Thangamayil Jewellery Ltd, the Madurai-based listed jeweller, plans to spend nearly ₹400 crore this fiscal to open eight stores (mid and small) and one flagship in Chennai. The company’s board has approved this plan.
On its geographical expansion plan, the company continues to mine opportunities available within Tamil Nadu for some more years to become the ‘dominant’ regional player status, its Chairman, Balarama Govinda Das, said in the 2023-24 annual report.
The board has given approval to open new branches — up to eight mid- and small-size outlets and one ‘flagship’ outlet in Chennai in FY25.
The company may require initial capital outlay of ₹400 crore incrementally, including working capital requirements, for all the nine outlets to be opened in the current year in a phased manner. This will be met by undrawn eligible working capital borrowings up to ₹175 crore; incremental customer advances up to ₹125 crore; infusion of ₹100 crore from system-generated cash profits, as per capital allocation plan aggregating to ₹400 crore as sources to meet the said expansion plan, the report said.
The company said that in 2023-24, it could do yet another record turnover of ₹3,827 crore with an all-time high EBITDA profit of well over ₹218 crore. The profit after tax was at ₹123 crore as against ₹80 crore in the previous year. The increase in profit is besides better realisation contributed by cost optimisation and synergy maximisation in all aspects of business, he said in the report.
“Apart from the price increase impact on gross realisation positively, we could see retail volume growth in gold jewellery by 11 per cent. A record 5,604 kg were sold in the year. The existing same-store sales increased 23.49 per cent in value that contributed significantly to the overall retail reported turnover with 28 per cent increase in value terms.”
No drop in sales
Despite 8 per cent gold price increase in the first 48 days of the current year (FY25), there was no perceptible drop in sales. Even the disturbances caused by General Election processes, had not affected the normal operations, that is contrary to earlier experiences, Das said in the report.
According to the report, the year 2024-25 has begun well. The first quarter, operatively, could be promising as per current indications for multiple reasons — better realisation on gold price increase, new outlets added in 2023-24, the “Akshaya Thrithiyai” sales and more number of wedding events.
In 2024, the Indian jewellery market was valued at about $89.65 billion. This significant figure highlights the market’s robust nature in a country where jewellery holds substantial cultural, emotional and financial value. Gold, including variations such as pink gold and blush gold, remains the cornerstone of this market. The sector is projected to grow at a compounded annual growth rate (CAGR) of 5.7 per cent over the next decade, reaching about $125 billion by 2030. This growth reflects the expanding middle class, increasing disposable incomes, and a strong inclination towards gold and diamond jewellery as part of cultural and marriage-related traditions, he said.
The company’s share price closed at ₹1,760.70, up 1.79 per cent, on the NSE.