Moneycontrol
Last Updated : Aug 06, 2012 11:23 AM IST | Source: Moneycontrol.com

Thangamayil Jewellery eyes Rs 1,750 cr sales in FY13

Thangamayil Jewellery expects revenue of Rs 1,750 crore this financial year, helped by new store openings and strong demand for gold and diamond jewellery. The Madurai, Tamil Nadu headquartered company reported a revenue of Rs 1,131 crore in 2011-12 (April-March).

 
 
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Nachiket Kelkar
moneycontrol.com


Thangamayil Jewellery expects revenue of Rs 1,750 crore this financial year, helped by new store openings and strong demand for gold and diamond jewellery. The Madurai, Tamil Nadu headquartered company reported a revenue of Rs 1,131 crore in 2011-12 (April-March).


"In small towns consumers are buying gold and diamond for future savings and for high rate of returns. Even though gold and diamond prices have risen sharply during last one year, our sales volumes have increased significantly," Ba Ramesh, joint MD, told moneycontrol.com.


Thangamayil focuses on opening stores in tier II and tier III towns of Tamil Nadu like Krishnagiri, Vellakoil, Coimbatore, Salem, Ramanathapuram and Theni among others and says there is no slowdown yet in these markets. Ramesh is also not worried about the low monsoon rain this year and said sales growth at its stores in July suggests that deficit in rainfall won't impact much.


Thangamayil Jewellery raised Rs 28.75 crore from its initial public offering in 2010. The funds have since been utilised and it is now planning to raise fresh funds to fuel its expansion further.


"Regarding fund raising plans in the near future, it is under serious consideration by our board," he said.


However, the company has not yet finalised the size and means of the planned fund raising, Ramesh said.


The company currently has 20 stores and it is likely to have 28 outlets by March 2013. Depending on size of the branches, it will be spending Rs 40-50 lakh to meet its interior and other equipment needs, Ramesh said.


"Our main focus would be on smaller towns in Tamil Nadu synergised with bigger towns like Salem, Krishnagiri, Namakkal and Dharmapuri in the form of cluster format in and around these towns," he said.


For now, the fund requirement for the projects would be met through internal accruals, and working capital requirements of up to Rs 406 crore for this financial year have been tied up with consortium of bankers, according to Ramesh.


Thangamayil's first quarter net profit rose 42% year-on-year to Rs 15.13 crore, while total income was up 61% to Rs 358.4 crore. On a sequential (quarter-on-quarter) basis net profit and revenue was up 66% and 17% respectively.


Its EBITDA (earnings before interest, taxes, depreciation and amortization) margin was flat at 8.9% in April-June and it hopes to maintain those levels for another 2-3 quarters.


Thangamayil Jewellery shares were trading flat at Rs 201 on NSE in morning trade on Friday. The stock has jumped 168% from its IPO price of Rs 75 a share. The company was listed on stock exchanges on Feb 19, 2010.


Crisil Independent Equity Research has assigned a fair value of Rs 204 for Thangamayil Jewellery.  The company's expansion plan has been on track during the quarter; however, Crisil remains concerned about high gold prices as it could affect demand and any sharp correction in gold prices could lead to inventory loss.

nachiket.kelkar@network18online.com

First Published on Aug 3, 2012 10:05 am
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