil Jewellery experienced a significant downturn, plummeting over 27% in just three trading sessions, despite the company reporting an impressive 86% year-on-year increase in its consolidated net profit for the first quarter of fiscal year 2027. On Friday, the stock fell another 10%, closing at Rs 5,233.80.
Strong Annual Growth, Sequential Weakness
For the June quarter (Q1 FY27), Thangamayil Jewellery announced a consolidated net profit of Rs 85.09 crore, a substantial rise from Rs 45.71 crore recorded in the same period last year. Revenue from operations also saw robust growth, surging 71.16% year-on-year to Rs 2,666.38 crore, up from Rs 1,557.86 crore in the previous year's corresponding quarter.
However, a closer look at the quarter-on-quarter (QoQ) performance reveals a different picture. Net profit declined by 40.35% compared to Rs 142.66 crore in Q4 FY26, and revenue slipped 6.09% from Rs 2,839.17 crore reported in the preceding quarter.
Factors Behind the Decline
The company attributed the sequential weakness to several critical factors. Despite benign international gold prices during the quarter, the volume of gold sales was relatively lower. This was primarily due to a steep increase in gold import duty, which rose from 6% to 15% effective May 13, 2026. Additionally, significant depreciation of the Indian Rupee prompted customers to delay purchases, anticipating future drops in gold prices in US dollar terms.
"The uncertainty caused by the West Asia war and the consequential slowdown in virgin purchases of gold by expatriates' remittances inwardly in the areas we operate also mainly contributed to this sluggish offtake on a QoQ basis," Thangamayil Jewellery stated.
The company also noted that Same Store Sales (SSS) growth for the three months ending June 30, 2026, stood at 44.40%, a decline from the 72.31% recorded on a QoQ basis.
Outlook and Management Expectations
Looking ahead, Thangamayil Jewellery reported no visible improvement in sales during the first 28 days of Q2 FY27, citing continued uncertainty from the ongoing conflict in West Asia and customer expectations of moderate international gold price falls. Management expressed belief that the postponed demand would eventually return once the geopolitical situation and price stability improve, hoping for a recovery in the second half of FY27.
Despite the recent sharp decline, Thangamayil Jewellery has been a strong performer over the longer term, achieving multibagger status with a rally of 176.31% over the past year.