Today's Top Gainer
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Ba. Ramesh, Joint Managing Director, Thangamayil Jewellery Ltd entered the family business at his young age to handle gems and jeweler trading business. With his enthusiasm for sales achievement, Ba. Ramesh started nurturing the Company and modernized its outlook. He formulated and successfully implemented the game changing concept of competitive pricing. He has been instrumental in shaping the company’s unique style of customizations.
Thangamayil Jewellery Limited, established on 1947, widened its wings and incorporated as Private Limited Company, on March 2000. In 2006 January Registration of "Thangamayil" was registered as a trademark. Thangamayil Jewellery Limited was incorporated, by incorporating as Public Limited Company as on November 2007. Thangamayilhas around 31 branches across Tamil Nadu, which includes Madurai, Coimbatore, Dindugal, Karaikudi, Tirunelveli and Theni.
Speaking with Anil Mascarenhas and Yash Ved of IIFL, Ba. Ramesh says “In spite of the volatility in the gold prices and the impact of the government regulation on the sector the company has been able to maintain its growth trajectory.”
Given the volatility in gold prices, how was the quarter just gone by?
We are happy with the increase in sales in the first quarter of FY14. In spite of the volatility in the gold prices and the impact of the government regulation on the sector, we have been able to maintain its growth trajectory.
We are committed to provide the best valuable ornaments to our customers. The company will focus on increasing franchises in the state to increase its sales. During this quarter, the company has started four more branches which are performing satisfactorily.
Thangamayil’s six decade old business has around 31 branches across the state and its performance demonstrates its all-round potential and strengths. Expansion of gold and silver jewellery to increase profitability would be Thangamayil’s top priority.
Brief us about your Financials?
Thangamayil Jewellery recorded consolidated revenue of Rs 425.16 crore for Q1FY14 as against Rs 358.41crore for Q1FY13, up by 18.6%. The consolidated profit after tax (PAT) for Q1FY14 is at Rs13.76 crore as against Rs 15.13 crore for Q1FY13. The EPS is at Rs 10.03.
How do you view the recent RBI developments?
The Reserve Bank has set some stringent conditions for importers. At least 20% of imported gold is to be made available for exports. Importers will have to keep 20% of the consignment with customs bonded warehouses.
This 80:20 policy is a difficult situation for us. There is no clarity in the policy. Value addition needs to be defined properly and we are expecting some clarification from the Ministry.
A lot of employees may lose their jobs as manufacturers scale down operations. Also, the government should give some incentives for exports.
What is your outlook on gold prices?
The price increase or decrease does not affect our Net interest margin much. But if the gold prices comes down, it is very good for us. If the rate comes down from Rs2700 to Rs2400 per gram, people do not really look for discounts. Also there is scope for us to raise our making charges.
Gold price in US$ will be in the range of 1050, while in Indian rupee terms I see it moving between Rs.29,000 on the higher side to Rs. 25,000 on the lower side (per 10 gms).
Are your expansion plans on hold?
We are not doing any aggressive expansion this year. We are planning to expand business in Dubai and Malaysia market. We need to do this to ensure that our business does not suffer due to any domestic issues on the regulatory front.
We are currently running 31 stores, and we had planned 47 stores this fiscal year. It will be funded from internal accruals.
How the expansion pans out will depend on the developments in the coming months.
We want to reduce our costs and interest rates. We will reduce our spend on advertising. We will concentrate our attention on our manufacturing units and look at giving our customers a wide range to choose from.
What is your message to your shareholders?
The first quarter was very good. This year, we will be reducing our expenditure. Our shareholders have been supportive of us and I hope they extend their support as we put in place more measures to provide value to our customers and thereby value to our shareholders.