Thangamayil Jewellery
Entering a golden era
Entering a golden era; initiating coverage with a high-conviction BUY: We believe Thangamayil Jewellery, a leading jewellery player in Tamil Nadu, is set to achieve 26%, 33%, and 41% 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 TJL as the D-Mart 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 initiate coverage with a high-conviction BUY and a target price of INR 2,500 (25x September 2026 EPS, representing a 25% premium to its 5-year one-year forward average PE). We anticipate significant rerating, as TJL’s ROE improves from 18% in FY23 to 32% in FY27, substantially surpassing that of Titan, the market leader in the organised jewellery space.
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