Thangmayil jewellers ltd

[rishiagarwal]

Expecting an Outstanding Q3 results from Thangamayil Jewellery Ltd. (Tamil nadu’s Organised Jewellery chain)
Gold (CFDs on Gold) had gained 18.5%+ in Q3 FY2024.
Company keeps around 25% portion of their inventory as unhedged.
Hedge : Unhedged inventory ratio = 75:25.
Company will benefit from the Huge Inventory Gains on Unhedged portion of inventory (25% inventory) which will lead to margin expansion at the operating margin levels.

Previously, Margin Expansion happened in Q2FY21.
In Quarter ending Sept 2020, Gold prices rose 17%+ which led to company’s highest ever operating margin of 22.76%.
In Current qtr,
->Gold price rised 18.5%+ & closed above $2000/OZ
→ Strong Growth in Sales expected (wedding & festival season)
→ Management forecasts ₹4,000 crore revenue in FY24, nearly doubling figures from two years ago revenue. (source: CNBC 3rd Nov. Management interview)

[rishiagarwal]

[rishiagarwal]

[rankamoksh]

by hedging I think they buy put options so they are protected from downside but I think they capture the full upside ig.

[rankamoksh]

Senco gold and PNGS Gargi are trading at very high valuations, I think it is because of their rapid store expansion, thangmayil looks to be a value buy, since the company does not do any concalls very difficult to track.