Thangamayil Q2 profit stays flat as retail margins compress

Thangamayil Jewellery Limited reported Q2 2027 profit after tax of Rs 59 crore, unchanged from Q2 2026, despite a 40% rise in total sales to Rs 2,381 crore. The year-on-year table shows retail gross margin fell 160 basis points to 9.65%, while earnings before interest, tax, depreciation and amortisation margin declined 153 basis points to 4.95%.

Why did Thangamayil’s Q2 profit remain flat?

Thangamayil’s profit after tax remained at Rs 59 crore because sales growth substantially exceeded growth in gross profit and operating earnings. Total sales rose by Rs 676 crore, from Rs 1,705 crore in Q2 2026 to Rs 2,381 crore in Q2 2027, while retail sales increased 41% to Rs 2,303 crore from Rs 1,636 crore.

Reported gross profit increased 20% to Rs 221 crore from Rs 184 crore, compared with the 40% increase in total sales. EBITDA rose 8% to Rs 114 crore from Rs 106 crore, while profit before tax increased 3% to Rs 80 crore from Rs 78 crore. The resulting profit after tax was unchanged despite the higher revenue base.

Gold jewellery remained Thangamayil’s largest retail-sales segment, with sales increasing 41% to Rs 2,179 crore from Rs 1,501 crore. Non-gold sales, comprising silver, diamonds and other products, rose 36% to Rs 184 crore from Rs 135 crore, but their share of retail sales declined to 7.99% from 8.23%.

How far did Thangamayil’s retail margins fall in Q2?

Thangamayil’s year-on-year Q2 table reports gross profit margin of 9.65% of retail sales, down from 11.25% in Q2 2026. The 160-basis-point decline meant that reported gross profit increased by Rs 37 crore even as retail sales increased by Rs 667 crore.

EBITDA margin fell to 4.95% from 6.45%, a 153-basis-point decline. Profit before tax rose only Rs 2 crore to Rs 80 crore, while EBITDA rose Rs 8 crore to Rs 114 crore. These changes show that earnings growth did not match the increase in Q2 sales.

The first-half comparison showed a similar margin movement. In HY1 2027, retail sales rose 53% to Rs 4,820 crore from Rs 3,141 crore, while reported gross profit increased 33% to Rs 468 crore from Rs 351 crore. Gross margin declined 146 basis points to 9.71%, and EBITDA margin fell 77 basis points to 5.37%.

Thangamayil 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 reported half-year gross profit. The filing also states that Q2 reported gross profit included realised inventory profit, but the supplied disclosure does not provide a readable standalone amount for the quarter.

What changed from Q1 to Q2 for Thangamayil?

Thangamayil’s Q2 sales and profit declined from Q1 2027. Total sales fell 11% from Rs 2,662 crore, retail sales declined 9% from Rs 2,517 crore, and profit after tax fell 31% from Rs 85 crore to Rs 59 crore.

Reported gross profit fell 11% to Rs 221 crore from Rs 247 crore. The sequential table reports gross margin of 9.60% in Q2, compared with 9.81% in Q1, while EBITDA declined 21% to Rs 114 crore from Rs 145 crore and EBITDA margin declined to 4.95% from 5.76%.

Gold jewellery sales declined 7% sequentially to Rs 2,119 crore from Rs 2,273 crore. Non-gold sales decreased 25% to Rs 184 crore from Rs 244 crore, reducing the category’s retail-sales share by 170 basis points from 9.69% to 7.99%.

Thangamayil also reported a sequential decline in earnings per share to Rs 19.13 from Rs 27.38, or 30%, which it attributed to lower gross profit margin. Profit before tax decreased 30% to Rs 80 crore from Rs 115 crore in the same quarter-on-quarter comparison.

Did Thangamayil’s Q2 volumes and coverage indicators weaken?

Thangamayil’s gold ornament volume declined 1% year on year to 1,500 kilograms in Q2 2027 from 1,513 kilograms, despite the 41% increase in gold jewellery sales value. Gold ornament volume was also 7% below the 1,620 kilograms reported in Q1 2027.

Silver-product volume declined 28% year on year to 4,049 kilograms from 5,636 kilograms and was 29% below the Q1 2027 level of 5,727 kilograms. Diamond-product volume moved in the opposite direction, increasing 27% year on year to 5,296 carats from 4,184 carats and rising 6% sequentially from 4,987 carats.

Annualised inventory turnover was 2.86 times in Q2 2027, compared with 2.87 times a year earlier and 3.20 times in Q1 2027. Interest cover declined to 5.14 times from 6.52 times in Q2 2026 and from 8.18 times in Q1 2027.

For HY1 2027, annualised inventory turnover improved to 3.03 times from 2.84 times in HY1 2026, while interest cover rose to 6.49 times from 6.17 times. Thangamayil also reported same-store sales growth of 35.93% for the six months ended September 30, 2026, compared with 10.31% in HY1 2026.

Conclusion

Thangamayil’s Q2 results show that higher sales did not translate into higher net profit. Total sales rose 40% to Rs 2,381 crore and retail sales rose 41% to Rs 2,303 crore, but profit after tax remained Rs 59 crore as the year-on-year gross margin fell to 9.65% and EBITDA margin to 4.95%.

The next disclosed unresolved matter is Thangamayil’s appeal concerning the treatment of beaten, or exchange, gold as 18-carat material, for which the company said a review committee had made a favourable noting. The filing also disclosed inventory hedging of 95% for gold and 49% for silver as of September 30, 2026, alongside gold and silver price changes through October 30, 2026.