Thangamayil Jewellery inventory gains equal 12.60% of gross profit

Thangamayil Jewellery Limited reported Rs 59.27 crore of realised gold and silver inventory profit in the six months ended September 30, 2026, equal to 12.60% of reported gross profit of Rs 468 crore, as higher duties and price swings coincided with first-half sales of Rs 5,043 crore.

How did inventory profit affect Thangamayil Jewellery’s first-half result?

Thangamayil Jewellery said realised inventory profit on gold and silver was Rs 59.27 crore in the six months ended September 30, 2026, representing 12.60% of its Rs 468 crore reported gross profit. The disclosure identifies the realised inventory amount as a component of gross profit during the half year.

Gross profit increased in absolute terms but declined as a proportion of retail sales. Reported gross profit rose 33% from Rs 351 crore in the corresponding prior-year half to Rs 468 crore, while gross profit margin declined by 146 basis points, or bps, to 9.71% from 11.17%.

Total sales increased 55% to Rs 5,043 crore from Rs 3,260 crore, while earnings per share increased to Rs 46.51 from Rs 33.53. Gold ornament volume increased 4% to 3,120 kilograms, whereas silver-product volume fell 17% to 9,776 kilograms, showing different volume trends across the two metal categories.

What disrupted Thangamayil Jewellery’s trading conditions?

Thangamayil Jewellery said a 9% duty increase on gold and silver was reflected in market prices from May 13, 2026. It also said uncertainty caused by the West Asia war produced wide fluctuations in gold and silver prices and reduced expatriate remittances in parts of Tamil Nadu where it operates.

The company cited lower quoted metal prices after the September period end. Gold fell from US$4,690 in late September 2026 to US$3,909 on October 30, 2026, while silver declined from US$71.15 to US$49.50 over the dates cited.

In the quarter ended September 30, 2026, total sales increased 40% year on year to Rs 2,381 crore from Rs 1,705 crore, and retail sales rose 41% to Rs 2,303 crore. However, gold ornament volume declined 1% to 1,500 kilograms and silver-product volume declined 28% to 4,049 kilograms.

Why did Thangamayil Jewellery’s second-quarter earnings decline sequentially?

Thangamayil Jewellery reported an 11% quarter-on-quarter decline in topline to Rs 2,381 crore in Q2 2027 from Rs 2,662 crore in Q1 2027, while earnings per share fell 30% to Rs 19.13 from Rs 27.38 because gross profit margin declined. The company attributed the earnings-per-share decline to the fall in gross profit margin.

Reported gross profit fell 11% sequentially to Rs 221 crore from Rs 247 crore, and gross profit margin narrowed 21 bps to 9.60% from 9.81%. Earnings before interest, tax, depreciation and amortisation, or EBITDA, declined 21% to Rs 114 crore from Rs 145 crore, while EBITDA margin declined to 4.95% from 5.76%.

The quarter still delivered a 20% year-on-year increase in reported gross profit from Rs 184 crore, although gross profit margin was lower than the 11.25% reported a year earlier. Profit after tax was Rs 59 crore in both Q2 2027 and Q2 2026, while interest cover declined to 5.14 times from 6.52 times.

How much metal exposure had Thangamayil Jewellery hedged?

Thangamayil Jewellery had hedged 95% of its gold exposure and 49% of its silver exposure as of September 30, 2026. The different hedge levels were disclosed alongside the Rs 59.27 crore realised inventory profit on the two metals during the first half.

The company reported overall liquidity of Rs 749 crore as of November 3, 2026, including eligible undrawn drawing facilities from member banks. Its inventories stood at Rs 3,697.76 crore on September 30, 2026, compared with Rs 2,953.63 crore on March 31, 2026, while current borrowings increased to Rs 1,365.98 crore from Rs 774.16 crore.

Cash and cash equivalents were Rs 90.09 crore on September 30, 2026, compared with Rs 124.18 crore on March 31, 2026, and bank balances other than cash equivalents were Rs 290.55 crore versus Rs 257.05 crore. The company’s total assets increased to Rs 4,602.49 crore from Rs 3,820.46 crore over the same dates.

What operating measures did Thangamayil Jewellery report for the half year?

Thangamayil Jewellery reported same-store sales growth of 35.93% for the six months ended September 30, 2026, compared with 10.31% in the first half of FY 2025-26. Non-gold products accounted for 8.88% of retail sales, up 44 bps from 8.44% in the prior-year half.

Gold jewellery sales increased 53% to Rs 4,392 crore, while non-gold sales increased 62% to Rs 428 crore. Diamond-product volume rose 25% to 10,293 carats, contrasting with the 17% decline in silver-product volume to 9,776 kilograms.

Annualised inventory turnover increased to 3.03 times from 2.84 times, and interest cover increased to 6.49 times from 6.17 times. Thangamayil Jewellery also paid Rs 55.95 crore in dividends in the quarter ended September 30, 2026, after shareholders approved a Rs 18 per equity-share dividend on July 29, 2026.

Conclusion

Thangamayil Jewellery’s first-half sales, gross profit and profit after tax increased from the prior-year period, but the Rs 59.27 crore realised inventory profit accounted for 12.60% of gross profit and retail gross margin declined by 146 bps. The 9% duty increase, metal-price swings and weaker silver volumes occurred alongside 95% gold hedging and 49% silver hedging at September 30, 2026.

The next disclosed unresolved matter is the appeal concerning the treatment of entire beaten, or exchange gold, as 18 carats. Thangamayil Jewellery said a review committee made a favourable noting in its FY 2025-26 annual report, while the appeal remains pending in the company’s September 2026 update.