Jewellery Stock Jumps 120% In 1 Year, Declares Dividend

Thangamayil Jewellery Ltd, a prominent player in the small-cap gems and jewellery sector, reported its financial results for the fourth quarter of the fiscal year 2023-24 on Monday.

Despite a dip in net profit, the company delighted investors by declaring a substantial dividend, underscoring its commitment to shareholder returns.

Dividend Declaration

The Board of Directors of Thangamayil Jewellery recommended a 60% dividend per share, translating to Rs 6 per equity share based on the face value of Rs 10 each for the fiscal year 2023-24. This recommendation follows an interim dividend of Rs 4 per share paid in February 2024, culminating in a total dividend of Rs 10 per share for the year, equating to a 100% payout on the face value. The final dividend is subject to approval at the upcoming Annual General Meeting (AGM) scheduled for July 25, 2024. The dividend payment will be dispatched within 30 days post-AGM.

Financial Performance

In Q4 FY24, Thangamayil Jewellery experienced a 9% drop in net profit, which fell to Rs 28 crore from Rs 31 crore in the same quarter the previous year. This decline in profit came despite a significant 27 percent rise in revenue from operations, which soared to Rs 981 crore from Rs 770 crore in Q4 FY23.

However, the company faced challenges in maintaining its profitability margins. Earnings Before Interest, Taxes, Depreciation, and Amortisation (EBITDA) plunged 15 percent to Rs 50 crore in Q4 FY24, down from Rs 59 crore in the corresponding quarter of the prior year. The EBITDA margin also saw a decline, contracting by 257 basis points to 5.10 percent from 7.66% year-on-year.

Share Performance

Shares of Thangamayil Jewellery closed at Rs 1249.75 during a special trading session on Saturday, marking a modest increase of 0.30% from the previous close of Rs 1246.05. The company, which is part of the S&P BSE SmallCap index, has demonstrated a mixed performance in the stock market over different periods.

In the short term, Thangamayil Jewellery's stock rose by 1.83 percent over the last week. However, it faced declines over longer periods, falling by 6.26 percent in the last month, 6.37 percent in the past three months, and 8.96 percent over the last six months. Year-to-date, the stock has decreased by 10.01%.

Despite these recent fluctuations, Thangamayil Jewellery has delivered impressive returns to its shareholders over a longer horizon. Over the past year, the stock has surged by 122.59%, more than doubling investors' money. The gains extend further back, with the stock climbing 124.39% over the past two years and an astounding 285.96% over the last three years.

Market Position and Outlook

With a market capitalization of Rs 3,429.21 crore, Thangamayil Jewellery remains a significant entity within the small-cap sector. The company's ability to provide substantial returns to its shareholders, despite short-term challenges in profitability, underscores its resilience and strategic management.

As Thangamayil Jewellery navigates the evolving market conditions, its focus on rewarding shareholders through dividends and maintaining a robust revenue growth trajectory will be critical. Investors will be keenly watching the company's next moves, particularly in enhancing operational efficiencies and profitability margins to sustain long-term growth and value creation.

Thangamayil Jewellery's latest financial results and dividend declaration reflect a company committed to delivering value to its shareholders. Despite a decline in net profit and EBITDA, the firm's significant revenue growth and impressive long-term share performance highlight its potential and robust market presence.

The forthcoming AGM and subsequent dividend payout will be key events for stakeholders, marking the culmination of a challenging yet rewarding fiscal year for Thangamayil Jewellery.

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