Multibagger Thangamayil Jewellery share price hits 10% lower circuit despite strong Q1 results. What spooked investors?

Thangamayil Jewellery Q1 results: Shares of Thangamayil Jewellery came under heavy selling pressure on Wednesday, hitting the 10% lower circuit at ₹6,461 on the BSE, even though the company reported a strong set of earnings for the June quarter (Q1 FY27). Investors focused less on the robust financial performance and more on the company's cautious outlook for the ongoing quarter, which weighed on sentiment.

The jewellery retailer delivered sharp growth in both revenue and profitability during the quarter. However, management flagged continued weakness in demand, citing uncertainty surrounding the West Asia war, higher import duty on gold, rupee depreciation and customers delaying purchases in anticipation of lower gold prices.

Q1 Results

Thangamayil Jewellery reported a net profit of ₹85 crore for the quarter ended June 2026, registering an 86% increase from ₹45.7 crore in the corresponding period last year.

The company's revenue from operations climbed 71.2% year-on-year to ₹2,666.4 crore, compared with ₹1,558 crore in the June quarter of the previous financial year.

Operating performance also remained strong. EBITDA (earnings before interest, tax, depreciation and amortisation) rose 66.2% to ₹144.6 crore from ₹87 crore a year ago. However, the EBITDA margin narrowed slightly to 5.4%, compared with 5.6% in the corresponding quarter last year.

Weak Guidance

Despite reporting healthy financial results, the company painted a cautious picture of near-term demand.

Same-store sales (SSS) growth stood at 44.4% during the quarter ended June 30, 2026, compared with 72.3% growth on a quarter-on-quarter basis. Thangamayil Jewellery said gold volumes remained relatively subdued even though international gold prices were more benign than in the previous quarter, when prices had stayed elevated.

According to the company, demand was affected primarily by the increase in gold import duty from 6% to 15%, effective May 13, 2026, along with significant depreciation in the Indian rupee. These developments prompted many customers to postpone jewellery purchases, expecting international gold prices, in US dollar terms, to moderate in the future.

The company also said uncertainty arising from the West Asia war adversely affected consumer sentiment. It noted that the slowdown in gold purchases by expatriates, caused by lower inward remittances in the regions where the company operates, further contributed to weaker offtake on a quarter-on-quarter basis.

Management indicated that the weakness has persisted into the current quarter. Thangamayil Jewellery said it did not witness any visible improvement in sales during the first 28 days of Q2 FY27, attributing the continued softness to lingering uncertainty surrounding the war and customers' expectations of a moderate decline in international gold prices, leading them to defer purchases further.

The company expects this postponed demand to return once geopolitical conditions stabilise and the outlook for gold prices improves. It remains optimistic that demand will recover during the second half of FY27.

Stock performance

Although the stock hit the 10% lower circuit in Wednesday's trade, it has significantly outperformed the broader market over longer timeframes.

Thangamayil Jewellery shares have gained 10% in the past one month, 62% over three months, and 85% in the last six months. On a one-year basis, the stock has given multibagger returns, surging 249%, while over the past five years, it has delivered a 1,370% return.

The stock touched its 52-week high of ₹7,429 in the previous trading session on July 28, while its 52-week low of ₹1,774.35 was recorded in July last year.

Disclaimer: This story is for educational purposes only. Please consult with an investment advisor before making any investment decisions.