Thangamayil at 10% LC, again

Thangamayil Jewellery was one again locked at the 10% lower circuit today, falling to Rs. 5,233.80, down Rs. 581.50 from its previous close of Rs. 5,815.30. The stock opened weak at Rs. 5,451.05 and slipped to the lower circuit, with the exchange also flagging a volume spurt of more than 2.58 times, as investors reacted to cautious Q2 commentary despite strong Q1 FY27 numbers.

Trigger

• Q1 FY27 revenue rose 71.2% YoY to Rs. 2,666.4 crore from Rs. 1,558 crore.
• Revenue declined 6% sequentially from Rs. 2,838 crore in Q4 FY26.
• Net profit stood at Rs. 85 crore, decline of 41% (QoQ)
• Net profit margin stood at 3.2%.
• Retail gold volume grew 9% YoY.
• Diamond volume grew 23% YoY.
• EBITDA margin slipped to 5.4% from 5.6% a year earlier.
• Gross profit margin fell 158 bps sequentially to 9.81% of retail sales from 11.39%.
• Management said there was no visible sales improvement in the first 28 days of Q2 FY27.
• Customers are delaying purchases in expectation of lower gold prices.
• Demand was impacted by West Asia uncertainty, higher gold import duty and rupee depreciation.
• The market is not reacting to the headline Q1 growth but more on the weak guidance.

The biggest concern is the Q2 start. Management’s comment that there has been no visible sales improvement in the first 28 days of the current quarter tells the Street that demand momentum has weakened after Q1. In jewellery retail, this matters because investor confidence depends heavily on whether festive and wedding-led demand is converting into actual sales.

Gold price behaviour is central to the sell-off. Customers are postponing purchases because they expect international gold prices to moderate. When consumers delay buying, footfalls and conversion both suffer, even if long-term wedding and festive demand remains intact.

The increase in gold import duty from 6% to 15%, rupee depreciation and West Asia tensions have also made domestic gold prices more expensive and volatile. For Thangamayil, which has strong exposure to South India and expatriate-linked demand pockets, lower inward remittances and weaker buyer sentiment have added to the pressure.