Why is Thangamayil Jew. falling/rising?

Recent Price Movement and Market Performance

Thangamayil Jewellery’s stock has been under pressure over the past seven days, registering a cumulative loss of 10.75%. On the day in question, the stock underperformed its sector by 4.7%, hitting an intraday low of ₹2,986, which represents a 5.48% decline from previous levels. The weighted average price indicates that a larger volume of shares traded closer to the day’s low, signalling selling pressure. Additionally, the stock’s price currently sits below its 5-day moving average, although it remains above the 20-day, 50-day, 100-day, and 200-day averages, suggesting some underlying longer-term strength despite short-term weakness.

Investor participation has also waned recently. Delivery volume on 20 Nov was recorded at 9,740 shares, marking a sharp 60.47% drop compared to the five-day average delivery volume. This decline in investor engagement could be contributing to the stock’s recent price softness, as lower participation often exacerbates volatility and price declines.

Strong Fundamentals Underpinning Long-Term Growth

Despite the recent price decline, Thangamayil Jewellery’s fundamentals remain robust. The company has demonstrated healthy long-term growth, with net sales expanding at an annual rate of 35.44% and operating profit growing at 21.61%. Its return on capital employed (ROCE) stands at a commendable 16.15%, reflecting efficient management and effective utilisation of capital.

The company’s latest financial results, declared in September 2025, were very positive. Net profit for the latest six months surged by 166.48% to ₹104.22 crore, while profit before tax excluding other income grew by 112.1% to ₹78.39 crore compared to the previous four-quarter average. Net sales for the same period rose by 36.02% to ₹3,268.76 crore. These figures underscore the company’s consistent profitability and operational strength.

Valuation metrics also suggest that the stock is attractively priced. With a ROCE of 14.6 and an enterprise value to capital employed ratio of 5, the stock trades at a discount relative to its peers’ historical valuations. Over the past year, the stock has delivered a return of 57.26%, significantly outperforming the Sensex’s 10.47% gain, while profits have increased by 92.8%. The company’s PEG ratio of 0.7 further indicates that the stock may be undervalued relative to its earnings growth potential.

Institutional Interest and Consistent Returns

Institutional investors have shown growing confidence in Thangamayil Jewellery, increasing their stake by 0.54% over the previous quarter to hold a collective 19.86% of the company. This rising institutional participation is a positive sign, as these investors typically possess greater analytical resources and a longer-term investment horizon compared to retail investors.

The stock’s performance over the medium to long term has been impressive. It has generated returns of 519.30% over three years and an extraordinary 1,301.66% over five years, vastly outperforming the Sensex benchmarks of 39.39% and 94.23% respectively. This consistent outperformance highlights the company’s ability to deliver shareholder value over extended periods.

Conclusion: Short-Term Price Pressure Amid Strong Fundamentals

In summary, the recent decline in Thangamayil Jewellery’s share price on 21-Nov and over the preceding week appears to be driven primarily by short-term market dynamics rather than any deterioration in the company’s underlying business. The stock’s underperformance relative to its sector and the broader market, coupled with falling investor participation and trading volumes near the day’s lows, suggest profit-taking or cautious sentiment among traders.

However, the company’s strong financial results, consistent growth in sales and profits, attractive valuation metrics, and increasing institutional interest provide a solid foundation for long-term value creation. Investors looking beyond the immediate price fluctuations may find the current dip an opportunity to consider the stock’s compelling fundamentals and growth prospects.

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