Thangamayil Jewellery Ltd Upgraded to Strong Buy on Robust Fundamentals and Technical Momentum

Quality Assessment: Outstanding Financial and Operational Metrics

Thangamayil Jewellery’s quality parameters have strengthened notably, underpinned by its impressive return on capital employed (ROCE) of 16.15%, which signals efficient capital utilisation and robust management effectiveness. This figure surpasses many peers in the Gems, Jewellery and Watches sector, where average ROCE tends to hover around 12-14%. The company’s management has demonstrated consistent operational excellence, as evidenced by five consecutive quarters of positive results.

Net sales growth remains a key highlight, with a remarkable annualised increase of 37.38%, complemented by operating profit growth of 23.92%. The net profit surge of 79.08% in the latest quarter further cements the company’s quality credentials. For the nine months ended December 2025, net sales reached ₹5,674.59 crores, growing at an accelerated 60.50% rate, while profit before tax excluding other income (PBT less OI) soared by 133.0% to ₹145.52 crores compared to the previous four-quarter average. Net profit after tax (PAT) for the same period stood at ₹210.74 crores, underscoring strong bottom-line momentum.

Institutional confidence also supports the quality upgrade, with holdings rising to 21.32%, an increase of 1.46% over the prior quarter. This reflects growing endorsement from sophisticated investors who typically conduct rigorous fundamental analysis before increasing stakes.

Valuation: Expensive Yet Discounted Relative to Peers

While the company’s valuation remains on the higher side, with an enterprise value to capital employed ratio of 6, it is trading at a discount compared to its peers’ historical averages. This nuanced valuation profile reflects the market’s recognition of Thangamayil Jewellery’s growth potential balanced against its premium pricing. The price-to-earnings-to-growth (PEG) ratio of 0.6 further suggests undervaluation relative to earnings growth, as the company’s profits have risen by 109.6% over the past year, outpacing the stock’s 103.51% return.

Investors should note that the company’s return on capital employed remains robust at 14.6%, reinforcing the justification for its valuation premium. However, the elevated valuation does introduce some risk, particularly if growth momentum slows or broader market conditions deteriorate.

Financial Trend: Exceptional Growth and Profitability Trajectory

Thangamayil Jewellery’s financial trend has been nothing short of outstanding. The company has delivered a stellar 103.51% return over the last year, vastly outperforming the Sensex’s 7.97% return in the same period. Over longer horizons, the stock’s performance is even more impressive, with a 3-year return of 638.73% compared to Sensex’s 38.25%, and a 5-year return of 1,155.20% versus Sensex’s 63.78%. Over a decade, the stock has generated a staggering 3,789.19% return, dwarfing the Sensex’s 249.97%.

This exceptional performance is supported by strong revenue and profit growth, with net sales growing at an annual rate of 37.38% and net profit increasing by 79.08% in the latest quarter. The company’s ability to sustain such growth over multiple quarters and years highlights a durable business model and effective execution strategy.

Moreover, the company’s positive results over the last five consecutive quarters indicate consistent operational momentum, which bodes well for future earnings visibility and investor confidence.

Technicals: Shift to Bullish Momentum Bolsters Upgrade

The upgrade to Strong Buy was significantly influenced by a marked improvement in technical indicators. The technical grade shifted from mildly bullish to bullish, reflecting stronger price momentum and positive market sentiment. Key technical signals include a bullish Moving Average Convergence Divergence (MACD) on both weekly and monthly charts, and bullish Bollinger Bands on the same timeframes.

Daily moving averages have turned bullish, supporting short-term momentum, while the monthly KST (Know Sure Thing) indicator is bullish despite a mildly bearish weekly KST. Dow Theory analysis shows a similar pattern, with a mildly bearish weekly trend but a bullish monthly trend, indicating that longer-term technicals are firmly positive.

Relative Strength Index (RSI) on weekly and monthly charts currently shows no strong signal, suggesting the stock is not overbought or oversold, which may allow room for further upside. On-balance volume (OBV) remains neutral, indicating no significant volume-driven trend yet, but the overall technical picture is constructive.

On 10 February 2026, the stock closed at ₹3,712.10, up 10.00% from the previous close of ₹3,374.65, with a day’s trading range between ₹3,310.00 and ₹3,712.10. The 52-week high stands at ₹4,138.15, while the low was ₹1,526.45, highlighting the stock’s strong recovery and upward trajectory.

Comparative Performance and Sector Context

Thangamayil Jewellery operates within the Diamond & Gold Jewellery industry, a sector known for cyclical demand and sensitivity to economic conditions. Despite these challenges, the company has consistently outperformed the broader market and its sector peers. Its 1-week return of 15.46% dwarfs the Sensex’s 2.94%, while its year-to-date return of 15.38% contrasts with the Sensex’s negative 1.36%. This outperformance underscores the company’s resilience and strong market positioning.

Its market capitalisation grade remains modest at 3, reflecting a mid-cap status that offers both growth potential and liquidity. The upgrade to a Strong Buy rating with a Mojo Score of 84.0 reflects a comprehensive assessment of the company’s fundamentals, valuation, financial trends, and technicals, positioning it as a compelling investment opportunity within the Gems, Jewellery and Watches sector.

Risks and Considerations

Despite the positive outlook, investors should remain mindful of valuation risks. The company’s enterprise value to capital employed ratio of 6 is relatively high, indicating a premium valuation that could be vulnerable to market corrections or a slowdown in growth. Additionally, while institutional holdings have increased, the stock’s technical indicators such as OBV and RSI suggest cautious monitoring is warranted to confirm sustained momentum.

Furthermore, the Gems and Jewellery sector is subject to fluctuations in gold prices, consumer demand, and regulatory changes, which could impact future performance. Investors should weigh these factors alongside the company’s strong fundamentals and technical signals.

Conclusion

The upgrade of Thangamayil Jewellery Ltd from Buy to Strong Buy by MarketsMOJO on 9 February 2026 is well justified by a confluence of factors. The company’s outstanding financial performance, highlighted by robust revenue and profit growth, high management efficiency, and increasing institutional interest, forms a solid foundation. Its valuation, while elevated, remains attractive relative to peers given the strong earnings growth and PEG ratio of 0.6.

Technically, the shift to a bullish trend across multiple indicators supports further upside potential. The stock’s impressive historical returns, significantly outperforming the Sensex over multiple timeframes, add to its appeal. While risks remain, particularly on valuation and sector-specific factors, the overall assessment favours a positive investment stance.

Investors seeking exposure to a high-quality, growth-oriented mid-cap in the Gems, Jewellery and Watches sector should consider Thangamayil Jewellery Ltd as a compelling candidate for their portfolios.

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