Thangamayil Jewellery shares crack nearly 31% in four sessions; buy the dip or avoid?

Shares of Thangamayil Jewellery Ltd extended their sharp decline for the fourth straight session on Monday, falling 5 per cent to hit a low of Rs 5,233.80. With the latest fall, the stock has tumbled 30.74 per cent in four trading sessions despite reporting strong June quarter (Q1 FY27) earnings.

Even after the recent correction, the jewellery retailer remains a multibagger, rallying 161.13 per cent over the past one year.

The sharp selloff came after the company flagged near-term demand concerns despite delivering robust year-on-year (YoY) financial performance.

For Q1 FY27, Thangamayil Jewellery reported an 86.15 per cent YoY rise in consolidated net profit to Rs 85.09 crore from Rs 45.71 crore in the corresponding quarter last year. Revenue from operations jumped 71.16 per cent YoY to Rs 2,666.38 crore from Rs 1,557.86 crore.

However, sequential performance remained under pressure. Net profit declined 40.35 per cent quarter-on-quarter (QoQ) from Rs 142.66 crore, while revenue fell 6.09 per cent from Rs 2,839.17 crore reported in the March quarter.

Explaining the weaker sequential performance, the company attributed the slowdown to a sharp increase in import duty on gold from 6 per cent to 15 per cent effective May 13, 2026, rupee depreciation and customer expectations of lower international gold prices, which led many buyers to defer purchases.

The company also cited uncertainty arising from the West Asia conflict, which affected gold purchases funded by expatriate remittances in its key operating regions.

Thangamayil said sales remained subdued during the first 28 days of the second quarter as customers continued postponing purchases amid geopolitical uncertainty and expectations of softer gold prices. It expects the deferred demand to return once the situation stabilises and remains hopeful of a recovery in the second half of FY27.

The company added that its Same Store Sales (SSS) growth stood at 44.40 per cent for the June quarter.

Some market experts believe the stock remains under pressure in the near term.

Ravi Singh, Chief Research Officer at Master Capital Services, said Thangamayil Jewellery delivered a strong operational performance in Q1 FY27, but management's cautious outlook weighed heavily on investor sentiment.

"The stock has turned into a falling knife, plunging over 30 per cent in the last five trading sessions with no signs of meaningful buying interest. It is now approaching the Rs 4,300–4,200 zone, where it needs to consolidate and form a stable base before any sustainable recovery can be expected," he said.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, said the correction follows a steep rally in the stock.

"It is suitable for investors with a high-risk appetite. From a medium- to long-term perspective, one can consider a buying-on-dips strategy," Bathini said.

AR Ramachandran, Sebi-registered research analyst at Tips2trades, said the stock remains technically bearish.

"Thangamayil Jewellery is bearish on daily charts with strong resistance at Rs 5,226. A daily close below the support level of Rs 4,752 could trigger a decline towards Rs 4,132 in the near term," he said.