The brokerage views Thangamayil Jewellery as the DMart of Tamil Nadu’s jewellery retail sector, applying principles of “high inventory turns and reasonable margins,” in contrast to other listed jewellery players who focus on “high operating margins and low inventory turns” to generate respectable return ratios.

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HDFC Securities Institutional Equities

We believe Thangamayil Jewellery Ltd., a leading jewellery player in Tamil Nadu, is set to achieve 28%, 34%, and 40% revenue, Ebitda, and PAT CAGR, respectively, over FY24-27.

This growth will be driven by the benefits of formalisation, accelerated store expansion, its value-for-money offerings, and the easy availability of capital at competitive interest rates. We view Thangamayil Jewellery as the DMart of Tamil Nadu’s jewellery retail sector, applying principles of “high inventory turns and reasonable margins,” in contrast to other listed jewellery players who focus on “high operating margins and low inventory turns” to generate respectable return ratios.

We continue to maintain a high-conviction Buy and a target price of Rs 2,400 (25 times FY27 EPS, representing a 25% premium to its five-year one-year forward average PE).

Key risk to our call in near term:

We can see EPS cuts of 6-7% for FY26-27, if interest rates on gold metal loan were to increase from current 2.5% to 6% on structural basis due to increasing global uncertainty.

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. Read more on Research Reports by NDTV Profit.HDFC Securities continues to maintain a high-conviction Buy on Thangamayil and a target price of Rs 2,400 (25x FY27 EPS, representing a 25% premium to its five-year one-year forward average PE).  Read MoreResearch Reports 

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