Quality Assessment Remains Strong
Thangamayil Jewellery continues to demonstrate high management efficiency and operational excellence. The company’s return on capital employed (ROCE) stands at a commendable 16.15%, underscoring effective utilisation of capital resources. Over the last nine months, net sales surged by 60.50% to ₹5,674.59 crores, while profit before tax excluding other income (PBT less OI) grew by an impressive 133.0% to ₹145.52 crores. Net profit for the same period rose to ₹210.74 crores, reflecting a 79.08% increase year-on-year.
These figures highlight consistent earnings growth and operational strength, with the company delivering positive results for five consecutive quarters. Institutional investors have taken note, increasing their holdings to 21.32%, up 1.46% from the previous quarter, signalling confidence in the company’s long-term prospects.
Valuation: Expensive Yet Discounted Relative to Peers
Despite the strong financial performance, valuation metrics suggest a nuanced picture. The company’s ROCE of 14.6% is solid, but the enterprise value to capital employed ratio of 5.9 indicates a relatively expensive valuation. However, when compared to its peers in the diamond and gold jewellery sector, Thangamayil Jewellery is trading at a discount to historical averages, offering some valuation comfort to investors.
The price-to-earnings-to-growth (PEG) ratio stands at 0.6, reflecting that the stock’s price growth is reasonably aligned with its earnings growth, which has risen by 109.6% over the past year. This suggests that while the stock is not cheap, it remains attractively valued given its earnings momentum.
Financial Trend: Outstanding Growth Trajectory
The company’s financial trend remains robust, with net sales growing at an annualised rate of 37.38% and operating profit expanding at 23.92%. Over the last year, Thangamayil Jewellery’s stock has delivered a remarkable 103.31% return, vastly outperforming the Sensex’s 9.81% gain over the same period. Over longer horizons, the stock’s performance is even more striking, with a 3-year return of 644.23% compared to the Sensex’s 36.80%, and a 10-year return of 3,977.76% versus the Sensex’s 256.90%.
This consistent outperformance underscores the company’s ability to generate shareholder value through sustained growth and profitability.
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Technical Indicators Trigger Downgrade
The primary catalyst for the downgrade from Strong Buy to Buy is the shift in technical grade from bullish to mildly bullish. A detailed analysis of technical indicators reveals a mixed picture:
- MACD: Weekly readings have turned mildly bearish, although monthly signals remain bullish, indicating some short-term caution.
- RSI: Both weekly and monthly Relative Strength Index readings show no clear signal, suggesting a neutral momentum.
- Bollinger Bands: Both weekly and monthly trends remain bullish, signalling continued price support within volatility bands.
- Moving Averages: Daily moving averages are bullish, supporting a positive near-term trend.
- KST (Know Sure Thing): Both weekly and monthly KST indicators have turned mildly bearish, reflecting some weakening in momentum.
- Dow Theory: Weekly trends are mildly bullish, while monthly trends remain bullish, indicating a cautiously optimistic outlook.
- On-Balance Volume (OBV): No discernible trend on weekly or monthly charts, suggesting volume is not confirming price moves.
These mixed technical signals have prompted a more conservative stance, with the technical grade adjustment reflecting a tempered outlook on price momentum despite the company’s strong fundamentals.
Price and Market Performance
On 18 Feb 2026, Thangamayil Jewellery’s stock closed at ₹3,655.00, down 1.70% from the previous close of ₹3,718.05. The day’s trading range was ₹3,642.60 to ₹3,790.00. The stock remains below its 52-week high of ₹4,138.15 but well above its 52-week low of ₹1,526.45, reflecting significant appreciation over the past year.
Short-term returns have been modestly negative, with a 1-week return of -1.20% compared to the Sensex’s -0.98%, and a 1-month return of -3.19% versus the Sensex’s -0.14%. However, year-to-date returns remain strong at 13.61%, outperforming the Sensex’s -2.08% decline.
Sector and Industry Context
Operating within the Gems, Jewellery and Watches sector, specifically the diamond and gold jewellery industry, Thangamayil Jewellery benefits from favourable long-term demand trends and rising consumer spending. The company’s ability to sustain high growth rates and profitability amid sector volatility is a key strength that supports its Buy rating despite the technical downgrade.
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Balancing Strengths and Risks
While the company’s financial and quality parameters remain robust, investors should be mindful of valuation risks. The relatively high enterprise value to capital employed ratio and the recent technical softening suggest caution in the short term. However, the stock’s attractive PEG ratio and consistent outperformance relative to benchmarks provide a compelling case for continued accumulation at current levels.
Institutional investor confidence and strong quarterly results further reinforce the company’s growth narrative, making the Buy rating appropriate for investors seeking exposure to a fundamentally sound mid-cap jewellery stock with a proven track record.
Conclusion
Thangamayil Jewellery Ltd’s investment rating adjustment from Strong Buy to Buy reflects a prudent response to evolving technical indicators while recognising the company’s outstanding financial performance and quality metrics. The downgrade signals a more measured approach to near-term price momentum, but the company’s long-term growth prospects and valuation relative to peers continue to favour a positive investment stance.
Investors should monitor technical developments closely alongside quarterly earnings updates to gauge the stock’s trajectory, but the current Buy rating underscores confidence in Thangamayil Jewellery’s ability to deliver sustained value in the gems and jewellery sector.
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